Calcutta High Court

Skipper Limited vs Surender Kumar Goyal on 27 September, 2024

                 IN THE HIGH COURT AT CALCUTTA
                             ORIGINAL SIDE
                        COMMERCIAL DIVISION


Present:

The Hon'ble Justice Krishna Rao



                       G.A. (COM) No. 1 of 2023
                                    &
                       G.A. (COM) No. 2 of 2024
                                    In
                       CS-COM No. 562 of 2024
                       (Old No. CS 235 of 2023)



                             Skipper Limited

                                  Versus

       Surender Kumar Goyal, also known as Surender Agarwal




           Mr. Sayantan Bose
           Mr. Shounak Mukhopadhyay
           Ms. Manisha Das
           Ms. Ankita Choudhury
                                               ... For the plaintiff.


           Mr. Arijit Bardhan
           Mr. Sarosij Dasgupta
           Mr. Biswaroop Mukherjee
           Ms. Saheli Bose
                                               ... For the defendant.
                                         2


Hearing Concluded On : 22.07.2024

Judgment on              : 27.09.2024

Krishna Rao, J.:

1. The plaintiff has filed an application being G.A. (Com) No. 1 of 2023 in

C.S. (Com) No. 562 of 2024 (Old No. C.S. 235 of 2023) praying for

Judgment and Decree upon admission for a sum of Rs. 63,92,425.50

along with further interest at the rate of 24% per annum from 1st

November, 2023 till realisation or in the alternative, a direction upon

the defendant to furnish security of sum of Rs. 63,92,425.50.

By an order dated 13th December, 2023, this Court passed an ad-

interim order restraining the defendant from operating his bank

account/accounts maintained against Permanent Account No.

ACFPG3609L without leaving a principal amount of Rs. 38,63,500/-

and the interim order is still in existence.

2. The defendant has filed an application being G.A. (Com) No. 2 of 2024

praying for vacating interim order passed by this Court dated 13th

December, 2023 in G.A. (COM) No. 1 of 2023.

3. The plaintiff and the defendant had a business relationship. Pursuant

to orders placed by the defendant, the plaintiff has supplied PVC pipes

and fittings of various specifications to the defendant as per verbal

orders placed by the defendant. After supply of the materials, the

plaintiff has raised invoices. The plaintiff maintained a running and

open ledger account with respect to the invoices raised by the plaintiff

to the defendant and the amount paid by the defendant to the plaintiff.

In the present case, the transaction between the plaintiff and the

defendant.

4. As on 30th November, 2021, the outstanding due against the defendant

was Rs. 4,65,07,265.06. On request of payment of due amount, the

defendant has requested the plaintiff to take back part of the materials

supplied by the plaintiff and to adjust the value out of the pending

outstanding dues. The plaintiff has taken back the goods of the value of

Rs. 1,44,21,103/- and issued credit notes to the defendant for the said

materials.

5. The defendant has made payment of Rs. 52,50,000/- in between 1st

December, 2021 and 2nd March, 2022 to the plaintiff leaving the

balance amount of Rs.2,68,36,153.06. On 5th March, 2022, the

defendant communicated an account ledger maintained by the

defendant with respect to the plaintiff for the financial year 2021-2022

for a sum of Rs. 2,69,29,072.72 being due and payable by the

defendant to the plaintiff. Upon reconciliation, the plaintiff after

adjusting the net value of goods taken back and payments received

from the defendant, confirmed the amount due and payable by the

defendant to the plaintiff was Rs. 2,68,36,153/-. The plaintiff taking

into account that the business relationship with the defendant, the

plaintiff also acceded to the defendant's claim on account of old credit

note for a sum of Rs. 49,71,677/- as annual incentive on sales and

after adjustment of the said amount, credit note was also issued on 14th

June, 2022.

