M/S Vee Vedionics Pvt. Ltd. And ... vs M/S D.R. Plastics
2009 Latest Caselaw 4504 Del

*           IN THE HIGH COURT OF DELHI AT NEW DELHI

                        + RFA No. 193/1997

                                        Date of decision: 06.11.2009

IN THE MATTER OF :

M/S VEE VEDIONICS PVT. LTD. AND ANR.           ..... Appellants
                  Through: Mr. Pawan Kumar Bansal, Advocate

                   versus


M/S D.R. PLASTICS                                       ..... Respondent
                        Through: Mr. Alok Bhachawat, Advocate,
                        Mr. Syed Hasan Isfahani, Advocate, Mr. Jainul
                        Abidin, Advocate and Mr. Udai Singh, Advocate.

CORAM

* HON'BLE MS.JUSTICE HIMA KOHLI

     1. Whether Reporters of Local papers may
        be allowed to see the Judgment? No.

     2. To be referred to the Reporter or not? No.

     3. Whether the judgment should be
        reported in the Digest? No.


HIMA KOHLI, J. (ORAL)

1. The present appeal is directed against the judgment and

decree dated 27.02.1997 passed in a suit for recovery of a sum of

Rs.1,56,519/- filed by the respondent, proprietorship firm (plaintiff in

the court below) against the appellants (defendants in the court

below), for the goods supplied to the appellants.

2. Briefly stated, the facts of the case, as culled out from the

plaint are that the respondent was dealing in all kinds of plastic raw

materials and the appellants had dealings with the respondent as they

were purchasing plastic raw materials from the respondent against

payment as also on credit basis. The respondent averred that it was

maintaining a regular account in respect of the purchases made from it

and the account of the appellants showed a debit balance of

Rs.1,26,225/- as outstanding since 27.01.1995. The respondent

claimed that despite repeated requests and assurances from the

appellants, the latter did not clear the outstanding payment. It was

further stated that appellant No. 1 issued a letter dated 12.06.1995 to

the respondent stating inter alia that the outstanding payments which

could not be cleared on time due to liquidity crisis would be cleared

soon. Thereafter, even a fax message is stated to have been

forwarded by the appellants to the respondent assuring it that the

balance amount would be released on 20.08.1995 but despite the said

assurance, payments were not released by the appellants. As a result,

the respondent served a legal notice dated 11.09.1995 upon the

appellants by Registered AD Post as also under Postal Certificate,

followed by institution of a suit for recovery of Rs.1,56,519/- from the

appellants alongwith pendente lite and future interest @ 24% per

annum from 27.01.1995 till realization.

3. The aforesaid suit was contested by the appellants, who

filed a written statement. In the written statement, it was admitted

that the appellants had dealings with the respondent and were

purchasing material from it against payment as well as on credit.

However, the correctness of the accounts maintained by the

respondent was disputed. It was denied that a sum of Rs.1,26,225/-

was due or outstanding against them. The receipt of the legal notice

dated 11.09.1995 was also denied by the appellants.

4. On merits, it was pleaded by the appellants in their written

statement that the respondent had supplied sub-standard and

defective material to the appellants and though they had requested

the respondent to replace the said material, needful had not been

done, and the defective material continued to lie with the appellants.

An objection with regard to territorial jurisdiction of the Delhi court to

entertain the suit filed by the respondent was also raised on behalf of

the appellants. An additional plea was taken in the written statement

that an excess payment of Rs.1,15,955/- had been made to another

proprietorship concern of the respondent, namely, M/s Rohit Polymers

against inferior and rejected material and that a separate suit for

recovery was instituted by the said firm against the appellants. The

appellants urged that the said amount was liable to be adjusted in the

other account.

5. After the pleadings were completed, the following three

issues were framed by the trial court:-

"1. Whether the material supplied by the plaintiff to the defendants was below specification, below

standard and defective. If so, to what effect? OPD.

2. Whether the defendants had made a request to the plaintiff to replace the said material and get payments for the specific material. If so, its effects? OPD.

3. Relief."

6. Evidence was led by both the parties. The

respondent/plaintiff produced Shri Bhanwar Lal Doshi, proprietor of the

firm as PW1 and the appellants produced Shri J.S. Madan, Addl.

Director of the appellant No.1, as DW1. After perusing the pleadings,

documents placed on the record and examining the evidence of the

parties, the trial court answered both issues against the appellants and

held that they had failed to discharge the onus placed on them by

proving that the material supplied by the respondent was below

specification, sub-standard and defective or that they had made any

request to the respondent to replace the said material and get

payment for the specified material. As a result, the suit of the

respondent was decreed against the appellants for a sum of

Rs.1,56,519/- with costs and interest payable @ 24% per annum from

the date of filing of the suit till realization of the decretal amount.

Aggrieved by the said judgment and decree, the appellants preferred

the present appeal.

