Delhi District Court
M/S. Loyal Scaffolding Pvt. Ltd vs M/S. Mihir Buildcon Pvt. Ltd on 23 September, 2021
IN THE COURT OF ADJ07, SOUTHEAST DISTRICT, SAKET
COURTS, DELHI
Presided By : Sh. Jay Thareja, DHJS
Civil Suit No:209737/2016
M/s. Loyal Scaffolding Pvt. Ltd.
Having office at B111,
Mayapuri Industrial Area, PhaseI,
New Delhi110064,
Through its Authorized Representative
Mr. Amarjeet Singh
... Plaintiff
Versus
1. M/s. Mihir Buildcon Pvt. Ltd.
Through its Director/AR/MD/Authorized Signatory
Office at A233, Shivalik, New Delhi110017
2. Mr. Ashok Sharma
AR/Authorized Signatory of
M/s. Mihir Buildcon Pvt. Ltd.,
Office at A233, Shivalik,
New Delhi110017
Also at: H. No. B27, Sarvodaya Enclave
New Delhi110017.
3. Mrs. Pooja Sharma
Director/Authorized Signatory of
M/s. Mihir Buildcon Pvt. Ltd.,
Office at A233, Shivalik,
New Delhi110017
Also at: H. No. 282, Masjid Moth
New Delhi.
... Defendants
Civil Suit No.209737/2016
M/s. Loyal Scaffolding P. Ltd. v M/s. Mihir Buildcon P. Ltd. & Ors.
Page No.1 of 12
SUIT FOR RECOVERY OF RS.95,25,636/ AND
ALONGWITH COSTS AND INTEREST AT THE
RATE OF 24% PER ANNUM.
DATE OF INSTITUTION : 26.11.2014
DATE OF CONCLUSION FINAL ARGUMENTS : 10.09.2021
DATE OF DECISION : 23.09.2021
JUDGMENT
1. The plaintiff has filed this suit against the defendant no.1 company and the defendants no.2 and 3, authorized representatives/directors of the defendant no.1 company, seeking recovery of (a) Rs.95,25,636/, (b) pendentelite and future interest at the rate of 24% per annum1 and (c) costs of this suit.
2. In order to justify the recovery of the aforesaid money from the defendants, the plaintiff has interalia pleaded in the plaint of this suit that the plaintiff is a private limited company; that the plaintiff has instituted this suit through Sh. Amarjeet Singh, who is duly authorized to institute this suit on behalf of the plaintiff; that the plaintiff deals in the business of manufacturing and giving on hire shuttering and scaffoldings to various companies; that the defendant no.1 is a real estate company which had availed the services of the plaintiff by taking on hire shuttering and scaffoldings; that in this regard, a contract was executed between the plaintiff and the defendant no.1 company, acting through the defendants no.2 and 3; that in pursuance of the said contract, the plaintiff had supplied shuttering and scaffoldings to the defendant no.1 company 1 The claim of prelitigation interest at the rate of 24% per annum was abandoned by the Ld. Advocate for the plaintiff, on 10.09.2021.
Civil Suit No.209737/2016M/s. Loyal Scaffolding P. Ltd. v M/s. Mihir Buildcon P. Ltd. & Ors.
