Delhi District Court
M/S Impex Services India Private ... vs M/S Dba Enterprises Llp on 1 March, 2024
IN THE COURT OF Ms. NIRJA BHATIA
DISTRICT JUDGE (COMM-07), DIGITAL
SOUTH-EAST DISTRICT, SAKET COURT, NEW DELHI
CS(COMM) 331/22
M/S Impex Services India Pvt. Ltd.
503, 5th Floor, Gedore House,
Building No. 51-52
Nehru Place,
New Delhi 110019
.........Plaintiff.
Versus
M/S DBA Enterprices LLP,
Having its registered office at:
K-336, Pocket-K, Sarita Vihar,
New Delhi 110076,
Through its managing partner
..... Defendant
Date of Institution: 31.05.2022
Date of arguments: 20.02.2024
Date of Judgment: 01.03.2024
(1) By this judgment, I shall decide the present suit filed
by M/S Impex Services Pvt. Ltd. ( hereinafter called the
plaintiff ), a company incorporated under Companies Act, 1956.
Plaint is instituted by Sh. Manikandan M.P, the Authorised
Representative. The suit is filed against DBA Enterprises, an LLP
( Limited Liability Partnership), having its registered office at
Sarita Vihar through its managing partner.
Page 1 of 16
M/S Impex Services India Pvt. Ltd. Vs. M/S DBA Enterprises LLP
Case of the plaintiff.
(2) Plaintiff states that it is engaged in the business of
International & Multimodal Logistics activities, Project and Over
Demension Cargo Logistics, Warehousing & Distribution
including freight forwarding services. The defendant firm which
is engaged in the services of exports, approached the plaintiff for
forwarding their consignments to places / countries as adviced by
the defendant firm, plaintiff mentioned its charges in advance for
such consignments / services which were agreed whereafter the
defendant availed the services of plaintiff.
(3) Plaintiff states that it was rendering services to
defendant for about 2 years when from November 2016, the
defendant became irregular in clearing the dues. The plaintiff has
been raising its invoices after executing their part of the work but
defendant failed and neglected to clear the dues legitimately
claimed.
(4) Plaintiff states that that defendant did not assign any
discrepancy in the services rendered with regard to invoices
within 7 days which was the term mentioned upon the invoices
raised by the plaintiff.
(5) Plaintiff states that services are duly discharged and
the invoices as well as the amounts mentioned therein stands
accepted by the defendant since no grievance of of any nature has
ever been raised. Plaintiff states that amounts in the present suit
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M/S Impex Services India Pvt. Ltd. Vs. M/S DBA Enterprises LLP
are restricted to uncleared invoices along with interest on delayed
payment which is claimed after giving a credit of 60 days @
24%.
(6 ) Plaintiff states that it has been receiving assurances
and had even received an email on 19.04.2017 wherein the
defendant admitted the amounts due @ Rs. 14,15,923.65 by
sending their ledger account which clearly indicates that
defendant admitted the principal amount of dues, however,
despite the above the due are not cleared forcing the plaintiff to
issue a legal notice dated 04.09.2017 demanding payment under
Insolvency and Bankcrupcy Code of 2016. Consequent to the
report of delivery obtained upon the above notices from the
Website of Indian Post, application was filed before NCLT for
initiating Insolvency Resolution process against the defendant
firm against which defendant raised a false and frivolous claim,
claiming dispute between defendant and M/S SSMP Industries
Ltd. to which also plaintiff has rendered services being the sister
concern of the defendant. Plaintiff states that prior thereto the
defendant initiated notice dated 01.09.2017 inviting plaintiff to
solve the dispute u/s 62 of Arbitration Act 1996 to conciliation
and since there was no prior agreement none of the notices issued
or emails exchanged between the parties prior to 06.09.2017 even
remotely mentioned anything about notice u/s 62 of Arbitration
Conciliation Act.
(7) Plaintiff states that taking refuse under the claim of
a false prior dispute, the adjudicating authority ( NCLT ) could
Page 3 of 16
M/S Impex Services India Pvt. Ltd. Vs. M/S DBA Enterprises LLP
not adjudicate the issues raised by the plaintiff ( Operational
Creditor ) and the petition was dismissed by NCLT. Appeal was
also dismissed before NCLT as well as by Hon'ble Supreme
Court.