7. Counsel for the appellants states at the outset that though

a ground has been taken in the appeal that the trial court ought to

have framed an issue with regard to territorial jurisdiction of the court

to try and entertain the suit instituted by the respondent, however the

said objection does not survive for the reason that at the time of

admission of the appeal, on 07.08.1997, an application filed by the

appellants seeking permission to lead additional evidence in the appeal

on the question of jurisdiction, was rejected with the observation that

no such issue was claimed or got framed and as such, the point of

jurisdiction could not be raised in appeal in view of Section 21 of the

CPC. It is pertinent to note that as the present appeal was filed

against a money decree, while admitting the appeal vide order dated

7.8.1997, on the stay application accompanying the appeal, the

Division Bench stayed the execution of the decree in view of the

statement made on behalf of the appellants that the decretal amount

would be deposited in the trial court within four weeks. Permission

was also granted to the decree holder to recover the money deposited

on furnishing security for restitution during the pendency of the

appeal. However, the decretal amount was not deposited by the

appellants in the trial court. As a result, vide order dated 12.9.1997,

the ex-parte interim order dated 7.8.1997 was vacated. Counsel for

the respondent states that despite initiating execution proceedings in

respect of money decree in the Court at Bhopal, the appellants have

not paid any amount to the respondent till date.

8. Counsel for the appellants submits that apart from the issue

of jurisdiction which had been turned down earlier as noted above, the

impugned judgment is erroneous inasmuch as the learned ADJ erred in

arriving at the conclusion that the appellants were unable to establish

that the material supplied by the respondent was defective and failed

to consider the submissions made on behalf of the appellants that such

defects were conveyed to the respondent telephonically. He further

states that the factum of the raw material being below specification

and lying in the godown of the appellants, was pointed out to the trial

court but was not taken into consideration while deciding the case.

9. I have heard the counsels for the parties and perused the

trial court record including the pleadings, the documents placed on the

record and the deposition of the witnesses. The submission of the

counsel for the appellants to the effect that the trial court failed to

consider the relevant documents placed on the record, which

established that the material supplied by the respondent to the

appellants was sub-standard has to be examined in the light of the

documents themselves. Ex.DW1/1 is a letter dated 27.12.1994 issued

by the appellants to the respondent. In the said letter, there was a

reference made to some "shortage in the material being received".

Further, a request was made to the respondent to maintain

consistency in the quality and specification of the material. However,

the appellants did not inform the respondent that the material supplied

by it had been rejected on the ground of the same being sub-standard

or not up to the mark.

10. Ex.DW1/2 is a letter dated 03.01.1995 addressed by the

appellants to the respondent wherein, the respondent was assured

that as in the past, payments would be made to it. However, a rider

was added that the rejections would be adjusted. No mention was

made of the extent of rejection or the grounds of rejection of the

consignment. Further, if the information about defective material had

come to the knowledge of the appellants on 31.12.1994, they would

have mentioned the details of the defective material in their letter

dated 03.01.1995 (Ex.DW1/2) but no such details were mentioned in

the said letter. Rather, the appellants released certain payments to

the respondent on 23.01.1995 (wrongly typed in the impugned

judgment as 27.01.1995). It is pertinent to note that apart from the

aforesaid letters, there is no other correspondence placed on the

record by the appellants to establish that it intimated the respondent

at any stage, about the sub-standard and poor quality of the material

supplied or of rejection of any consignment. Even if it was accepted

that it being a commercial transaction, the correspondence exchanged

on the issue between the parties was limited and most of the

interaction was done by telephonic communication, there is no getting

away from the fact that when the appellants received a legal notice

dated 11.09.1995 from the respondent, even then they did not choose

to rebut the contents of the said notice. The trial court rightly made an

observation that if the case of the appellants was that the material

supplied by the respondent was sub-standard, then they ought to have

replied to the legal notice of the respondent separately.

11. Looking at the stand of the appellants, they ought to have

at the first opportunity pointed out the defects in the material received

from the respondent and called upon it to take back the material or

replace it with the material as per specifications. No such steps were

taken by the appellants in this case. The complete silence maintained

by the appellants right from the dates of supply of the consignment,

i.e., 22.11.1994 and 03.11.1994, (Ex.DW1/3 and Ex.DW1/4

respectively) till September, 1995 when the legal notice was issued on

behalf of the respondent to the appellants only fortifies the deductions

drawn by the trial court to the effect that the defence of the appellants

that the material supplied by the respondent was below specification

and defective was only an afterthought. The trial court also took

notice of the contradictions in the stand of the appellants. While in

para 7 of the written statement, the appellants denied service of any

legal notice upon them, DW1 in his testimony admitted having

received the legal notice from the respondent. The relevant extract of

the statement of DW1 in this regard is reproduced hereinbelow:

"...... Notice dated Sept. 11, 1995 was received by the defendants in Sept. or October, 1995 and the said notice is Ex.D.W.1/PX. No reply to this notice was given by us, though we addressed a separate letter to the plaintiff. ......"

12. All the aforesaid facts and circumstances when examined

collectively, lead to the inevitable conclusion that the appellants were

liable to release the balance sum of Rs.1,26,225/- to the respondent

and that the said amount had been withheld by the appellants without

any justification. The defence taken by the appellants that the

respondent had supplied sub-standard or defective material to the

appellants remained unsubstantiated was therefore rightly rejected by

the trial court.

13. In view of the aforesaid discussion, this Court finds no

reason to interfere in the impugned judgment dated 27.02.1997. The

same is upheld. The appeal is, therefore, dismissed with costs

quantified at Rs.10,000/-. The trial court record be released forthwith.

                                                        (HIMA KOHLI)
NOVEMBER 06, 2009                                         JUDGE
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