Poona Radiology Services Private ... vs Philips Electronics India Ltd.
2007 Latest Caselaw 1605 Del

JUDGMENT

Manmohan Sarin, J.

1. The challenge in the present appeal is against order dated 6.10.2006 of the Additional District Judge allowing the application under Order 12 Rule 6 CPC and partially decreeing the suit. Trial Court record had been called for and received. Counsel for the appellant Mr. Ashish Wad and Mr. Rajeev Virmani, counsel for respondent were heard on 20.8.2007. The case was adjourned to 21st August, 2007 for further hearing. On 21st August, 2007 , Mr. Neeraj Kishan Kaul, Senior Advocate, appeared for the appellant. Both parties were heard at length and judgment reserved.

2. The appellant impugns the partial decree passed under under Order 12 Rule 6 CPC for a sum of Rs. 12,63,000/- in favor of the respondent and against the appellant. The surviving claim of the respondent in the suit is with regard to the interest @ 18% on the decreed amount from 23.11.1998 to 27.1.2000 and pendente lite interest at the same rate.

3. Before we notice the grounds of challenge and submissions of the appellant, it would be appropriate to set out in brief the facts culminating in the filing of the suit and passing of the decree pursuant to the application under Order 12 Rule 6 CPC.

(i) Respondent instituted a suit bearing Suit No. 123/2000 against the appellant in the sum of Rs. 15,26,064.89 (Rupees Fifteen Lac Twenty Six Thousand Sixty Four and Eighty Nine Paisa). Out of the above Rs. 12,63,700/- was claimed as the balance price of the x-ray tube supplied and the remaining amount of Rs. 2,62,364.89 as interest @ 18% on the unpaid amount. The relevant facts shorn of all unnecessary details are that the respondent had supplied a Whole Body CT scan Machine being CT Scanner system model Picker IQ/TC hereinafter referred to as CT Scanner in the month of July, 1993-94. The appellant subsequently required one x-ray tube for the CT Scanner and had asked the respondent for a quotation for the same. Respondent in response, sent a quotation No. TSG/014/98-99 dated 29.7.98 to the defendant offering to supply 2 MHU x-ray tube at a price of Rs. 14,70,500/-, exclusive of octroi and local taxes requiring the payment to be made by demand draft payable at New Delhi. The appellant vide its letter dated 20.11.98, offered to purchase the said x-ray tube for a total price of Rs. 14,63,700/- and sent a demand draft bearing No. 228390 dated 21.11.98 payable at New Delhi. The appellant indicated the following payment terms:

1. Rs. 2 lacs by demand draft dated 21.11.98 payable at New Delhi.

2. Balance amount of Rs. 12,63,700/- will be paid within 45 days of the installation of CT Tube in our unit at Pune. Kindly dispatch the tube at the earliest.

(ii) Respondent, in the event, accepted the aforesaid order and raised its invoice-cum-challan bearing No. CT/98-99/16 dated 23.11.1998 for a total sum of Rs. 14,63,700/-. Apart from other stipulations with regard to sending of C/D/concessional sales tax form, the invoice carries the legend "Interest at the prevailing bank rate will be levied on payments delayed beyond the due date." Another significant term was "All disputes subject to Delhi/New Delhi jurisdiction." It is the respondent's case that it duly installed the 2 MHU tube as ordered and the job report evidencing successful installation is at page 120 of the paper book. Respondent, per force, had filed the suit as the sum of Rs. 12,63,700/- remained unpaid.

(iii) Respondent maintains that it continuously followed up with the appellant for payment of the balance price but to no avail. So much so, that the respondent vide its letter of 5.4.1999, notified the appellant that they would be compelled to take back the x-ray tubes in their stock in the absence of payment and that instructions had been issued to the department to cancel the invoice relating to the supply of the x-ray tubes and that the x-ray tube should be returned and the respondent would raise a fresh invoice on pro-rate basis for the number of exposures for which the x-ray tube had been utilized. The appellant, it appears, in response, intimated that they would accept the proposal of removal of tube subject to reimbursement of dues of Rs. 19 lacs by means of demand draft payable at Pune and installation of old CT tube in CT scan machine. Such a condition was not acceptable and there was no question of the respondent accepting this counter proposal. As the amount remained unpaid, respondent was constrained to file the above suit.

4. The appellant filed a written statement wherein it had claimed breaches on the part of the respondent from the very inception of the supply of main CT scan machine. Firstly, the appellant claims that the respondent was required to install the machine by February, 1994 but it delayed the same by over 21/2 months. Accordingly, appellant had penalized the respondent for Rs. 4 lacs for the said delay. Respondent found this unpalatable and all its subsequent actions are alleged to be biased with a view to cause harassment to the appellant for the levy of this penalty. Appellant had refused to refund the sum of Rs. 4 lacs which had been deducted by it as a penalty from the price of the CT Scan machine. Appellant claimed that the CT Scan unit had inherent manufacturing defect and basic engineering assembly failed, which resulted in early failure of parts. The respondent began to charge exorbitant cost for spare parts. Further, respondent refused to supply the parts without 100% advance payment. Appellant contends that the respondent had supplied second hand refurbished CT Scan Unit which had frequent breakdowns and huge financial loss. Appellant also contends that the respondent had supplied a 2 MHU x-ray tube instead of 1 MHU tube, which was economical and cheaper. Appellant, therefore, had to bear additional cost. In substance, the appellant claims that it has counter claims of nearly Rs. 22.5 lacs with interest @ 18% for the loss caused to the appellant. Respondents in response in the replication has set out firstly that the defendant has neither pleaded a counter claim in the written statement or paid Court fee therefore. Without prejudice, it is stated that the said counter claim would be barred by limitation and cannot be looked upon or adjudicated in the absence of any Court fee and there is no counter claim in law before the Court. Respondent has also denied allegations of malfunctioning of the CT Scan machine relying on the fact that the x-ray tube supplied originally with the machine had already done more than 40,000 exposers as is apparent from the meter reading. Further, that the appellant was duly notified of the latest advances in technology and given the quotation for 2 MHU as well as 1 MHU tubes. The appellant took a conscious decision and opted for the 2 MHU tube after appreciating and understanding the advantages over the 1 MHU tube. As the appellant had been defaulting in payments, the respondent was well within its rights to insist on a 100% advance for supply of spare parts. In short, the submission is that the appellant cannot in the present suit, raise the grievance with regard to the supply for the CT Scanner for which the order was placed in 1993 and completed in 1994 when the question comes for payment of the balance price of the 2 MHU x-ray tubes.