6. On further request of the defendant, the plaintiff further taken back the

materials during the period from 25th March, 2022 to 30th November,

2022 and issued credit notes for a sum of Rs. 81,02,012/- in favour of

the defendant leaving a balance outstanding of Rs.1,37,62,464.06 being

the price of goods sold and delivered. On 21st March, 2022, the

defendant made payment of Rs. 38,50,000/- in between 21st March,

2022 and 7th June, 2023 leaving a sum of Rs. 99,12,464.06 as

outstanding dues. In between 12th May, 2022 and 9th June, 2022, the

plaintiff has again issued credit notes for a sum of Rs. 48,48,957.46 to

the defendant leaving a sum of Rs. 50,63,506.60 as the balance on

account of the defendant.

7. By an email dated 16th December, 2022, the defendant admitted the

liability to clear the entirety of the outstanding and requested some

time to clear the dues. In between 27th June, 2023 and 27th July, 2023,

the defendant has further made payment of Rs. 12,00,000/- to the

plaintiff. After adjusting the amount of Rs. 12,00,000/-, an amount of

Rs. 38,63,506.60 was left due and payable by the defendant to the

plaintiff. The defendant has not paid any further dues and accordingly,

the plaintiff has filed the suit.

8. Learned Counsel for the plaintiff submits that by an email dated 21st

March, 2022, and the ledger account maintained by the defendant with

respect to the plaintiff, the defendant unequivocally and unambiguously

admitted that a sum of Rs. 2,69,29,072.72 was due and payable as on

21st March, 2022 by the defendant to the plaintiff on account of goods

sold and delivered by the plaintiff to the defendant.

9. Learned Counsel for the plaintiff submits that the admission made by

the defendant are of such nature that the defendant has no defence and

it is impossible for the defendant to succeed in respect of the admitted

amount of Rs. 38,63,506.60 along with interest @ 24% per annum.

10. Learned Counsel for the plaintiff further submits that there is an

apprehension of diversion, siphoning off and diminution of the assets

by the defendant with a view to defeat the execution of any decree

passed in the present suit.

11. Per contra, the defendant says that there is no admission in the emails

dated 5th March, 2022, 21st March, 2022 and 16th December, 2022. He

submits that the email dated 5th March, 2022, was only for the purpose

of reconciliation of Ledger Account Statement between the parties since

between the plaintiff and the defendant, the delivery of the materials

and payments thereof would occur on a rolling basis. He submits that

the same cannot be construed as an admission of liability in any

manner whatsoever.

12. Learned Counsel for the defendant submits that in a continuing

account, it may be possible that between two dates, there may be debits

to the account and "reversal of credits" or "settlement of the account"

and as such, an admission, if any, on the particular date, would not

result in a judgment in terms of Order 12, Rule 6 of the Code of Civil

Procedure, 1908. He submits that the plaintiff has relied upon the

email dated 5th March, 2022, whether the defendant had communicated

an account ledger for the financial year 2021-2022 showing the amount

of Rs. 2,69,29,072.72 being due and payable by the defendant to the

plaintiff on account of goods sold and delivered by the plaintiff to the

defendant but in the present application, the plaintiff has prayed for

Judgment and Decree of Rs. 63,92,425.50 as on 31st October, 2023.

13. Learned Counsel for the defendant submits that the purported

admission of the amount of Rs. 2,69,29,072.72/- as alleged by the

plaintiff to be borne out from the email dated 5th March, 2022 but the

amount claimed by the plaintiff is different from the amount mentioned

in the said email. He submits that subsequent email dated 16th

December, 2022 would demolish the alleged admission in the email

dated 5th March, 2022. He submits that before the pre-institution

mediation process, the claim of the plaintiff was Rs. 50,63,506.50 but

the claim in the present suit is a different amount.

14. Learned Counsel for the defendant submits that an elaborate process of

enquiry is not to be resorted to while adjudicating an application for

judgment upon admission. He submits that in the present case, the

defendant has specifically denied that any amount is due and payable

by the defendant to the plaintiff.

