Delhi District Court
M/S Bharat Agencies Pharmaceutical ... vs Hscc (India) Ltd on 3 September, 2025
IN THE COURT OF SH. HARVINDER SINGH JOHAL :
DISTRICT JUDGE-02 & WAQF TRIBUNAL :
PATIALA HOUSE COURTS : NEW DELHI
CS No. 506/2017
CNR No. DLND01-005634-2017
IN THE MATTER OF :
M/s Bharat Agencies Pharmaceutical Distributors .... Plaintiff
VERSUS
HSCC ( India) Limited & Anr. .....Defendants
ORDER
1. This order of mine shall dispose of two separate applications of leave to defend filed by defendant no.1 and 2 in a summary suit filed by the plaintiff for recovery of Rs.41,32,208/- alongwith interest.
2.1 The plaintiff firm is a propertier-ship firm based in Delhi having its office at 262, Hari Nagar, Ashram Mathura, New Delhi-110 014 and deals in the business of pharmaceuticals products and medicines across India. Plaintiff pleads that he is an authorized distributor of M/s Cipla CS No. 506/2017 1 / 32 Limited in India.
2.2 The defendant's parties are connected to each other. Defendant no.1 is HSCC ( India) Ltd. Enterprises under ages of Family and Welfare dealing with the consultancy and procurement management services on behalf of Ministry of health and family welfare, whereas defendant no.2 i.e Central Government Health Scheme ( hereinafter referred to as "CGHS") is also a division under the Ministry of Health and Family Welfare, Government of India was constituted with an objective of providing comprehensive medical care facilities to Government employees, pensioners and their dependent residing in CGHS covered cities. The defendant no.3 is the Ministry of Family and Health Welfare in the Government of India.
2.3 Brief facts of the present case sans unnecessary details is that defendant no.1 had issued a supply order for procurement of the medicines for the CGHS dispensaries in Delhi for the year 2012-2013 vide bearing a reference no. HSCC/PUR/Propritary/3rd Instalment/2012- 13/3220" for a total consideration of Rs.1,52,56,262.95/- in the name of the M/s Cipla Limited, which is situated in Connaught Place, New Delhi. After receiving the said order, a request-cum-representation was made by M/s Cipla Limited that a company can only supply medicines through its authorized representative i.e. plaintiff/ M/s Bharat Agencies CS No. 506/2017 2 / 32 Pharamceutical Distributors. On the request of M/s Cipla Limited, defendant no.1 issued an amended Supply Order in favour of plaintiff for supply of the goods as per the terms of the letter issued by defendant no.1 dated 10.12.2013.
2.4 The relevant terms and conditions of the Amended Supply Order is as follows:
a. The plaintiff was required to supply sixteen different medicines to CGHS, with a cumulative quantity of Rs.10,88,445/- at the Sale Consideration.
b. As per Term 2, Plaintiff to furnish a performance security deposit for 5% of the Sale Consideration inclusive of taxes, totaling to Rs.8,01,000/-, which was furnished by M/s Cipla Limited on behalf of the plaintiff, and acceptable to the defendant no.1.
c. Terms 4, requires that the goods be supplied by the plaintiff within 60 days from the date of this Supply Order to the CGHS, Medical Stores Department (hereinafter referred to as the "MSD") and the delivery of the medicines had to be made as per the supply CS No. 506/2017 3 / 32 schedule provided by CGHS(MSD).
d. Term 5 provided that the plaintiff could only dispatch the goods after inspection was to be carried out jointly by defendant no.1 and defendant no.2.
e. As per the payment term detailed in Term 21 of the Supply Order, the plaintiff had to raise the bills in favour of defendant no.3 through defendant no.1. Additionally, the plaintiff was required to supply the copy of the bills in triplicate, along with copies of Supply Order, consignee receipt certificate, the inspection note, the ECS details alongwith the RTGS number of the plaintiff, warranty certificate, penalty clause certificate and fall clause certificate. Thus, it is categorically clear from the terms of amended supply order that plaintiff was to raise its invoice in the name of Defendant no3 through defendant no.1 and M/s Cipla Limited was also required to issue the requisite certificates in the name of defendant no.3 through Defendant no.1.