(8) Plaintiff claims that they also had an arrangement
with SSMP Industries Ltd. For freight forwarding services which
also recorded in clearing the legitimate dues of the plaintiff.
Plaintiff had filed a petition before NCLT as well as against
SSMP Industries Ltd. Which petition was allowed by NCLT in
which background, the dispute raised by the present defendant on
account of having a previous dispute with SSMP Industries was
purely baseless.
(9) Plaintiff states that a residue of amount of Rs.
14,15,714.45/- have become due and payable on 02.01.2012
against which an amount of Rs. 15,85,873.80 is claimed as
interest.
(10) While stating the cause of action, it is averred that
the defendant availed the services from the plaintiff in the year
2016. The invoices were raised on the defendant during
09.02.2017to 03.05.2017. The cause of action further accrued to defendant vide email dated 19.04.2017 admitted the amounts due in which background the relief is claimed.
(11) Suit is filed along with an application U/O 38 Rule 5 CPC. The process was directed to the defendant of suit as well Page 4 of 16 M/S Impex Services India Pvt. Ltd. Vs. M/S DBA Enterprises LLP as notice of the application. The appearance of defendant was received on 18.08.2022, whereafter, the defendant moved an application for rejection of plaint on the ground of non- compliance of the provisions of Section 12 A, Commercial Courts Act.
(12) Vide order of 11.11.2022, application of defendant on the ground of non-compliance u/s 12 A of Commercial Courts Act as well as agitating the ground of limitation was dismissed and the right of defendant to file Written Statement was also closed simultaneously. The application of plaintiff U/O 38 Rule 3 was allowed.
(13) The defendant against the said order initiated a review u/s 114 CPC r/w Section 5 Limitation Act. He also attempted to file Written Statement, however, the application met with rejection. Whereafter the application of defendant for rejection / dismissal of suit u/s 151 CPC was heard and the application u/s 114 and u/s 5 Limitation Act, the applications were then disposed off vide order dated 13.01.2023 and were rejected. In compliance of the orders dated 11.11.2022, the defendant furnished the security by way of an FDR for an amount of Rs. 14,15,714/-. Vide order dated 01.02.2024 application U/O 18 Rule 17 for recall of plaintiff's witness was allowed as in the meanwhile, the examination in chief was tendered. PW-1 Sh. Manikandan was examined and cross- examined, whereafter PE was closed. Both the counsels have Page 5 of 16 M/S Impex Services India Pvt. Ltd. Vs. M/S DBA Enterprises LLP filed their Written Submissions and have made oral address. In view of the aforesaid submissions the findings are as below:-
The assessment of evidence and reasons for rendering the decisions (14) The claim of the plaintiff in the present suit is arising out of a commercial transaction under the provisions of Section 2 C of Commercial Courts Act which fact is not disputed as the plaintiff and defendant both are engaged in separate businesses. It is not disputed that the plaintiff is engaged in the business of International and Multimodel Logistics Activities, project and dimension cargo logistics, warehousing and distribution including freight forwarding services. It is not disputed that the defendant firm is also engaged in the services of exports. The claim of plaintiff ensues on account of assertions that it rendered the services for the defendant for approximately 2 years commencing from the year 2014. It was observed by plaintiff that from November 2016, the defendant became irregular in clearing the dues. The invoices were raised from time after the execution of work, however, the defendant did not make the payments in time and neglected the legitimate dues falling in favour of the plaintiff. As no discrepancy in service was also pointed out in terms of the agreement ( plaintiff states that invoices are unopposed ). Plaintiff became entitled to interest @ 24%. In support, the plaintiff has relied upon the ledger mentioning the details of the invoices pending against the defendant and has also stated that the e-mail exchanges were made, whereafter also the payments have not been realized. In Page 6 of 16 M/S Impex Services India Pvt. Ltd. Vs. M/S DBA Enterprises LLP support PW-1 Sh. Manikanandan tendered the documents i.e. computation of the amounts due to the plaintiff along with the unpaid invoices ( office copies ) as Ex.PW1/2 (colly) ( running into 9 pages ). The printout of emails from 19.04.2017 which were collectively exhibited as Ex.PW1/3 Colly. Along with which the certificate u/s 65 B was filed and is exhibited as Ex.PW1/B. He was cross-examined on behalf of defendant by Ld. Counsel Sh. Lokender in which he stated that the transactions between the parties started from the year 2014 and corroborated that while providing the services of freight forwarding and custom clearance to defendant, the invoices were raised and given to defendant with documents. There has been no cross-
examination thereupon. Moreover, the defendant was allowed only a limited opportunity of cross-examination as the opportunity to file Written Statement stood closed.