5. It is in the aforesaid background of facts and pleadings that we have to consider the challenge to the judgment of the Additional District Judge.

6. We may notice that the Additional District Judge has comprehensively dealt with the factual aspects as also the judgment cited by the parties before him and rightly appreciated and analyzed the factual position that merely raising a claim for Rs. 22.5 lacs for alleged defects in a CT Scan Machine supplied in 1994 which indisputably is being used, cannot be made the basis for denying the payment of the balance price in respect of the 2 MHU x-ray tube supplied in 1998 for which, there is admission with regard to balance amount payable and the job report shows its satisfactory installation. Learned senior counsel Mr. Neeraj Kishan Kaul submitted, at the outset, that the letter dated 20.11.1998, wherein the payment terms were given, could not be acted upon as an admission. He submits that the written statement had to be read as a whole where the appellant has denied the claim pointing out that the respondent owed it over Rs. 22.5 lacs on account of the various breaches enumerated therein.

7. He next submitted that the Additional District Judge had not dealt with the objection raised regarding lack of jurisdiction. The ADJ was obliged to deal with the said objection and the respondent could have been non-suited on that ground. In this view of the matter, we requested the learned Counsel to address us on this aspect to demonstrate if there was any prima facie case with regard to the Court lacking jurisdiction.

8. Mr. Neeraj Kishan Kaul, learned Senior counsel submitted that the quotation of the respondent was accepted at Pune from where order was placed. Hence it was contended that Pune would have jurisdiction. We find that quotation dated 29.7.1998 appearing at page 118 itself prescribes that the delivery would be made from the stock on receipt of confirmed order and advance in the form of demand draft payable at New Delhi. This would indicate that the order would be placed and accepted at New Delhi. This was followed by the appellant's own letter dated 20.11.1998 when it offered the payment term with a draft of Rs. 2 lacs payable at New Delhi and in fact, so paid. Lastly, the invoice based on which the payments were made and the machine was delivered, carried the term "all disputes subject to Delhi/New Delhi jurisdiction. It is not the appellant's case that it did not accept the invoice. In these circumstances, it cannot be said that the Trial Court at Delhi lacked the jurisdiction to try and entertain the suit.

9. Coming next to the question of admissions in the written statement and the correspondence. The appellant's case appear to be that it was under duress and pressure that it had accepted the CT Scan Machine and various other breaches on the part of the respondent. Appellant apart from the contract for the supply of CT Scanner, which was concluded in the year 1994 and the machines as supplied, being used by the appellant, had failed to take any action for breach except raising a bald plea in the written statement wherein it was averred that "the defendant reserves the right to file a counter claim or separate suit for recovery of the amount due from the plaintiff to the defendant." In the absence of any counter claim, the respondent could not be non-suited or denied the partial decree on admissions. In para 5, it is stated that "....The defendant merely wants the legitimate dues owned to them by the Plaintiff to be adjusted against the cost of the Ct Scan Tube." We may also note that at one stage, the respondent-plaintiff had offered to take back the tube and charge the appellant for the exposures used but the appellant was not willing for the same and wanted payment of Rs. 19 lacs as damages.

10. We, therefore, find that in this instance, the price of the 2 MHU x-ray tube is not in dispute and their supply and installation is also not in dispute. Appellant vide its letter of 28.11.98 had placed the order with the payment terms:

1. Rs. 2 lacs by way of demand draft dated 21.11.98.

2. Balance amount to be paid within 45 days of the installation of CT tube in that unit at Delhi.

This eventuality of installation is also not in dispute. The report at page 120, which is signed by the appellant and which is not in dispute, shows satisfactory installation of the machine.

11. In these circumstances, it cannot be said that the exercise of discretion of the learned Additional District Judge in decreeing the suit partially for the balance price of the x-ray tube was in any manner unwarranted. The judgments relied on by the appellant namely Trans Asia Carpets Ltd. v. Coirfoam (India) Pvt. Ltd. and Raj Kumar Chawla v. Lucas Indian Services reported at would, in our view, not advance the appellant's case. In Raj Kumar Chawla's case, the Court while acknowledging the wider meaning and liberal construction to be given to admission without imposition of any unreasonable restriction to the term, has cautioned that Court should satisfy itself that all essential ingredients of admission are satisfied before decree is passed. We have no disagreement with the above proposition. As noticed by us, in the instant case, there is no dispute arising with regard to the supply of the x-ray tube and the payment terms which have been admitted by the appellant. We have already discussed that the appellant has also not been able to demonstrate any prima facie merit in the objection with regard to jurisdiction to non suit the respondents.

We accordingly find no merit in the appeal and the same is dismissed, with no order as to costs.