M/S Coim India Pvt Ltd v. M/S Kurt O John Shoe Components(I) Pvt Ltd

ORDER %

09.07.2013 lA No. 2523 of 2011 fender Order XXXVII Rule 3(5) Code of Civil Procedure, 1908 for leave to defend]

¶1This summary suit has been filed by the Plaintiff under Order XXXVII of the Code of Civil Procedure 1908 ('CPC') for recover}' of a sum of Rs. 1,40,64,950 together with pendente lite and future simple interest @ 22% p.a..

¶2The case of the Plaintiff is that it has its registered office at Rajendra Place, New Delhi. The orders placed by Defendant No.l were received by the Plaintiff at its office in New Delhi. Defendant No.2 is the Managing Page 1 of8 Signed By:RAM DATT Certify that the digital and physical file have been compared and the digital data is as per the physical file and no page is missing. Director and signatory of the cheques issued by Defendant No.l. Even prior to 1®^ April 2007, the Plaintiffwas supplyingto DefendantNo.l several items like polyol, isocyanate Urecom, etc, on 60 days' credit and subject to the jurisdiction of the Delhi Courts. Orders from Defendant No.l were received and accepted by the Plaintiff at its office in New Delhi. Defendant No.l had been remitting the on account part payment by cheques to the Plaintiff at the said registered office. The Plaintiff states that a confirmation of accounts was duly signed by the authorised signatory of Defendant No.l, Mr. SanjaySwami,on 1®' April2007. This concernedthepurchasesofgoods by DefendantNo.l from the Plaintiffup to 1"'April2007.

¶3In para 6 ofthe plaint,the detailsofthe invoicesfrom 6^^ April 2007 to 11*^November2008 for supplyofgoods by the Plaintiffto DefendantNo.l and the amount due against each of the invoice has been set out.

¶4It is stated that Defendant No.l has issued Sales Tax C-form in favour of the Plaintiff, thus confirming the purchase of goods under the said invoices from the Plaintiff. The Plaintiff has placed on record the originals of the invoices containing endorsement on the reverse of the terms of payment, of which one is that "interest @ 22% p.a. be charged in case of delay in payment". It is also clearly mentioned that "all disputes are subject to the jurisdiction of Delhi Courts only".

¶5The Plaintiff has stated that Defendant No.l had to pay it a total outstanding sum of Rs. 1,84,99,624.54, after accounting for the sum covered by the invoice for which C-form had been issued and for which payment had been received. There was a balance payment of Rs. 1,00,11,523.37 still due from Defendant No.l, which it had failed to do despite repeated reminders and oral assurances. In para 10 of the plaint, it is stated that as against the aforementioned balance amount, and as on account, part payment of Rs. 37,35,462 had been offered for which cheques had been issued with the assurance that the sum would be paid with interest. The details of the cheques issued, date and amount have been set out inpara 10. Relianceis placedon a letterdated 7^ February2009 issued by the authorised signatory of Defendant No.l enclosing a cheque for Rs.30,00,000 and assuring that it would pay Rs. 50,000 to Rs. 75,000 per month against the outstanding payment and give an advance payment against the materials purchased. It also undertook that the cheques which had expired would be replaced. However, no such payment was made. It is stated that when the said cheques, as detailed in para 10, were presented for Page 3 of8 payment, they were returned dishonoured with the remarks "payment stopped by the drawer". Separate complaints under Section 138 of the Negotiable Instruments Act, 1881 have been instituted by the Plaintiff against the Defendants. It is stated that in nine criminal complaints, an assurancewas givenbeforethe Courtofthe learnedMetropolitanMagistrate by learned counsel for the Defendants that they would settle those complaints by making payment of the cheque amounts to the tune of Rs.6,57,680.Accordingly,thePlaintiffhas restrictedits claimsto thepresent suit for recoveryofRs. 93,53,843,reservingits right to claim the further sum ofRs. 6,57,680in casethe aforementionedpaymentis not madeby the Defendants.

¶6In para 14, it is stated that on the balance sum of Rs. 93,53,843,the Defendantsare liableto pay Rs. 47,11,107as interest@22% p.a. and that the total sum works out to Rs. 1,40,64,950on the date of the filing of the suit.

¶7In the applicationfor leaveto defend,it is statedby the Defendantthatthe mere issuingofbills by the Plaintiffto the Defendantdid not constitutea written contractbetween the parties and therefore,the present suit under CS(OS) No.855of2010 Order XXXVII CPC is not maintainable. Secondly, it is submitted that the suit is liable to be dismissed for want of territorial jurisdiction as no cause of action has arisen in Delhi. The Defendant No. 2 does not reside in Delhi. The office and works of Defendant No. 1 are situated in Noida, U.P. The goods were supplied at Noida, U.P. Thirdly, it is submitted that there was no basis of claim ofpendente lite and future interest @ 22% per annum. Such claim is not covered under Order XXXVII CPC. In any event the above issues are all triable issue for which evidence has to be led. Lastly, it is pointed out that the Plaintiff has made contradictory statements in the plaint regarding the amount due.