Page No.2 of 12and regularly raised challans and bills qua the hire charges; that the defendant no.1 company had defaulted in regularly paying the challans and bills raised by the plaintiff; that in March, 2011, the plaintiff and the defendant no.1 company had reconciled their account and at that time, the defendant no.1 company had admitted its liability to pay a sum of Rs.37,00,000/ to the plaintiff, in respect of 8669 pieces of shuttering and scaffoldings taken on hire; that as a consequence of the repeated defaults made by the defendant no.1 company in regularly paying the dues of the plaintiff, by May 2014, a sum of Rs.49,50,146/ was showing as an outstanding balance towards hire charges, against the defendant no.1 company, in the books of account of the plaintiff; that in discharge of the said liability, the defendant no.1 company had issued certain cheques to the plaintiff but they were dishonoured on presentation; that the plaintiff had supplied a total of 18,039 pieces of scaffoldings to the defendant no.1 company but only 12,276 were returned back, leaving a deficit of 5763 pieces; that in respect of the said 5763 pieces, the defendant no.1 company is liable to pay a sum of Rs.45,72,490/ to the plaintiff; that apart from the defendant no.1 company, the defendants no.2 and 3 are also liable to pay the dues of the plaintiff because they are managing the day to day affairs of the defendant no.1 company and because the defendant no.2 had personally signed the contract executed between the plaintiff and the defendant no.1 company; that in order to recover the total sum of Rs.95,25,636/, the plaintiff had served a legal notice dated 10.06.2014 upon the defendants but despite the service of the said legal notice, no money was paid by the defendants to the plaintiff and that therefore, the plaintiff is entitled to recover from the defendants, Rs.95,25,636/ alongwith interest at the rate of 24% per Civil Suit No.209737/2016 M/s. Loyal Scaffolding P. Ltd. v M/s. Mihir Buildcon P. Ltd. & Ors.
Page No.3 of 12annum.
3. Upon service of summons for settlement of issues of this suit, only the defendant no.1 company has contested this suit by filing its written statement. In the written statement of the defendant no.1 company, it is interalia pleaded that the defendant no.1 company has filed its written statement, through Sh. Manoj Kumar, who is duly authorized to file the written statement on behalf of the defendant no.1 company vide board resolution dated 01.04.2015; that the pleadings made in the plaint of this suit are not in accordance with the provisions of Order VI of CPC, 1908; that the defendants no.2 and 3 are not necessary parties to the suit because they have no personal liability to pay the alleged dues of the plaintiff; that the bills and challans, relied upon by the plaintiff are fictitious, false and fabricated because not all the shuttering and scaffoldings noted therein were supplied to the defendant no.1 company, because the plaintiff used to delay taking back of unwanted shuttering and scaffoldings and because the defendant no.1 company had never agreed to pay any hire charges qua damaged shuttering and scaffoldings; that the defendant no.1 company had pointed out the discrepancies in the bills and challans of the plaintiff; that thereafter, the plaintiff had taken back all its shuttering and scaffoldings and not even made an attempt to reconcile the accounts with the defendant no.1 company; that the defendant no.1 company does not have any piece of shuttering and scaffoldings of the plaintiff; that the defendant no.1 company has already paid all the genuine bills and challans of the plaintiff and that therefore, this suit should be dismissed.
Civil Suit No.209737/2016M/s. Loyal Scaffolding P. Ltd. v M/s. Mihir Buildcon P. Ltd. & Ors.
Page No.4 of 124. In the replication qua the written statement of the defendant no.1 company, the plaintiff has traversed the contents of the said written statement, made the necessary denials and reaffirmed the contents of the plaint.
5. On the basis of the aforesaid pleadings of the parties, the following issues were framed by a Ld. Predecessor Judge, on 27.08.2016: "1. Whether the plaintiff is entitled to recover an amount of Rs.49,50,146/ or any other amount along with interest, pendentelite and future @ 24% per annum or at any other rate from the defendant towards hiring charges w.e.f. February 2012 till May 2014? OPP
2. Whether the plaintiff is entitled to recover an amount of Rs.45,75,490/ or any other amount along with interest, pendentelite and future @ 24% per annum or at any other rate from the defendant towards cost of material retained by the defendant? OPP
3. Whether the suit for recovery as instituted is not maintainable? OPD
4. Whether the suit is bad for misjoinder of parties? OPD
5. Whether the suit for recovery is filed without any cause of action against the defendant no. 2 and 3? OPD Civil Suit No.209737/2016 M/s. Loyal Scaffolding P. Ltd. v M/s. Mihir Buildcon P. Ltd. & Ors.
Page No.5 of 126. Whether the suit is filed without any cause of action? OPD
7. Relief."
6. During the trial of this suit, only one witness viz. PW1 Sh. Amarjeet Singh was examined in support of the case of the plaintiff and the defendants were proceeded exparte, w.e.f. 24.02.2020.
