Delhi District Court
M/S Goyal Enterprises vs M/S Kanti Lal Sadh(Huf) on 6 February, 2014
IN THE COURT OF AJAY GOEL: ADDITIONAL DISTRICT JUDGE-12
CENTRAL DISTRICT : DELHI.
CS- 31/12
In the Matter of:
M/s Goyal Enterprises,
(through its partner Sh. Rajiv Goyal)
7905 Deena Nath Road, Roshnara Park,
Near Subzi Mandi, Railway Mall Godown,
Delhi-110007
................... Plaintiff
VERSUS
1. M/s Kanti Lal Sadh(HUF)
Through Sh. Kanti Lal Sadh, Karta/authorized signatory
office/factory A-21, First Floor, Sector-67,
Noida, Uttar Pradesh
2. Kanti Sadh, Karta/authorized signatory
M/s Kanti Lal Sadh(HUF)
office/factory A-21, First Floor, Sector-67,
Noida, Uttar Pradesh
Second address:-
r/o 100, Kailash Hills, near Iskon Temple,
New Delhi-110065
......Defendants
CS-31/12 Page No.1/12
Date of Institution: 1.3.12
Date of Assignment to this court: 24.8.12
Date of Arguments:- 4.2.14
Date of Order: 6.2.14
JUDGMENT
1. Vide this order, I shall dispose off the leave to defend application filed by the defendants whereby the defendants have sought leave of this court to contest the suit of the plaintiff. Brief facts of the case are under:-
2. Facts pleaded in the plaint are that plaintiff is a partnership firm and is duly registered under Section 59 of Indian Partnership Act and deals in grey sheetings and voile fabrics. Defendants have been purchasing goods from the plaintiff. As stated on 26.10.10 a sum of Rs.13,69,188/- has been outstanding against the defendants in the accounts books of the plaintiff which are duly and regularly maintained by the plaintiff in due course of its business. As stated in lieu of the acknowledgment and payment of the said amount of Rs. 13,69,188/- the defendants issued eight cheques as detailed in para no. 3 of the plaint. The plaintiff deposited the said cheques with its bankers for encashment but the said cheques were received back on the grounds "Exceed Arrangement" or "Insufficient funds" . As stated after getting the information of dishonouring of the said cheques issued by the defendants in favour of the plaintiff, the plaintiff immediately informed the defendants and demanded the amount of the cheques CS-31/12 Page No.2/12 but the defendants did not pay and failed to pay the amount of cheques. Plaintiff as stated has already filed a complaint against the defendant u/s 138 NI Act which is pending. As stated plaintiff is claiming interest @ 18% p.a which is also mentioned in the bills and is also the rate of interest prevalent in the market and business community and the total amount after adding interest upto 31.1.12 comes to Rs.18,97,880/-. Accordingly it was prayed that instant suit be decreed in favour of the plaintiff and against the defendants for the said amount alongwith pendentelite and future interest @ 18% p.a..
3. During proceedings, the defendants appeared in the matter and filed appearance. Thereafter summons of judgment were issued to the defendants and they filed leave to defend application.
4. In the leave to defend application filed by defendants it was stated that the present suit is not covered under the provisions of Order 37 CPC as the same does not fulfill the necessary ingredients. It was stated that the plaintiff has also concealed material facts falsely alleging that the defendants are defaulters. It was stated that plaintiff and defendant no. 1 had business relation as the defendant no. 1 used to purchase goods/grey cloth from the plaintiff since defendant no. 1 was in business of export of garment and for that purpose he used to purchase raw material including grey cloth from market. It was stated that 3 to5 months period has to be consumed while converting the raw CS-31/12 Page No.3/12 material into finished garments by defendant no. 1. Plaintiff used to supply the grey cloths to the defendant no. 1 after satisfying the quality of the goods and defendant used to make the payment accordingly which differ from time to time as per market situation. It was stated that in the usual course of business the defendant no. 1 used to issue undated cheques to the plaintiff as per the invoice with an understanding that after getting clearance regarding the quality of goods from foreign buyers and receiving the payment accordingly the defendant no. 1 informed the plaintiff and then plaintiff deposited the undated cheques for encashment after filing the dates on the cheques. It was stated that besides the said cheques the defendant no. 1 had also issued cheques as security to the plaintiff keeping in view of the good faith and business relation. As stated in February,2010 the plaintiff purchased the goods in question on different dates and issued cheques accordingly as per said understanding, however the said goods were sub standard and due to this reason defendant no. 1 had to suffer huge loss since foreign buyers refused the goods supplied by defendant no. 1 on the ground that the grey cloths used in the product were substandard. As stated for the said reason the payments had not been made to the defendant no. 1 by the foreign buyers and the defendant no. 1 suffered huge losses. Defendant no. 1 immediately informed the plaintiff about the said supply of the sub standard goods and further requested not to present the undated cheques issued in lieu of goods/invoice in question and the plaintiff assured the defendant that it would CS-31/12 Page No.4/12 look into the matter and again supply the goods as per the requirements and standard but to utter surprise and shock the plaintiff presented the said cheques issued in lieu of said supply of substandard goods on 18.9.10 and the said cheques got dishonoured. When defendant enquired from the plaintiff, the plaintiff told the defendant that inadvertently said cheques were presented and further assured the defendant that he will be careful