(15) PW-1 further corroborated that the mode of receiving payment was in running account and the defaults in payments occurred on account gradual non-payments due to which the outstanding started building up. The invoices were confirmed as they were delivered to the defendant with the documents. Though no separate acknowledgment was taken, the defendant confirmed the balance as well as the invoices and vide email of 19.04.2017, defendant had given the ledger copy as well as confirmation of the outstanding with assurance that they were arranging the payments. The suggestion that the invoices were fabricated was denied. The witness was cross-examined further on document Ex.PW1/2 i.e. invoices regarding their Page 7 of 16 M/S Impex Services India Pvt. Ltd. Vs. M/S DBA Enterprises LLP acknowledgement which was denied by the witness who stated that the acknowledgement was delivered. Further question as below was asked:-
(Q) Is it correct that your company had not uploaded the relevant documents correctly on the site of DGFT, due to which the defendant could not get the benefit or refund of the duty draw back and Vishwas Krishi Upaj Yojna ?
(Q) Is it correct that vide email dated 29.08.2017 sent by the defendant to the plaintiff, the defendant had specifically mentioned about the details of pending duty drawback and VKUY benefits due to discrepancy in services for uploading of the shipping bill on DGFT website?
(16) Intriguingly the question above impede into the defense adversely as by these questions, the statements made by the plaintiff is corroborated to the extent that the parties had engaged in business transactions, that the transactions materialize as per the commands made by the defendant, that there was no discrepancy as such pointed in the service rendered that, the plaintiff also communicated the requisite invoices as well as the parties attempted to concile the outstanding but that the issues came from the failure of defendant to get the duty drawback against the bills and invoices raised for which the payments are avoided. The said is corroborated from the next question where in Ld. Counsel for the defendant specifically asked the witness that the conciliation of ledger was not towards reconciliation but for other purposes which was denied by the witness who stated that the defendant had sent a letter of reconciliation on 01.09.2017 and that the documents / communications by the Page 8 of 16 M/S Impex Services India Pvt. Ltd. Vs. M/S DBA Enterprises LLP plaintiff were duly filed. The witness was challenged to have relied on selective piece of evidence which in fact indicated towards the correctness of rest of the communications exchanged between the parties since the fact that the conciliation was not intended in the manner and for object claimed by plaintiff at first indicated that the communication indeed was moved from the end of defendant at second limb, the onus shifted upon the defendant to prove that the documents only presented half truth contrary to above, no evidence was led as apparently the opportunity to lead defense was closed.
(17) From the above cross-examination, it became clear that the invoices Ex.PW1/2 for amount of Rs. 14,15714.45/- were outstanding and unpaid.
(18) At this stage, it is also observed that the suggestion to insert the defense regarding the duty drawback etc, though agitated did not connect, with the entitlement of plaintiff to claim, as it failed to show or raise any cause qua deficiency, discrepancy or default of service dis-entitling the plaintiff to claim the charges against services rendered.
(19) It is noted that detailed written submissions are raised. However, through the Written Submissions the lacunae left in merits cannot be filed. Moreover from the submissions raised from arguments without pleadings and evidence no such assessment in favour of defendant is possible that ledger sent by the defendant in email dated 19.04.2017 Ex.PW1/3 is not the Page 9 of 16 M/S Impex Services India Pvt. Ltd. Vs. M/S DBA Enterprises LLP same which was inter-exchanged by both parties and or that there are two different emails specifying the attachment of ledger and / or that the record only shows one ledger having been filed selectively. The defendant has not been able to counter that none of the invoices or bills, in essence as a result of acknowledgement of ledger vide email dated 19.04.2017 are to be treated as unacknowledged bills or do not reveal the knowledge of bills or invoices to defendant. The mere statement that onus to prove the claim remained on the plaintiff would not absolve the defendant of its own liability. As the burden stood discharged by the plaintiff after filing the invoices the ledger in support and the corroboration of the above by email communication which led to shifting the onus upon the defendant to prove otherwise as is mandated by Section 100 to 103 Evidence Act and is analysed by Hon'ble Supreme Court in Anil Rishi vs Gurbaksh Singh, Appeal (civil) 2413 of 2006, DOD 02.05. 2006. The material portion is extracted and is reproduced below:-
8. The initial burden of proof would be on the plaintiff in view of Section 101 of the Evidence Act, which reads as under:
"101. Burden of proof. Whoever desires any court to give judgment as to any legal right or liability dependent on the existence of facts which he asserts, must prove that those facts exist.