¶8Learned counsel for the Defendants adds that the sum total of all the invoices, sales tax forms 'C works out the amount Rs. 83 lakhs and there is no evidence of the Defendants owing the Plaintiff the sum as claimed in the plaint. It is pointed out that the Plaintiff has admitted that the Defendants had paid Rs. 84,88,101 towards the goods supplied by the Plaintiff. It is stated that after filing of the suit, the Defendant No. 1 has paid a sum of Rs. 7,50,000 towards the settlement of nine complaint cases filed under Section 138 of the Negotiable Instrument Act ('NI Act'). The amount as claimed in the plaint is stated to be incorrect. Reliance is placed on the Page 5 of8 decisionsin MechalecEngineers&Manufacturingv. BasicEqi^ments AIR 1977SC 577 and Raj Duggalv. RameshBansalAIR1990SC 2218. Learnedcounselfor the Defendantsstates that the Defendantsare not in a goodfinancialconditionand willnot be in apositionto satisfythetermsthat may be imposedfor grantofa conditionalleavetodefend.

¶9In replyto the application,the Plaintiffhas pointedout interaliathatafter filing ofthe suit, Defendantshad paid to the Plaintiff a sum of Rs. 6,57,680and not Rs. 7,50,000as incorrectlystatedby the Defendants.It is statedthatevenon the dateoffilingofthe reply, i.e., 5"^ September2011 the Defendantsowed Rs. 93,53,843 besides interestand costs. It is reiterated that a separate complaint under Section 138 NI Act filed against the Defendantsin respectofthe dishonouredchequedated20"^ August2009 for Rs. 30 lakhs is pending.It is deniedthafthePlaintiffacceptedany cheque towardssecurity.It is pointedout that initiallyacheque dated 20"^ August 2009 for Rs. 30 lakhs was issued againstthe already dishonouredcheque dated 30 June 2008 for Rs. 30 lakhs and in responseto the legal notice dated24^''January2009 issuedto DefendantsunderSection138 NI Act. The said cheque for Rs. 30 laldis was issuedby the Defendantsto the Plaintiff towardspartpaymentofgoodsalreadypurchasedby the Defendantsand not CS(OS) No. 855 of2010 " , Page 6 of8 as any securityas falselyand dishonestlyallegedby the Defendants.

¶10It appears to this Court that the defence set up by the Defendant nothingbut moonshine.Copiesofthe invoicesraisedby the Plaintiffon the Defendanttowards supply of goods have been filed in the original. The reverseofeachinvoicestatesthat"alldisputesare subjectto thejurisdiction of Delhi Courtsonly".

¶11As regardsthe issueofjurisdictiontheplaintsets outthe seriesofevents whichshowthatpartofthe causeofactionarosein Delhi. Clearlythe order was placedin New Delhi and paymenthad been made in Delhi.Thereis no merit in this contention.The Defendantshave been unable to show that it has at any pointin time deniedits liabilityto makepaymentto the Plaintiff for the goods suppliedto it by the Plaintiff.Indeed, the cheque of Rs. 30 lakhs appears to have been issued by the Defendantsnot once but twice. Consequently,therefore,thesecouldnot have been issuedto the Plaintiffby way of security.

¶12The Courtis satisfiedthatthe Plaintiffhas been able to demonstratethat in the absenceof a specificdenial by the Defendants,the Defendantsowe the Plaintiffa sum of Rs. 93,53,843. The rate of interest is also clearly CS (OS)No. 855 of2010 IS specifiedon the reverseof each invoice.The Court is of the view thsU^ Defendantshave failed to raise any triableissue as such. The Plaintiffhas successfullydemonstratedthat the Defendantsowes the Plaintiffa sum of Rs. 93,53,842togetherwithpendentelite and future simpleinterest@22% per annum from the date ofeach invoice^illtill the date ofpaymentofthe amount against such invoices.

¶13lA No. _^5a"of2011 filed by the Defendantsfor leave to defend is accordinglydismissed.The defenceofDefendantsis struckoff The suit is decreedas prayedfor by the PlaintiffwithcostsofRs. 20,000.

¶14Decreesheetbe drawnup accordingly. JULY09,2013 S.MURALIDHAR.J Tp/rk

7^ * IN THE HIGH COURT OF DELHI AT NEW DELHI + CS (OS) No. 855 of 2010 COIM INDIA PVT LTD Plaintiff Through: Mr. Pankaj Chaudhary, Advocate versus KURT O JOHN SHOE COMPONENTSCI) PVT LTD & ANR Defendants Through: Mr. Murari Kumar & Mr. Yakesh Anand, Advocates CORAM: JUSTICE S. MURALIDHAR