in future. As stated due to the recession and heavy loss in business defendant had to close his business and the said supply of substandard goods could not be adjusted. It was stated that in May,2011 the plaintiff misused the cheques retained by him as security and presented the same again while in fact the last business transaction took place between the plaintiff and defendant no. 1 in February,2010. It was stated that to shielf his own wrongs and create false ground the plaintiff mentioned a fabricated invoice dated 26.10.10 for an amount of Rs.1,70,000/- in the alleged ledger account. It was stated that defendants duly relied the notice dated 20.5.11 with respect to the cheques in question vide reply dated 29.6.11. It was stated that plaintiff did not mention anywhere as to why he kept silent for almost one year after supply of the substandard goods and filed the present case after a gap of more than one year only to presurize the defendant. It was stated that in usual course of business the defendant no. 1 always used to pay amount of goods received after a gap of 3 to 5 months which can be inferred from the ledger account of the plaintiff. It was also stated that the invoices/bills of plaintiff are CS-31/12 Page No.5/12 self contradictory as the plaintiff mentioned two different penal rate of interest. It was further stated that conduct of the plaintiff shows that the plaintiff is trying to pressurize the defendant no. 1 to pay the alleged amount on the basis of false and fabricated grounds in a threshold which is against the rationale of usual course of business in trade. Accordingly it was prayed that suit of the plaintiff be dismissed.
5. Reply to leave to defend was filed by the plaintiff in which contents of the leave to defend application were denied and those of the plaint were reiterated.
6. I have gone through the record and have heard the arguments of the parties.
7. In the present case it is not denied by the defendant no. 1 that cheques in question were issued by him to plaintiff and it is also admitted that the same were issued undated but it is stated that after clearance of quality of goods by foreign client and receiving of the payment, the defendant no. 1 used to inform the plaintiff and plaintiff then used to deposit the cheques for encashment. On the other hand plaintiff has denied any such understanding that payment used to got encashed after clearance from foreign clients of defendants and only stated that defendants purchased and received the goods/grey clothes from the plaintiff and defendants after satisfying the quality of the goods issued the cheques which were undated but were duly filled up by the defendants themselves and the dates on the cheques was to be filled up by the plaintiff as and when very soon the defendants inform and give clearance to the plaintiff to deposit the cheques which CS-31/12 Page No.6/12 was done only to accommodate the defendants to give them some time to pay the amount of goods purchased by them. First of all when it is admitted by the defendants that they had issued the cheques in question though undated then it leads to admission of liability on their part with respect to the amount mentioned in the said cheques. As far as question that the payment used to be paid by the defendants after clearance from their foreign clients is concerned, except for the bald assertion no document has been produced by the defendants in support of the said contention whereas bills/invoices for which cheques in question were issued are placed on record in which it is clearly mentioned that "Our responsibility cease when goods leave our godown" and that" Only for grey checking guarantee. We are not responsible after dying, bleaching, printing or any other kind of processing on the goods.". The said invoices have not been disputed by the defendants meaning thereby the terms and conditions mentioned in the said invoices would govern the transaction/business dealing between the parties. When it is clearly mentioned in the invoices/bills that responsibility of plaintiff ceases when the goods leave its godown and they are not responsible after processing on the goods, then it does not lie in the mouth of the defendants to say that the payment used to made after approval and payment by his foreign client. It is own case of the defendants that defendant no. 1 used to purchase the grey material from plaintiff which used to be converted into finished garments by the defendant no. 1. When onces the defendants CS-31/12 Page No.7/12 have received the goods from the plaintiff and even converted them into finished garments then as per the above term mentioned in the invoices/bills the responsibility of plaintiff ceases. It is also worth mentioning here that if the goods supplied were substandard then defendants could have returned the same straightway and could not have issued the cheques in question. Further no document has been placed on record to show that any communication was sent by the defendants to the plaintiff regarding such substandard supply of goods nor it is pleaded that the goods were returned back rather as per the case of defendants the goods were received and converted into finished garments and were further supplied to their foreign clients. It does not appeal to common sense that supplier of a raw material would take responsibility of his product after its processing and conversion into a finished product and even otherwise from the record there is nothing to reflect that defendants took any steps regarding the substandard goods. Hence, in view of the above the contentions of the defendants that supplied goods were sub standard or the payment used to be made to the plaintiff after getting the clearance from the foreign clients of defendants are hereby rejected.
