Karnataka High Court
M/S F1 Infotech (P) Ltd vs M/S Texonic Instruments on 19 November, 2021
Author: Alok Aradhe
Bench: Alok Aradhe
1
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 19th DAY OF NOVEMBER, 2021
PRESENT
THE HON'BLE MR. JUSTICE ALOK ARADHE
AND
THE HON'BLE MR. JUSTICE ANANT RAMANATH HEGDE
COMMERCIAL APPEAL NO.47 OF 2021
BETWEEN:
M/S F1 INFOTECH (P) LTD.
A PRIVATE LTD. COMPANY DULY REGISTERED
UNDER THE COMPANIES ACT 1956
HAVING ITS REGISTERED OFFICE
ED SSC PITAMPURA
NEW DELHI - 110 088
BY ITS DIRECTORS
MR.SUNIL GUPTA & MANISH MONOCHA ... APPELLANT
(BY SRI.B. PRAMOD, ADV.)
AND
M/S TEXONIC INSTRUMENTS
A REG.PARTNERSHIP FIRM HAVING
ITS OFFICE AT NO.387, 1ST CROSS
12TH MAIN, INDIRANAGAR
BENGALURU - 560 038
DULY REP. BY ITS PARTNERS
MR. H. MILAPCHAND
S/O LATE HANSRAJBHANDARI & SANDEEP
2
S/O MR. H. MILACHAND & ALSO
BY THE AUTHORISED SIGNATORY OF THE FIRM
MR. ANILRUNWAL
S/O MR. SUBHASCHANDRUNWAL
... RESPONDENT
(BY SRI. B. S. SATYANAND, ADV.)
THIS COMMERCIAL APPEAL IS FILED UNDER
SECTION 13(1) OF THE COMMERCIAL COURTS ACT, 2015
PRAYING TO ALLOW THE APPEAL AND THEREBY TO SET
ASIDE THE JUDGMENT AND DECREE DATED 10.12.2020 IN
COM.O.S.NO.5871/2016 BY THE COURT OF THE LXXXIII
ADDL.CITY CIVIL AND SESSIONS JUDGE AT BENGALURU
CITY (CCH 84) IN THE INTEREST OF JUSTICE AND EQUITY
AND PASS SUCH OTHER ORDER/S DEEMED JUST AND
PROPER IN THE FACTS AND CIRCUMSTANCES OF THE
CASE.
THIS COMMERCIAL APPEAL HAVING BEEN HEARD
AND RESERVED ON 16.11.2021 FOR JUDGMENT AND
COMING ON FOR PRONOUNCEMENT OF JUDGMENT THIS
DAY, ANANT RAMANATH HEGDE J, DELIVERED THE
FOLLOWING:
JUDGMENT
This Commercial Appeal is filed under Section 13(1) of the Commercial Courts Act, 2015 by the unsuccessful defendant, assailing the validity of the judgment and decree dated 10.12.2020 passed by the LXXXIII Additional 3 City Civil and Sessions Judge, Bengaluru City, in COM.O.S.No.5871/2016, whereby the suit of the plaintiff for recovery of Rs.1,33,27,421/- along with interest @ 18% p.a. is decreed in part, awarding a sum of Rs.1,12,89,706/- towards principal and interest on the said amount @ 9% p.a. as against the claim of 18% p.a.
2. For convenience, parties to this appeal are referred as per their ranking in the original suit.
3. The facts relevant for adjudication of this appeal are summarised as under:
The plaintiff being the wholesale dealer of computer components received purchase order on 25.03.2015 from the defendant. The purchase order comprised of three components namely Hardware, Software licenses, Maintenance and service. The order placed by the defendant referred above is found at Ex.P3.4
4. The plaintiff has pleaded that though it has complied its obligation in terms of purchase order at Ex.P3, the defendant failed to make the payment. It is the further case of the plaintiff that series of correspondences were exchanged between the plaintiff and the defendant and the controversy relating to arrears payable by the defendant was not resolved. It is also the case of the plaintiff that the defendant issued a cheque dated 08.10.2015 for Rs.1,11,17,024/- drawn on Yes Bank towards discharge of the debt. However, the defendant requested the plaintiff to defer the presentation of the cheque for collection. The plaintiff contends that the indulgence was shown by the plaintiff keeping in mind the business relationship and the cheque was not presented for collection on the scheduled date. The plaintiff further contends that despite sufficient time granted to the defendant to make good the payment, the same was not paid. Thus, the suit was filed in Com.O.S. No.5871/2016 5 for recovery of amount Rs.1,33,27,421/- including the interest @18% p.a. from the defendant.