15. Learned Counsel for the defendant submits that the plaintiff has made

contradictory pleadings with respect to the quantum of its purported

dues and the defendant has denied the entire claim of the plaintiff. He

submits that the plaintiff in order to increase its margin of profit, had

willfully, illegally, deliberately and negligently engaged other entities to

act as its wholesaler or distributor in relation to the PVC pipes and

fittings in the State of Bihar without obtaining "No-Objection" from the

defendant despite it being agreed between the parties that the

defendant would be the sole distributor and wholesaler of PVC pipes

and fittings of various specifications, manufactured and supplied by the

plaintiff and the plaintiff would not appoint any other entity as a

distributor or wholesaler of its products without obtaining "No-

Objection Certificate" from the defendant.

16. Learned Counsel for the defendant submits that supply of expired

materials by the plaintiff was not made good by the plaintiff despite

assurances which resulted in injury, loss and damage to the defendant.

17. Learned Counsel for the defendant submits that an unsecured money

claim/ debt cannot be secured by an order of Court. He submits that

the power under Order XXXVIII Rule 5 of the CPC is a drastic one and

ought to be sparingly used and cannot be fashioned into a tool of

oppression.

18. Learned Counsel for the defendant submits that the nature of claim of

the plaintiff in the instant case is in the nature of an unsecured debt

and the same cannot be secured by an order of this Court. He prays for

vacating the interim order passed by this Court.

19. Heard the Learned Counsel for the respective parties, perused the

materials or record. The plaintiff has filed the suit praying for a

Judgment and Decree for a sum of Rs. 63,92,425.50. In the present

application, the plaintiff has prayed for judgment upon admission. The

plaintiff has relied upon an electronic mail dated 5th March, 2022,

wherein the defendant had communicated an account ledger

maintained by the defendant in respect of the plaintiff for the financial

year 2021-2022 wherein the defendant has shown the amount of Rs.

2,69,29,072.72 due and payable to the plaintiff. As per the business

relationship between the parties, the plaintiff has given credit note

dated 14th June, 2022 for a sum of Rs.49,71,677/- towards the annual

incentives on sales to the defendant. The defendant has returned some

materials back to the plaintiff to which the plaintiff has issued credit

note of Rs. 81,02,012/-. Subsequently, the defendant has made

payment of Rs. 38,50,000/- to the plaintiff. The plaintiff during the

period 12th May, 2022 and 9th June, 2022 has further issued credit

notes to Rs. 48,48,957.46/- to the defendant. After deducting the above

amount, as on 7th June, 2023, an amount of Rs. 50,63,506.60 was

remained due and payable by the defendant to the plaintiff. In between

27th June, 2023 and 27th July, 2023, the defendant has paid further

amount of Rs. 12,00,000/- to the plaintiff. As on date, an amount of Rs.

38,63,506.60 being the principal amount, is due and payable by the

defendant to the plaintiff.

20. In the affidavit-in-opposition, the defendant has denied with regard to

payment of Rs. 52,50,000/-, issuance of credit notes of Rs. 81,02,012/-

and further payment of Rs. 38,50,000/- leaving a balance of Rs.

50,63,506.60. The defendant further denied the principal amount of Rs.

38,63,506.60 is due and payable by the defendant to the plaintiff.

21. As per the case of the plaintiff, out of the total due amount of Rs.

2,69,29,072.72 the plaintiff has issued several credit notes and had

also given incentives to the defendant and only principal amount of Rs.

38,63,506.60 is due and payable by the defendant to the plaintiff but

there is no document placed on record by the plaintiff to say that the

plaintiff has taken back the materials from the defendant and issued

credit notes or the plaintiff had issued incentives to the defendant.

There is also no document to say that the defendant has unequivocally

admitted the claim of Rs. 38,63,506.60.

22. In the email dated 5th March, 2022, the defendant has forwarded

account ledger of the plaintiff for the year 2021-2022 showing an

amount of Rs. 2,69,29,072.72 due and payable and in the said email,

the defendant requested the plaintiff to send Ledger Account Statement

for reconciliation. By an email dated 22nd March, 2022, the plaintiff has

forwarded account statement to the defendant showing the amount of

Rs. 2,68,36,153.06 due and payable by the defendant. By an email

dated 16th December, 2022 at 10.48 AM informed to the defendant that

the plaintiff has not received payment and in reply to the said email, the

defendant had informed the plaintiff "Kuch wait karna hoga". In the

said email of the defendant, the amount is mentioned as Rs.