2.5 The said Terms 21 of the Supply order is hereby reproduced as follows:CS No. 506/2017 4 / 32
"21 Payment shall be made on the basis of receipt of bills submitted by the manufacturer in favour of MOH&FW through HSCC (I) Ltd., Noida, in triplicate, Copies of Purchase Order alongwith original CGHS (MSD) consignee receipt, dispatch cum inspection notice, ECS details including RGTS number of the manufacturer, Warranty Certificate, Falls Clause, & acceptance of Penalty Clause in the standard format enclosed with the bid document & Sales Tax Declaration Indicating that CST/LST/VAT charges had been paid to the concerned Government, duly signed with rubber stamp of the firm. Warrant Certificate/Fall Clause. Penal Clause undertaking must be issued in favour of MOH&FW through HSCC(I) Ltd., Noida in triplicate (Duplicate copies should be attested) by the competent authority of the manufacturer only.
2.6 That in furtherance of the Supply Order and in compliance of its terms laid down by defendant no.1, M/s Cipla Limited i.e. manufacturer of the medicines, wrote a letter to defendant no.1 on 23.12.2013 offering 11 of the 16 medicines for the purposes of inspection by the defendant no.1 at the office of plaintiff. Further, vide two separate communications to defendant no.1, M/s Cipla Limited again wrote letters on CS No. 506/2017 5 / 32 08.01.2014 and 22.01.2014 to defendant no.1 offering the inspection of all the remaining four medicines at the address of the plaintiff. The said request was accepted by defendant no.2 vide letter dated 21.02.2014 and the inspection was carried out by defendant no.2 through Dr. Anil Kumar and Sh Vivek Kumar of CGHS on 24.01.2024 qua the first communication of 11 medicines inspection.
2.7 Subsequently vide communication dated 10.02.2014, with reference number PT.F.No.27-03/12-13/CGHS/MSD/7510 defendant no.2 wrote to defendant no. 1 accepted the second request of inspection of the aforesaid four medicines to be supplied under the Supply Order. Subsequently, the inspection was carried out by Dr S. K.Maurya and Sh. Ashok Kumar of CGHS on 14.02.2014 at the office of the plaintiff and same was found to be acceptable and was cleared for delivery to defendant no.1.
2.8 After receiving clearance from defendant no.1 and defendant no.2, it was communicated by the plaintiff that medicines are ready for supply in compliance of Supply Order.
2.9 After being satisfied by the inspection of the products offered by M/s Cipla Limited at the office of plaintiffs, defendant no.2 vide two separate Supply Orders directed defendant no.1 for supply of the first set CS No. 506/2017 6 / 32 of eleven medicines by 19.02.2014 and for supply of second set of four medicines by 14.03.2014. It is the case of the plaintiff that all the medicines in the requisite quantities were supplied to the defendant no.1 for further supplying to defendant no.2 as per the dates requested, thereby plaintiff has complied with all the terms of supply orders and all the medicines were supplied within the time provided by the defendant.
2.10 In compliance of the terms as mentioned in Clause 21 of the Supply Order and after supply of all the 15 medicines, two bills were raised in the name of defendant no.3 through defendant no.1 alongwith all the documents which are required. The documents supplied alongwith the bills are as follows:
1. Bill in triplicate
2. Tax Invoice
3. Consignee Receipt Certificate
4. Copy of Inspection and Dispatch Note
5. Copy of supply Schedules
6. Copy of Supply Order
7. Warrant Certificate issued by M/s Cipla Limited in favour of defendant no.3
8. Fall Clause Certificate issued by M/s Cipla Limited in favour of CS No. 506/2017 7 / 32 defendant o.3
9. Penal Clause Certificate issued by M/s Cipla Limited in favour of defendant no.3
10. Undertaking issued by M/s Cipla Limited in favour of defendant no.1.
2.11 Pursuant thereto, two bills were raised by the plaintiff with the first bill dated 26.03.2024 bearing bill no. SP no. 1572 for an amount of Rs.61,94,305/- against the Supply Order. The second bill with bill no. SP 1734 was raised by plaintiff on 27.03.2014 amounting to Rs. 97,37,903/- in the name of defendant no.3 through defendant no.1. Thereafter, plaintiff becomes entitled to recover an amount of Rs,1,59,32,209.47 as on 27.03.2014 against the supply of two orders for all the 15 medicines as ordered by defendant no.2 through defendant no.1. However, despite of passing of sufficient time, defendant no.3 was delaying in releasing the payment, thereafter several communications were made with defendant no.2 and defendant no.3 for the purposes of the release of the said amount . It is the case of the plaintiff that as on 16.08.2014, the total due pending against the defendants was Rs. 1,73,69,959/- which is primarily on account of the two bills raised against 15 medicines amounting to Rs. 1,59,32,209.47 which is in dispute before this court and an amount of Rs.14,32,208/- on account of the old bills raised by the plaintiff to the defendants.CS No. 506/2017 8 / 32
2.12 Thereafter the defendants paid the previous pending amount of Rs.14,32,208/- to the plaintiff. However, the only pending amount to be paid by the defendants is towards the supply of these two Supply Orders, which is of Rs. 1,59,32,32,209/-. However, despite of delay of several months, the money was not paid to the plaintiff. After his constant efforts and regular follow ups, defendant no.1 finally paid an amount of Rs.1,18,00,000/- on 16.10.2015 through cheque vide no. 823859 dated 14.10.2015 from the SBI Account No. 172501000017161. After the said payment, an amount of Rs. 41,32,208/- is pending from the defendants to be paid to plaintiff.