When a person is bound to prove the existence of any fact, it is said that the burden of proof lies on that person."
10..........................................
Page 10 of 16M/S Impex Services India Pvt. Ltd. Vs. M/S DBA Enterprises LLP The suit will fail if both the parties do not adduce any evidence, in view of Section 102 of the Evidence Act. Thus, ordinarily, the burden of proof would be on the party who asserts the affirmative of the issue and it rests, after evidence is gone a into, upon the party against whom, at the time the question arises, judgment would be given, if no further evidence were to be adduced by either side.
(20) Further at the stage of arguments, Ld. Counsel for plaintiff was asked to tender the clarifications regarding the limitation as the transactions between the parties were stated to be of the period of 2016. However, the perusal of the record clearly reveals that the invoices / ledger is pertaining to the year 2017. The parties were engaged in exchange of communication and the defendant vide Ex.PW1/3 email dated 19.04.2017, have participated in reconciliation. In view thereof the limitation is to be read accordingly.
(21) The record reveals that issue pertaining to the limitation was raised by the defendant and was met by the discussion vide order dated 11.11.2022 as below:-
2.6 Now, I shall consider the ground of limitation taken by the defendant.
stated that according document at 2 the index filed by the plaintiff, the cause of action arose on 09.01.2017.
The limitation for filing the suit expired on 09.01.2020. Ld. Counsel for the parties relied upon order dt.
10.01.2022 passed by Hon'ble Page 11 of 16 M/S Impex Services India Pvt. Ltd. Vs. M/S DBA Enterprises LLP Supreme Court in Suo Motu Writ Petition (c) No. 3 of 2020.
2.7 Limitation is a mixed question of law and fact. Plaintiff has pleaded that the defendant acknowledged the liability on 19.04.2017. This fact cannot be judged without evidence. If the contention of the plaintiff is correct, fresh period of limitation starts from 19.02.2017 under Section 18 of the Limitation Act, 1963. The limitation would have expired on 19.04.2020. As per para 5 (iii) of the Order dt. 10.01.2022 passed by Hon'ble Supreme Court, the plaintiff had 90 days time to file the suit with effect from 01.03.2022. The suit was filed from 02.04.2022. Therefore, the is prima facie within limitation and the plaint is not to be rejected under Order VII Rule 11 (d) CPC on the point of limitation.
(22) Ld. Counsel for plaintiff submits the copy of order dated 21.02.2024 of Hon'ble High Court stating that the issue of limitation rests in favour of plaintiff thus, the challenge to the said order has been withdrawn by the defendant. However, vide order of Ld. Predecessor dated 11.11.2022, decision on the issue of limitation has merely been postponed and not determined as the challenge to above is withdrawn, the position has reverted back as to order of 11.11.2022. Thus, the plaintiff is put to burden to discharge on issue of limitation, reading the law in light of facts attracted to this case.
(23) Plaintiff has brought on record the material showing the parties engaged in communication with each other uptill later Page 12 of 16 M/S Impex Services India Pvt. Ltd. Vs. M/S DBA Enterprises LLP part of September 2017. The receipt of legal notice met with the reply from the defendant asking for participation in arbitration shows that parties were engaged and the mail dated 19.04.2017 in any case would reveal the extension uptill April 2020 which stood further extended vide the law laid down by Hon'ble Supreme Court in Suo Moto, Writ Petition no. 3 of 2020 and in view thereof the suit is within time. The aspect of limitation hence stands in favor of the plaintiff.