63,13,506.60 as on 16th December, 2022.

23. The defendant has not paid the amount of Rs.63,13,506.60 to the

plaintiff, the plaintiff has initiated pre-institution mediation process.

The defendant had appeared before the mediator and the defendant

stated before the mediator that the defendant is ready to pay Rs.

25,00,000/- as principal dues but the plaintiff has not accepted the

said proposal and no starter report was submitted. In between, the

defendant has paid Rs.12,00,000/- in four tranches to the plaintiff from

27th June 2023 to 27th July 2023.

24. In the case of Himani Alloys Limited -vs- Tata Steel Limited

reported in (2011) 15 SCC 273, the Hon'ble Supreme Court held that a

judgment can be given on admission contained in the Minutes of the

Meeting but the admission should be categorical and it should be a

conscious and deliberate act of the party making it, showing an

intention to be bound by it.

25. In the case of Scope Vincom Industries Pvt. Ltd. -vs- Sitaram

Sultania reported in 2018 SCC OnLine Cal 456, held that :

"7. There was a doubt as to the veracity of the figure of Rs.2,32,77,237/- in the confirmed accounts for the year ended March 31, 2016 that

had been raised by the plaintiff in the plaintiff's mail of April 4, 2016 when the plaintiff only indicated that the outstanding amount was to the extent of Rs.1,67,45,446/-. On the plaintiff's showing, the admission apparent from the document dated August 2, 2016 stood discredited since the opening figure therein could no longer be accepted to be Rs.2,32,77,237/-. A judgment on admission could no longer be passed on the basis of the accounts confirmed by the appellant on August 2, 2016 or on the basis of the figures reflected in the two cheques which corresponded to the exact amount indicated in the confirmed accounts of August 2, 2016"

26. In the present case, as per the confirmation of accounts issued by the

defendant reflects an amount of Rs. 2,69,29,072.72 but subsequently

as per the case of the plaintiff, the defendant has paid certain amount

and the plaintiff has taken back certain materials for which the plaintiff

had issued credit notes adjusting the amount and the plaintiff had also

given incentives to the defendant which was also adjusted and only an

amount of Rs. 38,63,506.60 is due and payable but the defendant has

categorically denied the said contention of the plaintiff and the plaintiff

has not produced any documents with regard to issuance of credit

notes, payment of amount by the defendant and grant of incentives by

the plaintiff to the defendant.

27. The account confirmation relied by the plaintiff as an admitted

document shows the amount of Rs. 2,69,29,072.72 but subsequently

the plaintiff has reduced the claim to Rs. 38,63,506.60 and there is no

document or any statement from the side of the plaintiff to say that the

defendant has unequivocally and unambiguously has admitted the

claim of the plaintiff to the tune of Rs. 38,63,506.60.

28. Considering the above, this Court is not inclined to pass Judgment and

Decree upon admission.

29. Now the question whether the interim order passed by this Court can

be vacated or not.

30. By an order dated 13th December, 2023, this Court passed an ad-

interim order restraining the defendant from operating his bank

account/ accounts maintained against Permanent Account No.

ACFPG3609L without leaving a principal sum of Rs. 38,63,500/-.

31. The plaintiff has prayed for a Judgment and Decree for a sum principal

amount of Rs.38,63,506.60 and interest of Rs. 25,28,918.90 in total Rs.

63,92,425.50. Mainly, the plaintiff has relied upon its claim on the

basis of confirmation of accounts, sent by the defendant through e-mail

dated 5th March, 2022 and e-mail dated 16th December, 2022 wherein

the defendant requested some time to make payment.

32. The defendant says that the plaintiff willfully, illegally, deliberately and

negligently engaged other entities to act as its wholesaler and/or

distributor in relation to PVC pipes and fittings in the State of Bihar.