2.13 At the time of making payment of Rs. 1,18,00,000/- certain deductions were made on behalf of the defendant, under different heads of calculations for non-supply of certain amount of drugs amounting to Rs.91,000/- which was deducted and admitted to be correct deduction by the plaintiff.
2.14 After this part-payment, several requests were made by the plaintiff with defendant no.1 for the payment of pending amount of Rs. 41,32,208/- but despite of passing of substantial time period, the payment was not paid and aggrieved by the conduct of the defendants, legal notice U/s 80 of CPC was served upon the defendant on 13.06.2016 however, defendants have not replied to the said legal notice and aggrieved by the CS No. 506/2017 9 / 32 conduct of the defendants, the present suit U/o 37 CPC filed by the plaintiff for recovery of amount of Rs 41,32,208/- alongwith interest to be paid by the plaintiff till date alongwith pendelite interest and with a prayer that award cost be allowed in favour of the plaintiff.
2.15 Summons for appearance was sent by plaintiff to all the defendants and defendant no.1 and defendant no.2 appeared before the court on 20.09.2017 and defendant no. 3 on 04.09.2018. Thereafter an application for summons for judgment was filed by the plaintiff against which two leave to defend applications were filed, which is now under consideration of this court. First application for leave to defend was filed by defendant no.1 and second application for leave to defend was filed by defendant no.2 . However, it is pertinent to mention herein that, however, till date defendant no.3 has not filed any application for leave to defend. Moreover, they were not appearing in the matter, therefore, they were proceeded ex-parte on 28.11.2024.
CONTENTS OF THE LEAVE TO DEFEND ARE AS FOLLOWS:
3. As per the facts pleaded by defendant no.2 in his application for leave to defend, certain preliminary objections were raised, which are more or less formal in nature, whereby, it is submitted by the defendant CS No. 506/2017 10 / 32 that documents are not supplied to the defendant no.2 and the case is not maintainable U/o 37 CPC as there was no written agreement between the plaintiff and defendant no.2.
4. Further defendant no.2 pleads that plaintiff has never raised any demand from defendant no.2 and defendant no.2 has never agreed or acknowledged any pending amount to be paid to the plaintiff, therefore, there is no cause of action against defendant no.2. There is contract only between defendant no.1 and defendant no.2 and where defendant no.2 role is confined to placing an order as per the requirement and defendant no.1 has the duty to ensure compliance of the orders alongwith timely delivery of medicines and to do all the procedural requirements for the purposes of placing of orders, receiving of orders and subsequently payment on behalf of defendant no.3.
5. Further, it is the case set up defendant no.2 that an amount of Rs. 43,42,97,721/- was issued on 15.10.2014 and an amount of Rs.20,09,43,094/- was issued by defendant no.2 on behalf of defendant no.3 on 26.08.2015 in favour of defendant no 1 for the purposes of making the payment, therefore, even if payments are still due then only defendant no.1 is liable to make the payment and defendant no.2 is not liable to make any such payment.
6. Therefore, on these grounds, it is pleaded by defendant no.2 that CS No. 506/2017 11 / 32 there are triable issues involved, therefore, leave to defend may be allowed and opportunity may kindly be granted to defendant no.2 to defend the matter on merits, primarily on the ground that it has no liability.