7. During examination in chief, PW1 Sh. Amarjeet Singh had deposed in line with the plaint of this suit and tendered in evidence board resolution dated 21.09.2013, Ex.PW1/1, copy of letters dated 31.03.2011, Ex.PW1/2 to Ex.PW1/2A(OSR), copy of letter dated 18.12.2009, Ex.PW1/2B(OSR), copy of legal notice dated 10.06.2014, Ex.PW1/3(OSR), copy of TDS certificates, Ex.PW1/4 to Ex.PW1/6(OSR), contract dated 01.04.2009, Ex.PW1/7(OSR) 1, computer generated computation of hire charges, Ex.PW1/7A(colly), document reflecting material status, Ex.PW1/7B, account statement for the year 20112012, Ex.PW1/7C(colly), account statement for the year 20122013, Ex.PW1/7D(colly), account statement for the year 2013 2014, Ex.PW1/7E(colly), account statement for the year 20142015, Ex.PW1/7F, bills/invoices/challans, Ex.PW1/8 to Ex.PW1/275, gate passes dated 16.04.2014 and 28.04.2014, Ex.PW1/276 to Ex.PW1/277, pronotes of the defendants, Ex.PW1/278 to Ex.PW1/280(OSR), transport receipts, Ex.PW1/281 to Ex.PW1/292(OSR) and certificate under Section 65B of the Indian Evidence Act, 1872, Ex.PW1/293. During the limited crossexamination conducted by the Ld. Advocate for 1 The original was taken on record vide Order dated 19.02.2021.
Civil Suit No.209737/2016M/s. Loyal Scaffolding P. Ltd. v M/s. Mihir Buildcon P. Ltd. & Ors.
Page No.6 of 12the defendants, on 06.08.2020, PW1 Sh. Amarjeet Singh had interalia deposed that he used to deal with the defendants no.2 and 3; that he had met the defendant no.3 for the first time, in the year 2009, at the office of the defendants in Shivalik, New Delhi; that the rate and terms of the contract between the parties were finalized by the defendant no.3 but the contract between the plaintiff and the defendant no.1 company was signed by the defendant no.2; that the contents of paragraph 8 of his evidence affidavit are based on the contract dated 01.04.2009, Ex.PW1/7(OSR); that he does not remember why the work orders placed by the defendant no.1 company have not been filed in this Court; that a representative of the defendant no.1 company used to accompany the truck driver delivering the material supplied by the plaintiff, at the site of the defendant no.1 company; that the said representative of the defendant no.1 company used to sign the delivery challan; that the total of 5763 pieces of shuttering and scaffoldings, not returned by the defendant no.1 company have been calculated by checking delivery challans and stock ledgers; that the sum of Rs.45,72,490/ has been calculated as per the cost of missing material and in accordance with the contract dated 01.04.2009, Ex.PW1/7(OSR); that when the defendants had not made payments during 2012 to May 2014, the officials of the plaintiff had regularly stayed in touch with the defendants as a consequence of which, certain payments were made to the plaintiff and certain cheques were issued to the plaintiff, which were ultimately not presented on account of RTGS payment by the defendants and that it is wrong to say that his testimony qua all the questions put to him, is false.
8. In order to adjudicate upon this suit, I had heard Sh. O. P. Civil Suit No.209737/2016 M/s. Loyal Scaffolding P. Ltd. v M/s. Mihir Buildcon P. Ltd. & Ors.
Page No.7 of 12Pahuja and Sh. Suresh Bharti, Ld. Advocates for the plaintiff, on 10.09.2021. The issue wise findings, in this suit, are as follows:
ISSUE NO.1
9. In respect of this issue, the case of the plaintiff is that it is entitled to recover a sum of Rs.49,50,146/ from the defendants because the said amount was showing as an outstanding balance, payable by the defendants, towards hire charges of shuttering and scaffoldings materials, in the books of account of the plaintiff. Per contra, the case of the defendant no.1 company is that the plaintiff is not entitled to recover a sum of Rs.49,50,146/ from the defendants because the books of account of the plaintiff as well as the challans and bills of the plaintiff are fictitious, false and fabricated. Also, the case of the defendant no.1 company is that its directors, the defendants no.2 and 3 are not liable to pay any money to the plaintiff, because they do not have any privity of contract with the plaintiff.