8. It was also contended by the defendants that plaintiff misused the cheques retained by him as security and presented the same while the last business transaction took place between the plaintiff and the defendant in February,2010 whereas plaintiff to create false ground mentioned a fabricated invoice dated CS-31/12 Page No.8/12 26.10.10 for an amount of Rs.1,70,000/- in the alleged ledger account filed with the present suit. On the other hand plaintiff has denied that the cheques in question were issued by the defendants as security and it was pleaded that the last business transaction between the parties took place in October,2010. If the last business transaction between the parties took in February,2010 and an amount of Rs.1,70,000/- was wrongly shown in the ledger account based on fabricated invoice then why the defendants issued a cheque for the said amount. It is admitted case of defendant that the whole of the cheques in question were filled by them and only date was filled by the plaintiff, hence it is clear that defendants would have filled the amount Rs.1,70,000/- only because existence of their liability to that extent. It has also not come on record as to what steps were taken by the defendants if the cheques in question were pertaining to the security and were misused by the plaintiff. The court has to be on guard to prevent miscarriage of justice and trickster drawer should not be allowed to find out new ways and means to defeat the payee as held in 2010(3) Civil Court Cases 245(Bombay) Bombay High Court Mohammad Murtuza Mohammad Yusuf Vs. Gulam Nabi Abdul Rehman. It has been held in 2006(3) Criminal Law General page 1 Gorantla Venkateshwara Rao Vs CS-31/12 Page No.9/12 Kolla Veera Raghava & Anr. that "if there is any misuse of cheque the drawer should take immediate step and to protest immediately and should not wait until the conclusion of the trial and adverse interference is therefore required to be taken against the accused". If the plaintiff had misused the cheques then the defendants could have asked his banker to stop the payment rather the cheques in question were returned back to plaintiff with remarks of funds insufficient and when it is admitted case of defendants that they suffered huge losses and also closed their business then it is clearly apparent that it was the defendants who defaulted in payment and plaintiff did not misuse the cheques. Hence in view of the above discussion, the plea of defendants regarding misuser of the cheques in question by the plaintiff is hereby rejected.
9. It is also contended by the defendants that the present suit does not fall within the purview of summary suit u/o 37 CPC since the same does not fulfill the ingredients of the same. The suit of the plaintiff is based on cheques which being negotiable instrument are duly covered u/o 37 CPC. Hence the said contention of the defendants is also rejected.
10.Accordingly in view of the above, it is held that no triable issues have been raised by the defendants and accordingly leave to defend application filed by defendants is CS-31/12 Page No.10/12 dismissed and consequently instant suit is decreed with cost for a sum of Rs. 13,69,188/- in favour of plaintiff and against the defendants. As far as interest is concerned, it is argued argued on behalf of the defendants that if interest is claimed in a suit then it is not covered u/o 37 CPC. However I disagree with the same and reliance is placed upon 1991 Civil Court Cases 99(DELHI) titled as Khera Handlook Supply Vs. O.B. Exporters and others wherein it was held that " summary suit can be filed based on bills of exchange, hundies and promissory notes even when there is no promise to pay interest at a specified rate" as well as that " if the cheques are issued and are dishonoured then debtor is liable to pay interest for having deprived the plaintiff of his money". Rather in the case mentioned supra there was no agreed rate of interest whereas the present case is on much better footing since rate of interest is mentioned in the bills/invoices. It is further submitted on behalf of the defendants that claim of plaintiff pertaining to the interest is self contradictory since in the invoices at one place interest rate is mentioned as 24% and on the other it is mentioned as 18% p.a.. Though it is correct that two different rate of interest are mentioned on the invoice but the plaintiff has claimed the interest @ 18% p.a in the present suit. As is already observed since defendants never disputed the invoices/bills therefore they are governed by the terms and conditions mentioned on the same and rather the plaintiff has chosen the lower rate of interest out of the two rates mentioned in the invoices/bills, hence no CS-31/12 Page No.11/12 ground made out to deny the plaintiff the rate of interest @ 18% p.a.. Accordingly plaintiff is also awarded interest @ 18% p.a. w.e.f April,2011( month of issuance of first cheque bearing no. 286453) till realisation. Decree sheet be prepared. File be consigned to record room.
Announced in open court (AJAY GOEL)
on 6.2.14. ADJ-12(Central)/Delhi.
CS-31/12 Page No.12/12