7. Now coming to the application for leave to defendant filed on behalf of defendant no.1, certain brief facts have been stated by defendant no.1 in this application by defendant no.1 that defendant no.2 entered into contract for consultancy services with him in the year 2002 for procurement of drugs proprietary as well as generic for CGHS dispensaries in Delhi. The said contract was extended from time to time and last extension of the above said was done by the parties by executing the contract for consultancy services on 01.06.2012. It is further pleaded that the role of the defendant no.1 amongst others is primarily for placement of order as per the specification and quantities provided by defendant no.2, arranging inspection alongwith defendant no.2 representatives of the goods (proprietary /generic drugs) getting the samples tested from the Government approved labs medicines, on acceptance of test results issue dispatch clearance, arrange for receipt of materials at CGHS, MSD(medical Store Depot) Gole Market and arranging payment to the suppliers from the funds made available by Defendant no.2 to defendant no.1 etc. It is further pleaded that vide inquiry no. PS/2/TE/PROP/2009-10/29075-140, dated 08.02.2010 quotations were invited by Medical Store Organisation (MSO), a CS No. 506/2017 12 / 32 department of Directorate General of Health Services of Ministry of Health and Family Welfare from the manufacturers of Proprietary Formulary Drugs for 2010-2011. It is further pleaded that the quotations in response to the letter dated 08.02.2010 were submitted by the manufacturers including the M/s Cipla Limited. It is further pleaded that MSO, after submission of quotation from M/s Cipla Limited, had negotiations meeting with him to finalize the rates. It is further stated that for finalization of the rates by MSO with M/s Cipla Limited, the RC was sent to M/s Cipla Limited, and copy amongst others were given to defendant no.2 and defendant no.1. It is further stated that validity of the RC between MSO and M/s Cipla Limited was extended by letter bearing no F.N. Y110011/2/2011-St-ii(part-II) dated 14.08.2013 issued by MSO to M/s Cipla Limited. It is further stated defendant no.2 being the Purchaser of the medicines, after assessing the requirement of the medicines/drugs, vide its letter no. File NO. (pt-1) 27-02/11-12(CGHS/MSD/5702-08 dated 18.11.2013 asked the defendant no.1 to arrange the supply of medicines/drugs as per the quantity mentioned under 3rd Installment and further the defendant no.2 directed the Supply Order will be governed by the terms and conditions mentioned in the above said inquiry and in extension of RC dated 14.08.2013. It is further stated that on receipt of letter dated 18.11.2013, the defendant no.1 for and on behalf of defendant no.2, placed the Supply Order dated 10.12.2013 on the M/s Cipla Limited with a copy to the defendant no.2. It is further stated that vide letter dated 11.12.2013, CS No. 506/2017 13 / 32 M/s Cipla Limited informed that they have authorised the plaintiff as their authorised distributor and that the plaintiff will execute the supply order dated 10.12.2013 on their behalf and accordingly requested to amend the Supply Order in favour of the plaintiff. It is further stated that defendant no.2 thereafter vide its letter dated 17.02.2014 and 12.03.2014, informed the name of the medicines, quantities and date of supply to defendant no.1 and asked to arrange the supply accordingly, the copy of the said letters were also marked to M/s Cipla Ltd. It is further stated that plaintiff after making the supply of medicines on defendant no.2 raised the invoices number SB-1572, dated 18.02.2014 for an amount of Rs.61,94,305.00 inclusive of VAT and invoice no. SB-1734 dated 13.03.2014 for an amount of Rs.97,37,903 inclusive of VAT on the defendant no.2 through defendant no.1 alongwith invoices, the plaintiff amongst others submitted consignee receipt certificates issued by defendant no.2 by which the defendant no.2 acknowledging the receipt of medicines. It is further stated that defendant no.1 scrutinized the above said invoices raised by the plaintiff in terms of the Supply Order and observed that the following tablets were not supplied by the plaintiff:
(I) AMLOPRES Z TAB, 2000 numbers
(ii) AMLOPRES AT TAB, 05 numbers
(iii) AMLOPRES L TAB, 05 numbers
8. It is further stated that on account of non-supply of the above CS No. 506/2017 14 / 32 medicines, LD deduction of Rs.4343.33 (being the 5% of the amount of above mentioned non supplied medicines) as per the terms of the supply order was done from the invoices amount, and accordingly certified the above invoices as under:
(i) Total amount claimed in invoice numbers SB-1572 and SB-1734 Rs. 1,59,32,209/-
(ii) Less Recoveries
(a) LD towards non supply of drugs Rs. 4,343/-
(iii) Amount Certified for payment Rs. 1,59,27,866/-
9. It is further stated that from the certified amount of Rs.1,59,27,866, the defendant no.1 on behalf of defendant no.2 arranged the payment of Rs.1,18,00,000/- to the plaintiff on 14.10.2015 from the funds of defendant no.2 available with them and balance payment of Rs.
41,27,866/- could not be arranged by defendant no.1 on behalf of defendant no.2 for payment to plaintiff due to non-availability of funds. It is further stated that defendant no.1 has written various letters of defendant no.2 to make the funds available so that due payment of suppliers including the plaintiff can be released but till date funds are not made available by defendant no.2 to the defendant no.1 as result of which defendant no.1 could not arranged for the balance payment of Rs.41,27,866/-.