(24) Aforementioned, hence prima facie show that plaintiff is entitled to the relief of principal amount of Rs. 14,15,714.45/-. This bring in the discussion pertaining to the grant of interest which is claimed @ 24%. Ld. Sh. K.V. Balkrishanan, Advocate for plaintiff stated that for the reasons of provisions made u/s 34 of CPC, the court is empowered to grant interest of above rate. He relied upon the law laid in M/S Banglore Water Supply and Sewage Board Vs. M/S Sugesan, AIR 1999 Mad 49. However, while the plea that court can impart interest beyond 6% in commercial transaction is made in the provisions of Section 34 CPC, the assessment that the rate asked by a party is to be construed as if default interest is not provided from the bare reading, which interpretation Ld. Counsel is suggesting, that this court shall take. It is a settled law that while invoice is a contract between the parties, the breach of its term must be pleaded specifically and proved. Hence, the rigours of provisions of Section 73 and 74 of Indian Contract Act cannot be skipped specially when the asked interest is of the nature of liquidated damages and tantamounts to penalty. A harmonious Page 13 of 16 M/S Impex Services India Pvt. Ltd. Vs. M/S DBA Enterprises LLP reading hence is to be adopted in reading Section 34 which is an enabling provision to assess the right of party claiming, has satisfied the causes showing its entitlement to attract the enabling provision.
(25) Coming to the aforesaid view I am supported with the law laid down in Fateh Chand Vs. Balkishan Dass, AIR 1963, SC 1405 and M/S MC Aggarwal HUF Vs. M/S Sahara India and Ors ( 2011) 183 DLT 105 wherein the Hon'ble Supreme Court has held that " Where on account of breach of contract, damages can be proved, then, there cannot be any validity of a clause which gives liquidity damages". (26) While seeking an interest @ 24% which is much higher then the interest accepted in the domain of transactions of Commercial Nature and general bank interest, which otherwise is the permissible provision u/s 34 of Civil Procedure Code making way for exercising discretion or grant of interest beyond 6% in commercial transactions, still falls in the terrain which is not touched by any material to show its imparting being just and proper. At this stage, it is necessary to reproduce the provisions of Section 73 and Section 74 of Indian Contract Act:-
73.Compensation for loss or damage caused by breach of contract.--When a contract has been broken, the party who suffers by such breach is entitled to receive, from the party who has broken the contract, compensation for any loss or damage caused to him thereby, which naturally arose in the usual course of things from such breach, or which the parties knew, when they made the contract, to be likely to result from the breach of it.Page 14 of 16
M/S Impex Services India Pvt. Ltd. Vs. M/S DBA Enterprises LLP Such compensation is not to be given for any remote and indirect loss or damage sustained by reason of the breach. Compensation for failure to discharge obligation resembling those created by contract.--When an obligation resembling those created by contract has been incurred and has not been discharged, any person injured by the failure to discharge it is entitled to receive the same compensation from the party in default, as if such person had contracted to discharge it and had broken his contract.
74. Compensation for breach of contract where penalty stipulated for.
--1[When a contract has been broken, if a sum is named in the contract as the amount to be paid in case of such breach, or if the contract contains any other stipulation byway of penalty, the party complaining of the breach is entitled, whether or not actual damage or loss is proved to have been caused thereby, to receive from the party who has broken the contract reasonable compensation not exceeding the amount so named or, as the case may be, the penalty stipulated for.
(27) The bare perusal of the aforementioned provisions put a duty on the plaintiff to show it having suffered an actual damage or loss. Merely for the reason that the payment is delayed beyond 7 days ( or 60 days as in present case) would not be sufficient to call in the breach quality as damages attracting asked interest. The plaintiff hence is under duty to specifically plead the damages it has suffered actually and prove the same by Page 15 of 16 M/S Impex Services India Pvt. Ltd. Vs. M/S DBA Enterprises LLP evidence, in the event of failure of which grant of interest beyond 6% or at prevailing rate attracted to commercial transaction is sufficiently mitigated. For want of any evidence of such nature that plaintiff has suffered any actual damage or loss which must be categorized as non-notional, I am constraint to restrict the award of interest to 10% P.A. from the date of due i.e. 19.04.2017 till realization.
(28) Plaintiff is held entitled for the court fees of Rs. 31,700/- as well as litigation charges of Rs. 10,000/-.
Decree sheet be drawn.
(29) File be consigned to Record Room after completion of necessary formalities.
(Nirja Bhatia) District Judge (Comm.) Digital-07 South East, Saket Courts Delhi 01.03.2024 Page 16 of 16 M/S Impex Services India Pvt. Ltd. Vs. M/S DBA Enterprises LLP