10. In respect of this issue, the plaintiff has examined PW1 Sh.
Amarjeet Singh and tendered in evidence, through him, the board resolution dated 21.09.2013, Ex.PW1/1, copy of letters dated 31.03.2011, Ex.PW1/2 to Ex.PW1/2A(OSR), copy of letter dated 18.12.2009, Ex.PW1/2B(OSR), copy of legal notice dated 10.06.2014, Ex.PW1/3(OSR), copy of TDS certificates, Ex.PW1/4 to Ex.PW1/6(OSR), contract dated 01.04.2009, Ex.PW1/7(OSR), computer generated computation of hire charges, Ex.PW1/7A(colly), account statement for the year 20112012, Ex.PW1/7C(colly), account statement Civil Suit No.209737/2016 M/s. Loyal Scaffolding P. Ltd. v M/s. Mihir Buildcon P. Ltd. & Ors.
Page No.8 of 12for the year 20122013, Ex.PW1/7D(colly), account statement for the year 20132014, Ex.PW1/7E(colly), account statement for the year 2014 2015, Ex.PW1/7F, bills/invoices/challans, Ex.PW1/8 to Ex.PW1/275, gate passes dated 16.04.2014 and 28.04.2014, Ex.PW1/276 to Ex.PW1/277, pronotes of the defendants, Ex.PW1/278 to Ex.PW1/280(OSR), transport receipts, Ex.PW1/281 to Ex.PW1/292(OSR) and certificate under Section 65B of the Indian Evidence Act, 1872, Ex.PW1/293. During the limited crossexamination conducted by the Ld. Advocate for the defendants, on 06.08.2020, the testimony of PW1 Sh. Amarjeet Singh, supported by the said documents, has remained intact.
11. In order to prove its case qua this issue, the defendant no.1 company has not lead any evidence.
12. In view of the intact testimony of PW1 Sh. Amarjeet Singh, supported by the aforesaid documents; in view of the failure of the defendant no.1 company to lead any evidence to rebut the testimony of PW1 Sh. Amarjeet Singh and in view of the fact that the clause 13 of the contract dated 01.04.2009, Ex.PW1/7(OSR), renders the defendant no.2 liable to pay the dues of the plaintiff, this issue is decided in favour of the plaintiff and against the defendant no.1 company as well as the defendant no.2. It is held that the plaintiff is entitled to recover a sum of Rs.49,49,696/1 jointly and severally from the defendant no.1 company 1 A sum of Rs.450/ has been deducted from the claimed sum of Rs.49,50,146/ because in the account statement for the year 20112012, Ex.PW1/7C(colly), the plaintiff has wrongly shown that bill no.402 dated 30.11.2011, Ex.PW1/68(OSR) is of Rs.15,750/, when the said bill is only of Rs.15,300/.
Civil Suit No.209737/2016M/s. Loyal Scaffolding P. Ltd. v M/s. Mihir Buildcon P. Ltd. & Ors.
Page No.9 of 12and the defendant no.2.
ISSUE NO.2
13. In respect of this issue, the case of the plaintiff is that it is entitled to recover a sum of Rs.45,72,490/ from the defendants because that is the value of the 5763 pieces of shuttering and scaffoldings materials of the plaintiff, that were not returned back by the defendant no.1 company. Per contra, the case of the defendant no.1 company is that the plaintiff is not entitled to recover a sum of Rs.45,72,490/ from the defendants because the defendant no.1 company had returned all the shuttering and scaffoldings materials of the plaintiff. Also, the case of the defendant no.1 company is that its directors, the defendants no.2 and 3 are not liable to pay any money to the plaintiff, because they do not have any privity of contract with the plaintiff.