CS No. 506/2017 15 / 3210. Thereby on the basis of these submissions, the defendant no.1 has raised that there are three triable issues, which are required to be adjudicated for the just adjudication of the matter, these triable issues mentioned in the application for leave to defend filed by defendant no.1 are as follows:
a) who is the purchaser in the present suit?
b) who has the liability to make the payment to the plaintiff?
c) Whether decree can be passed against the defendant no.1 in its
personal capacity when the defendant no.1 is the agent of disclosed principal viz defendant no.2?
11. On the basis of these submissions, it is humbly prayed by defendant no.1 that there are certain triable issues, which are involved and for the just adjudication of the matter, the application for leave to defend be allowed and opportunity be granted to defendant no.1 to file his proper defences in proper ordinary suit so that matter can be adjudicated on merits.
12. I have heard the ld. Counsels for the parties and have perused the record.
MAINTAINABILITY
13. It is also settled law of the land that summary suits are applicable if they complied with the terms as mentioned U/O 37 of the CPC. The CS No. 506/2017 16 / 32 relevant provisions of Order 37 rules 1 & 2 of CPC is hereby reproduced as under:-
1. Courts and classes of suits to which the Order is to apply.--
(1) This Order shall apply to the following Courts, namely :--
(a) High Courts, City Civil Courts and Courts of Small Causes; and
(b) other Courts:
Provided that in respect of the Courts referred to in clause (b), the High Court may, by notification in the Official Gazette, restrict the operation of this Order only to such categories of suits as it deems proper, and may also, from time to time, as the circumstances of the case may require, by subsequent notification in the Official Gazette, further restrict, enlarge or vary, the categories of suits to be brought under the operation of this Order as it deems proper.
(2) Subject to the provisions of sub-
rule (1), the Order applies to the following classes of suits. namely:
(a) suits upon bills of exchange,hundies and promissory notes;
(b) suits in which the plaintiff seeks only to recover a debt or liquidated demand in money payable by the CS No. 506/2017 17 / 32 defendant, with or without interest, arising,--
(i) on a written contract; or
(ii) on an enactment, where the sum sought to be recovered is a fixed sum of money or in the nature of a debt other than a penalty; or
(iii) on a guarantee, where the claim against the principal is in respect of a debt or liquidated demand only.
14. Therefore, relying on the above mentioned provision, it is categorically clear that if there is any ascertained liquidated sum of claim made by the plaintiff against the defendants than that the same can be treated as summary suit and such suits can be allowed subject to the fact that there are no triable issues involved. Since a ascertained sum of money is claimed by plaintiff against defendant, therefore, prima facie Order 37 suit is maintainable.
ADMISSIONS
15. Further, it is the settled law of the land that once the defendant's has admitted all the facts, which are pleaded by the plaintiff in the suit thereby by relying on Section 58 of The Indian Evidence Act, no evidence is required to be led on any side for establishing these facts, CS No. 506/2017 18 / 32 which are pleaded by plaintiff and admitted by defendants, therefore, there is per se no merits in the grounds raised by defendant no.1 for granting leave to defend. Section 58 of The Indian Evidence Act reproduced as under:-
58. Facts admitted need not be proved. No fact need be proved in any proceeding which the parties thereto or their agents agree to admit at the hearing, or which, before the hearing, they agree to admit by any writing under their hands, or which by any rule or pleading in force at the time they are deemed to have admitted by their pleadings:Provided that the Court may, in its discretion, require the facts admitted to be proved otherwise than by such admissions.
16. Relying upon the above mentioned, let us look at the facts admitted by the defendant no.1. These facts are:
a. That defendant no.2 entered into contract for consultancy services with Defendant no.1 in the year 2002 for procurement of drugs proprietary as well as generic for CGHS dispensaries in Delhi. The said contract was extended from time to time and last extension of the above CS No. 506/2017 19 / 32 said was done by the parties by executing the contract for consultancy services on 01.06.2012.
b. That the role of the defendant no.1 amongst others is primarily for placement of order as per the specification and quantities provided by defendant no.2, arranging inspection alongwith defendant no.2 representatives of the goods (proprietary /generic drugs) getting the samples tested from the Government approved labs medicines, on acceptance of test results issue dispatch clearance, arrange for receipt of materials at CGHS, MSD(medical Store Depot) Gole Market and arranging payment to the suppliers from the funds made available by Defendant no.2 to defendant no.1 etc. c. It is further pleaded that vide inquiry no. PS/2/TE/PROP/2009- 10/29075-140, dated 08.02.2010 quotations were invited by Medical Store Organisation (MSO) a department of Directorate General of Health Services of Ministry of Health and Family Welfare from the manufacturers of Proprietary Formulary Drugs for 2010-2011.