The defendant further says that the plaintiff has supplied expired,

solvent and defective materials to the defendant which dehors the

business agreement entered between the parties. The defendant further

alleged that the plaintiff in order to increase its profit, directly

approaching the customers of the defendant and offering the PVC pipes

and fittings by erasing the scope of business of the defendant.

33. The defendant says that due to the conduct of the plaintiff, the

customers of the defendant who used to purchase materials from the

defendant on credit have stopped making payments to the defendant for

which the defendant has suffered grave business loss. The defendant in

support of its claim relied upon the WhatsApp messages dated 10th

June, 2021 and 6th November, 2021.

34. As per the account confirmation which the plaintiff has relied upon the

total amount due against the defendant was Rs. 2,68,36,153.06 and as

per the case of the plaintiff that out of the said amount, the defendant

had paid some amount, the plaintiff has deducted some amount as per

credit notes and incentives given by the plaintiff to the defendant and

now only an amount of Rs. 38,63,506.60 is due and payable along with

interest.

35. In the pre-institution mediation process, the defendant had agreed to

pay Rs. 25,00,000/- but the plaintiff has not accepted the proposal of

the defendant and due to failure of the mediation process, the plaintiff

has filed the suit.

36. The plaintiff says that there is real apprehension of diversion, siphoning

and diminution of assets of the defendant which will cause delay the

execution of the Judgment and Decree likely to be passed against the

defendant.

37. Order XXXVIII, Rule 5 of the Code of Civil Procedure, 1908, reads as

follows:

"5. Where defendant may be called upon to furnish security for production of property.-- (1) Where, at any stage of a suit, the Court is satisfied, by affidavit or otherwise, that the defendant, with intent to obstruct or delay the execution of any decree that may be passed against him,--

(a) is about to dispose of the whole or any part of his property, or

(b) is about to remove the whole or any part of his property from the local limits of the jurisdiction of the Court,

the Court may direct the defendant, within a time to be fixed by it, either to furnish security, in such sum as may be specified in the order, to produce and place at the disposal of the Court, when required, the said property or the value of the same, or such portion thereof as may be sufficient to satisfy the decree, or to appear and show cause why he should not furnish security.

(2) The plaintiff shall, unless the Court otherwise directs, specify the property required to be attached and the estimated value thereof.

(3) The Court may also in the order direct the conditional attachment of the whole or any portion of the property so specified.

[(4) If an order of attachment is made without complying with the provisions of sub-rule (1) of this rule, such attachment shall be void.]"

In the mediation process, the plaintiff has claimed Rs.

50,63,506.60. In the Non-Starter Report, it is recorded that the

defendant was ready and willing to pay an amount of Rs. 25,00,000/-

but the plaintiff has not accepted the proposal of settlement.

The plaintiff has admitted that in between 27th June, 2023 to 27th

July, 2023, the defendant has paid Rs.12,00,000/- in four tranches

and after deduction of the said amount, an amount of Rs.

38,63,506.60/- is due and payable by the defendant. In the email dated

13th December, 2022, the plaintiff informed about the due amount of

Rs.63,13,506.60 and in reply, the defendant had sent email on 16th

December, 2022 stating that "kuch wait karna hoga" but had not

denied the said amount.

38. The judgment passed by the Hon'ble Supreme Court in the case of

Rajendran & Anr. reported in AIR 2008 SC 1170, the Hon'ble

Supreme Court has held that the Court while exercising its jurisdiction

under Order XXXVIII Rule 5 of the CPC is required to form a prima facie

opinion at that stage and need not go into the correctness or otherwise

of all the contentions raised by the parties. In the case of Rahul S.

Shah reported in (2021) 6 SCC 418, the Hon'ble Supreme Court held

that the Court may further, at any stage, in the appropriate cases

during the pendency of the suit using powers under Section 151 of the

CPC, demand security to ensure satisfaction of any decree.

39. Considering the above, this Court finds that the plaintiff has made out

a prima facie case and balance of convenience are in favour of the