5. The defendant contested the suit and denied the liability to pay the price of software component, maintenance and service charges specified in Ex.P3- purchase order. On perusal of the written statement filed by the defendant particularly paragraphs-P, Q, R and S, it is noticed that the defendant has taken a stand that though the hardware components, in terms of the purchase order, were delivered to it, there was delay in supplying the software component. The defendant would further contend that the end user (the customer of the defendant) was not happy with the software supplied by the plaintiff. On account of this, the defendant states that it had to incur losses and payment to the defendant by its customer was delayed. On this premise, the defendant pleads that it is not liable to pay price towards Software licenses, Maintenance and service. However, it is to be 6 noted that the liability to pay price of the hardware is admitted.
6. The defendant further contends that the Commercial Court in Bengaluru has no territorial jurisdiction to entertain the suit on the premise that the cause of action has arisen in Delhi and the Courts in Delhi alone have the jurisdiction to entertain the suit.
7. The defendant also contends that one M/s. Check Point Software Technologies Limited is the manufacturer of Firewall and other IT security services and the purchase order was placed at the behest of M/s. Check Point Software Technologies Limited and the said company is a necessary party to the proceeding.
8. Based on the pleadings, the Commercial Court framed the following issues:
"1. Whether the plaintiff proves that he is entitled to recover a sum of Rs.1,12,89,706/- from defendant?7
2. Whether the plaintiff proves that the defendant issued cheque bearing No.4817904 dated 08.10.2015 for Rs.1,11,17,024/- in his favour towards discharge of said liability?
3. Whether the suit is bad for non- joinder of necessary parties?
4. Whether the suit is bad for mis- joinder of causes?
5. Whether the defendant proves that this Court has no territorial jurisdiction to try the suit?
6. Whether the plaintiff is entitle for the relief claimed in the above suit?
7. What order or decree?"
9. The Commercial Court after hearing the parties has decreed the suit in part with cost entitling the plaintiff to recover a sum of Rs.1,12,89,706/- along with interest 8 @ 9% per annum from the date of suit till realization from the defendant.
10. Assailing the judgment and decree passed by the Commercial Court, the defendant is in appeal.
11. Heard the learned counsel appearing for the parties.
12. After hearing learned counsel for the parties, this Court is of the opinion that the following points emerge for consideration:
(i) Whether the defendant/appellant is able to establish that the materials were not supplied to it in terms of the purchase orders placed by it?
OR In the alternative defendant/appellant is not liable to honour the suit claim on account of delayed supply of products specified in the purchase order?
(ii) Whether the Commercial Court in Bengaluru has the territorial jurisdiction to entertain the suit? 9
(iii) If so, what order?
13. We have perused the materials available on record and the reasons assigned in the impugned judgment. We have also considered the submissions made at the Bar.
14. During the course of hearing, the learned counsel for the defendant contended that the software component and service component in terms of Ex.P3 were not delivered. However, the paragraph Nos. P, Q, R and S of the written statement filed by the defendant would clearly reveal that the stand of the defendant is not of short supply of the materials covered under the purchase order at Ex.P3. The contention is that the supply was delayed. Thus, the contention relating to alleged short supply cannot be entertained.
15. On the basis of contention of delayed supply the defendant contends that payment due to it from its 10 customer was delayed and consequently the defendant suffered losses. Thus, the defendant contended that it is not liable to make good the claim made by the plaintiff.
16. DW1, in his cross examination admitted issuance of purchase order Ex.P3. It is also forthcoming from the evidence on record that Ex.P8- a cheque bearing No.481704 dated 08.10.2015 for Rs.1,11,17,024/- is issued by the defendant towards the value of the materials specified in the purchase order. DW1 in his cross- examination found at page No.11 has deposed as under:
" It is true that defendant placed purchased (sic) orders to the plaintiff as per Exs.P3 and P4."
In page No.12, DW1 has stated as under:
"It is true that total value of the products of (sic) Exs.P3, 4 and 15 is approximately 98 lakhs to 99 lakhs excluding taxes"
In Page No.13 in relation to Ex.P8 the cheque issued by the defendant, DW1 has stated as under: 11
"witness volunteers, post dated cheque at Ex.P8 was issued on 08.10.2015. Witness volunteers, said cheque was issued as security cheque. Cheque at Ex.P8 was issued by me and bears my signature as well as signature of another Director of the defendant Company. Writings of the said cheque at Ex.P8 are in the handwriting of my accountant (details of the cheque at Ex.P8 were written by my accountant). It is true that date 08.10.2015 is entered in date column at Ex.P8. It is true that the cheque at Ex.P8 was written and issued pursuant to purchase order as per Exs.P3 and P4. Witness volunteers is (sic) subject to complete delivery of products mentioned in the purchase order.