d. It is further pleaded that the quotations in response to the letter dated 08.02.2010 were submitted by the manufacturers including the M/s Cipla Limited.CS No. 506/2017 20 / 32
e. It is further pleaded that MSO, after submission of quotation from M/s Cipla Limited, had negotiations meeting with him to finalize the rates. It is further stated that finalization of the rates by MSO with M/s Cipla Limited, the RC was sent to M/s Cipla Limited, and copy amongst others were given to defendant no.2 and copy to defendant no.1 f. It is further stated that validity of the RC between MSO and M/s Cipla Limited was extended by letter bearing no F.N. Y110011/2/2011- St-ii(part-II) dated 14.08.2013 issued by MSO to M/s Cipla Limited.
g. The defendant no.2 being the Purchaser of the medicines, after assessing the requirement of the medicines/drugs, vide its letter no. File NO. (pt-1) 27-02/11-12(CGHS/MSD/5702-08 dated 18.11.2013 asked the defendant no.1 to arrange the supply of medicines/drugs as per the quantity mentioned under 3rd Installment and further the defendant no.2 directed the supply order will be governed by the terms and conditions mentioned in the above said inquiry and in extension of RC dated 14.08.2013.
h. It is further stated that on receipt of letter dated 18.11.2013, the defendant no.1 for and on behalf of defendant no.2, placed the Supply Order dated 10.12.2013 on the M/s Cipla Limited with a copy to the defendant no.2.
CS No. 506/2017 21 / 32i. It is further stated that vide letter dated 11.12.2013, M/s Cipla informed that they have authorised the plaintiff as their authorised distributor and that the plaintiff will execute the supply order dated 10.12.2013 on their behalf and accordingly requested to amend the Supply Order in favour of the plaintiff.
j. It is further stated that defendant no.2 thereafter vide its letter dated 17.02.2014 and 12.03.2014, informed the name of the medicines, quantities and date of supply to defendant no.1 and asked to arrange the supply accordingly, the copy of the said letters were also marked to M/s Cipla Limited.
k. It is further stated that plaintiff after making the supply of medicines on defendant no.2 raised the invoices number SB-1572, dated 18.02.2014 for an amount of Rs.61,94,305.00 inclusive of VAT and invoice no. SB-1734 dated 13.03.2014 for an amount of Rs.97,37,903 inclusive of VAT on the defendant no.2 through defendant no.1 alongwith invoices, the plaintiff amongst others submitted consignee receipt certificates issued by defendant no.2 by which the defendant no.2 acknowledging the receipt of medicines.
l. It is further stated that defendant no.1 scrutinized the above said CS No. 506/2017 22 / 32 invoices raised by the plaintiff in terms of the supply order and observed that the following tablets were not supplied by the plaintiff:
(I) AMLOPRES Z TAB, 2000 numbers
(ii) AMLO PRES AT TAB, 05 numbers
(iii) AMLOPRES L TAB, 05 numbers
m. It is further stated that on account of non-supply of the above
medicines, LD deduction of Rs.4343.33 (being the 5% of the amount of above mentioned non supplied medicines) as per the terms of the supply order was done from the invoices amount, and accordingly certified the above invoices as under:
(I) Total amount claimed in invoice numbers SB-1572 and SB-1734 Rs. 1,59,32,209/-
(ii) Less Recoveries
(a) LD towards non supply of drugs Rs. 4,3,43/-
(iii) Amount Certified for payment Rs, 1,59,27,866/-
n. It is further stated that from the certified amount of
Rs.1,59,27,866/- the defendant no.1 on behalf of defendant no.2 arranged the payment of Rs.1,18,00,000/- to the plaintiff on 14.10.2015 from the funds of defendant no.2 available with them and balance payment of Rs.
41,27,866/- could not be arranged by defendant no.1 on behalf of CS No. 506/2017 23 / 32 defendant no.2 for payment to plaintiff due to non-availability of funds.
o) It is further stated that defendant no.1 has written various letters of defendant no.2 to make the funds available so that due payment of suppliers including the plaintiff can be released but till date funds are not made available by defendant no.2 to the defendant no.1 as result of which defendant no.1 could not arranged for the balance payment of Rs.41,27,866/-.
17. Thereby in essence the defendant no.1 has admitted all the facts of the present case in his leave to defend application thereby no triable issue is pending for adjudication of the matter.