14. In sync with issue no.1, this issue is also decided in favour of the plaintiff and against the defendant no.1 company as well as the defendant no.2. It is held that in view of the intact testimony of PW1 Sh. Amarjeet Singh, supported by the aforesaid documents, particularly computer generated computation of hire charges, Ex.PW1/7A(colly), account statement for the year 20112012, Ex.PW1/7C(colly); in view of the failure of the defendant no.1 company to lead any evidence to rebut the testimony of PW1 Sh. Amarjeet Singh and in view of the fact, that the clause 13 of the contract dated 01.04.2009, Ex.PW1/7(OSR), renders the defendant no.2 liable to pay the dues of the plaintiff, the plaintiff is entitled to recover a sum of Rs.45,72,490/ jointly and severally from the Civil Suit No.209737/2016 M/s. Loyal Scaffolding P. Ltd. v M/s. Mihir Buildcon P. Ltd. & Ors.
Page No.10 of 12defendant no.1 company and the defendant no.2.
ISSUES NO.3 & 615. The onus of leading evidence qua both these issues was placed upon the defendant no. 1 company. In view of the failure of the defendant no. 1 company to lead any evidence and in view of the findings already given qua issues no. 1 and 2, both these issues are decided in favour of the plaintiff and against the defendants. It is held that this suit was all along, maintainable and that this suit has been filed on the basis of a valid cause of action.
ISSUES NO.4 & 516. Both these issues pertain to the liability of the defendants no. 2 and 3 to pay the dues of the plaintiff. In view of clause 13 of the contract dated 01.04.2009, Ex.PW1/7(OSR), it is held that the defendant no. 2 is jointly and severally liable with the defendant no. 1 company to pay the dues of the plaintiff. Further, in view of the law laid down by the Hon'ble High Court of Delhi qua liability of a director of a company to pay the dues of the company, in Tristar Consultants v Vcustomer Services India Pvt. Ltd., AIR 2007 Delhi 157 and Mukesh Hans and Anr. v Smt. Usha Bhasin and Ors., 2010 SCC OnLine Del 2776, it is held that the defendant no. 3 is not liable to pay the dues of the plaintiff.
17. In view of the aforesaid, the issue no. 4 stands decided partly in favour of the defendants with the rider that the impleadment of the Civil Suit No.209737/2016 M/s. Loyal Scaffolding P. Ltd. v M/s. Mihir Buildcon P. Ltd. & Ors.
Page No.11 of 12defendant no. 3, as a defendant in this suit, does not vitiate this suit. Also, in view of the aforesaid, the issue no. 5 stands decided partly in favour of the defendants with the rider that the filing of this suit, without any cause of action against the defendant no. 3, does not vitiate this suit.
RELIEF
18. In view of the aforesaid findings given qua the issues framed in this suit, on 27.08.2016, this suit is partly decreed in favour of the plaintiff and against the defendant no. 1 company as well as the defendant no. 2. It is held that the plaintiff is entitled to jointly and severally recover from the defendant no.1 company and the defendant no. 2, a sum of Rs.95,25,186/ along with pendentelite interest at the rate of 9% per annum and future interest at the rate of 6% per annum. 1 The parties are left to bear their own costs as they have been guilty of misdemeanors, during the trial of this suit.
19. After preparation of the decree sheet by the Reader, the file shall be consigned to the record room. JAY Digitally signed by JAY THAREJA THAREJA Date: 2021.09.23 17:19:09 +0530 Announced in open Court (Jay Thareja) today on 23.09.2021 Ld. ADJ07, South East District, Saket Courts/Delhi 1 As per the judgment of the Hon'ble Supreme Court of India in Central Bank of India v Ravindra, AIR 2001 SC 3095, the grant of pendentelite and future interest is a subject matter of the discretion of the Court and not to be governed by the agreement between the parties. Keeping in view the fact that the transaction between the parties was commercial; the fact that the Arbitration and Conciliation Act, 1996 and the Negotiable Instruments Act, 1881 contemplate grant of interest at the rate of 18% per annum and that Section 34 of CPC, 1908, contemplates grant of interest at the rate of 6% per annum, the plaintiff has been granted pendentelite interest at the rate of 9% per annum and future interest at the rate of 6% per annum.
Civil Suit No.209737/2016M/s. Loyal Scaffolding P. Ltd. v M/s. Mihir Buildcon P. Ltd. & Ors.
Page No.12 of 12