(Emphasis supplied)
17. From the above extracted statement of DW1, it is apparent that the cheque was issued by the defendant company towards purchase of materials from the plaintiff. Now, the question that needs to be answered is "whether all the materials were supplied to the defendant or not?"
The answer to this question is found in Ex.P9(a) i.e., the email sent by the defendant wherein the defendant has 12 admitted that the issue relating to the software is resolved.
This communication is not in dispute. The communication Ex.P9(a) reads as under:
From Sunil Gupta to Lawrence David.
"The license issue has been resolved after 15th September only and customer accepted the delivery accordingly. Even Amit has come to our office for the same during that time.
We are working hard to close this in coming few days so once again request you to hold the cheque for few more days."
Email From Lawrence David to Surjeet Singh Sachdeva "Please find the attached mail confirmation for your clarification regarding the license. Please do not ask us to hold at the end moment as we are under pressure from our Finance. We will be presenting the cheque as per schedule date."
Email from Surjeet Singh Sachdeva to Lawrence David "Dear Sir, Please do not present the CHQ 4817904 dated 8.10.15 drawn on Yes Bank for 13 Rs.1,11,17,024.00 due to delay in delivery complete Licenses."
18. From the above said communications, there is no difficulty to hold that hardware and software were delivered in time. The defendant had requested the plaintiff to hold the cheque for few more days. In the next email, the defendant has requested not to present the cheque on the premise there is delay in delivery of complete licenses. It is also relevant to note that the contract for supply of materials between the plaintiff and the defendant is at Ex.P3. This document does not stipulate any time limit for the plaintiff to supply the goods. Even if the contract stipulates any time limit, there is no clause enabling the defendant to cancel the contract or withhold the payment on the ground that the plaintiff has not adhered to the time deadline. Even the defendant while receiving the delivery of the product has not raised objection for alleged delayed supply. The defendant has only requested to put the cheque on hold, which the 14 defendant had issued towards discharge of its liability. Thus, the plaintiff has established supply of the products to be within time. The defendant has failed to establish short/delayed supply of materials. Thus, the defendant cannot evade the liability.
19. Following factors though cannot be construed as admission of liability on the part of the defendant, will come in the way of accepting the contention of the defendant to allow the appeal given the fact that the defendant has clearly admitted the delivery of all the components:
(a) The defendant has not disowned the liability to make payment whenever the plaintiff requested to make payment through emails marked at Ex.P9.
(b) The defendant has not replied to the notice at Ex.P10 sent by the plaintiff through its lawyer.
(c) The defendant has not filed a counter claim or a suit against the plaintiff claiming damages in respect of alleged delayed / short supply of materials 15 though in the written statement has taken a stand that it would reserve the liberty to claim damages.
20. The Commercial Court has taken note of all the relevant materials on record and has come to the conclusion that the plaintiff has made out a case to claim a sum of Rs.1,12,89,706/-. The interest component prior to the filing of the suit amounting to Rs.20,37,715/- is declined by the Commercial Court.
21. Though the defendant has taken a stand that the cheque is issued as a security towards the transaction between the plaintiff and the defendant, since the plaintiff is able to establish supply of materials specified in the purchase order and the defendant having failed to establish alleged short supply/delayed supply, assuming that the cheque was issued towards security, then also the said cheque would attract presumption under Section 118 of the Negotiable Instruments Act, 1881 and the defendant has failed to rebut the presumption under Section 118 of 16 the Negotiable Instruments Act, 1881. Accordingly, point No.1 is answered in the negative.
22. The contention relating to the territorial jurisdiction of the Commercial Court in Bengaluru is also considered by the Commercial Judge and based on the admission of DW1, the Court has come to the conclusion that the cause of action has also arisen in Bengaluru. Moreover, the contention relating to the territorial jurisdiction is not a contention which goes into the root of the matter. The defendant had appeared and participated in the trial and led evidence. No prejudice is caused to the defendant by the act of the Commercial Court in entertaining and deciding the suit. Thus, this contention of the appellant again has no merit. Therefore, Point No.2 is answered in the negative.
23. For the aforesaid reasons, this Court finds no merit in the appeal. Hence, the following: 17
ORDER The appeal is dismissed with cost.
Impugned judgment and decree dated 10.12.2020 passed by the LXXXIII Additional City Civil and Sessions Judge, Bengaluru City, in COM.O.S.No.5871/201 is confirmed.
Sd/-
JUDGE Sd/-
JUDGE TL/brn