18. Now coming to the grounds of defence raised by defendant no.1. It is matter of fact that though defendant no.1 has raised several grounds for adjudication of the matter on merits, however, this court is of the firm opinion that in essence the defendant no.1 has admitted the entire case of the plaintiff qua placing of order, satisfaction of medicines after inspection and placing of two Supply Orders by defendant no.1 for 15 medicines, which were required to be supplied and had actually supplied by plaintiff to defendant no.2 and even bills are raised by plaintiff in favour of defendant no.3 through defendant no.1 in compliance of the terms of the Supply Order.
CS No. 506/2017 24 / 3219. Therefore, there is per se no merits in the grounds raised by defendant no.1 for granting leave to defend.
20. Even though the three issues which are raised by defendant no.1 which are required to adjudicated through proper trial. However, this court is not inclined for the reasons mentioned below:
ISSUE NO.1 & 2 a) who is the purchaser in the present suit?
b) who has the liability to make the payment to the plaintiff?
21. The first issues raised by defendant no.1 is qua the purchaser of medicines in the present suit. However, this issue is already settled on the basis of the documents placed on record by the plaintiff as well as defendant no.1. The Supply order dated 10.12.2013 is apparently clear that the medicines are purchased in the name of defendant no.3 by defendant no.1 to be supplied to defendant no.2. Further the rules 21 of the Supply Order clearly depicts that the bills of the medicines are required to be raised in the name of Ministry of Health and Family Welfare. The said rules 21 is hereby reproduced:
"21 Payment shall be made on the basis of receipt of bills submitted by the manufacturer in favour of CS No. 506/2017 25 / 32 MOH&FW through HSCC (I) Ltd., Noida, in triplicate, Copies of Purchase Order alongwith original CGHS (MSD) consignee receipt, dispatch cum inspection notice, ECS details including RGTS number of the manufacturer, Warranty Certificate, Falls Clause, & acceptance of Penalty Clause in the standard format enclosed with the bid document & Sales Tax Declaration Indicating that CST/LST/VAT charges had been paid to the concerned Government, duly signed with rubber stamp of the firm. Warrant Certificate/Fall Clause. Penal Clause.undertaking must be issued in favour of MOH&FW through HSCC(I) Ltd., Noida in triplicate (Duplicate copies should be attested) by the competent authority of the manufacturer only.CS No. 506/2017 26 / 32
22. Therefore, on the basis of Term 21 of this rules, it leaves no room for doubt that the supply order was placed on the behalf of defendant no.3, who is liable to pay the outstanding amount. Moreover defendant no.2 and 1 are agencies of defendant no.3 who are acting under the directions of defendant no.3 for the welfare of the people and defendant no.3 is the main party i.e. Ministry of Health and Family Welfare, who is liable to make the payment of the medicines, which is admittedly supplied by the plaintiff to defendant no.2 through defendant no.l.
23. For the reasons mentioned above, even the second issue, which is raised by defendant no.1 qua the liability to make payment to the plaintiff can be ascertained, since the bills are raised in the name of defendant no.3 in compliance of the Supply order, which is issued by defendant no.1. /therefore, it is categorically clear that defendant no.3 is liable to make the payment to the plaintiff for the due amount of Rs.41,27,866/- alongwith interest ISSUE NO.3:
c) Whether decree can be passed against the defendant no.1 in its personal capacity when the defendant no.1 is the agent of disclosed principal viz defendant no.2?
24. The third issue which is raised by defendant no.1 is qua the CS No. 506/2017 27 / 32 personal liability of defendant no.1. To answer this issue, it is categorically clear that defendant no.1 is one of the subsidiary of MHO for the government of India, who is acting as a liasioning agent on behalf of defendant no.3 for supplying medicines to defendant no.2 through a proper network established, thereby the role of defendant no.1 for placing order to the pharmaceutical companies and to ensure that goods are in proper shape as per directions of defendant no.2 and when a specific order is placed by defendant no.2 the said medicines should be supplied by plaintiff through him to defendant no.2, therefore it is apparently clear that defendant no.1 is agent of defendant no.2 & 3 and can not be held liable for the payment of the outstanding dues. Moreover, as held above that actual liability of dues lies squarely upon defendant no.3. Therefore, defendant no.1 is not personally liable.
25. Therefore, all the issues raised by defendant no.1 in leave to defend application can easily be ascertained at this stage without allowing leave to defend and to force plaintiff to establish the fact which are already admitted. It is clear from the facts pleaded, documents placed on record by plaintiff, along with admissions made by defendant no.1 on behalf of defendant no.3, that there is no merit in the grounds raised by defendant no.1 and the applications filed by defendant no.1 is liable to be dismissed as devoid of any merits. All the three triable issues raised by defendant no.1 are clearly ascertainable at this stage and plaintiff is not required to prove any fact which is already admitted by CS No. 506/2017 28 / 32 defendant no.1. Therefore, the application for leave to defend filed by defendant no.1 is devoid of merits and consequently stand dismissed.
26. Now coming to the facts stated in leave to defend filed by defendant no.2. More or less, certain frivolous grounds qua documents non- availability which is raised by defendant no.2. There were ample opportunity available to the defendant no. 2 to obtain all the documents filed with the plaint, even if they were not supplied with the summons. The law of presumption is in favour of the fact that official functions have been properly performed U/s 114(e) of The Indian Evidence Act, 1972. Therefore, there is no merit in preliminary objections raised by defendant no.2 and this court is of the opinion that all the documents were indeed supplied or availed by defendant no.2 based on this presumption. Moreover, leave to defend has been filed is evidence enough to establish that defendant no.2 had all the documents in his possession.
27. Moreover, the object qua maintainability of present suit as summary suit has already been upheld by this court that present suit is maintainable by relying on the provisions of Order 37 Rule 1 CPC, whereby ascertained sum of money is claimed in the present summary suit by the plaintiff, therefore, summary suit is maintainable in its present form.
CS No. 506/2017 29 / 3228. Further the ground raised by the defendant that an amount of Rs. 43,42,97,721/- was given by defendant no.2 to defendant no.1 on 15.10.2014 and an amount of Rs.20,09,43,094/- was given by defendant no.2 to defendant no.1 on 26.08.2015 for the purposes of the said payment has no bearing in the present suit as all the bills were directed to be raised in the name of defendant no.3 as per purchase order. Defendant no.2 though mentioned that there is no contract with the plaintiff, however, such a ground is not required to be ascertained as defendant no.2 is an agent acting under the directions of defendant no.3 for the welfare of pensioners and other persons covered under the CGHS scheme. Therefore, as such the ground raised by defendant no.2 are frivolous in nature and there is no merits in the contentions raised by defendant no.2. therefore, on the basis of reasoning mentioned above, the application for leave to defend filed by defendant no.2 is dismissed being devoid of any merits.
29. As a percussion to the discussion mentioned above, it is ample clear from the facts the valid Purchase Order were raised by defendant no.2 through defendant no.1 on the basis of the agreement between defendant no.1 and defendant no.2 and in compliance of the said order, plaintiff has complied with all the terms and conditions in the agreement for the purposes of purchase order. Further, the product were made available for inspection and after the satisfaction of the inspection by defendant no.2, two Supply orders were placed and in compliance of the CS No. 506/2017 30 / 32 same, medicines were supplied by the plaintiff which is acknowledged by defendant no.1 to have been received and provided to defendant no.2. Therefore, in essence the entire case of the plaintiff is established. Even the bills with all the documents had been raised after supplying medicines and out of the total due of Rs. Rs.1,59,27,866/-, an amount of Rs. 1,18,00,000/- had already been paid. The total due amount of Rs.41,27,866/- is pending which is required to be paid by defendant no.3. It is also categorically cleared from the arguments mentioned above that liability clearly lies with defendant no.3 as defendant no.1 and defendant no.2 are two arms of defendant no.3, who are acting under the directions of defendant no.1. In compliance of the terms mentioned in Term 21 of the purchase order, the bills were raised in favour of defendant no.3 through defendant no.1.
30. Defendant no.3 had not even filed any application for leave to defend and thereby admits the case of the plaintiff. The present suit is decreed and both the applications for leave to defend filed by defendant no.1 and defendant no.2 are dismissed being devoid of merits. Plaintiff is entitled an amount of Rs.41,27,866/- with further interest at the rate of 6% from the date of delivery till the date of suit with the further interest @ 18% per annum from the date of suit till the date of payment. The said interest at 18% is required to be paid by defendant no.3 because of the commercial nature of the dispute and problems faced by the plaintiff due to non-payment for such a prolonged period. There is no merit in the CS No. 506/2017 31 / 32 ground raised by the defendant nos 1 & 2, therefore the cost of suit is awarded in favour of the plaintiff against the defendants.
31. Suit is decreed whereby defendant no.3 is liable to pay plaintiff an amount of Rs.41,27,866/- with interest at the rate of 6% from the date of delivery till the date of suit with the further interest @ 18% per annum from the date of suit till the date of payment.
32. File be consigned to record room after due compliance.
Announced in the open court on 03.09.2025 (Harvinder Singh Johal) DJ-02 & Waqf Tribunal NDD/PHC/ND/03.09.2025 CS No. 506/2017 32 / 32