Jindal Photo Ltd. vs Jai Mahaveer Colour Lab & Anr.
2010 Latest Caselaw 5861 Del

         THE HIGH COURT OF DELHI AT NEW DELHI

%                     Judgment Pronounced on: 23.12.2010

+           CS(OS) No. 1240/2002

JINDAL PHOTO LTD.                              .....Plaintiff

                  - versus -
JAI MAHAVEER COLOUR LAB & ANR.              .....Defendants

Advocates who appeared in this case:
For the Plaintiff: Mr. Ajay Jain with Ms. Kanchan Yadav
For the Defendant: None.

CORAM:-
HON'BLE MR JUSTICE V.K. JAIN

1. Whether Reporters of local papers may                  No.
   be allowed to see the judgment?

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

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

V.K. JAIN, J. (ORAL)

1. This is a suit for recovery of Rs.33,09,614/-. The

case of the plaintiff is that it supplied two Mini Labs to

defendant No.2 on lease for a period of four years

commencing from May, 1996 and ending in April, 2000.

Defendant No.2 is stated to be carrying business under the

name and style of defendant No.1 Jai Mahaveer Colour Lab.

The combined lease rent of the two Mini Labs supplied to

the defendants is alleged to be Rs.1,11,987.53p per month.

It is further alleged that the defendants were required to pay

a sum of Rs.14,15,847/- to the plaintiff towards security

deposit and Rs.67,893/- towards lease management fee.

The plaintiff has also claimed a sum of Rs.27,482/- from

the defendants towards price of the spares supplied to

them. The amount of total monthly rent payable by the

defendants to the plaintiff is stated to be Rs.53,75,427/-.

Adding the amount of security deposit, lease management

fee and price of spares, the total amount comes to

Rs.69,25,649/-. The case of the plaintiff is that defendants

made aggregate payment of Rs.42,53,010.19p. to it on

different dates, leaving a balance sum of Rs.26,72,638.81p.

The plaintiff has claimed the aforesaid amount from the

defendants along with interest on that amount @22% p.a.,

which comes to Rs.6,36,975/-, making a total sum of

Rs.33,09,613.81p, rounded off to Rs.33,09,614/-.

2. The defendants filed written statement contesting

the suit. They took preliminary objections (1) that this

Court has no territorial jurisdiction to try the suit and (2)

that the suit is barred by limitation. On merits, it was

admitted that two Mini Lab Machines were supplied to the

defendants on hire purchase-cum-lease. The period of

lease, however, is alleged to be 47 months for one machine

and 35 months for the other machine. It has, however,

been admitted that the total lease rent was fixed at

Rs.1,11,987.53p. per month. As regards security deposit, it

is alleged in the written statement that the amount of

security was already deposited with the plaintiff at the time

the machineries were leased. As regards lease management

fee, the case case of the defendants is that the plaintiff had

agreed to waive that fee at the time of lease. As regards

price of spares, it is claimed that the spares worth

Rs.24,978/- were supplied to the defendant against which a

sum of Rs.24,500/- was paid vide demand draft dated 11th

March, 1998.

3. Vide order dated 7th December, 2004, the

defendants were proceeded ex-parte and the plaintiff was

directed to file affidavit by way of evidence. The defendants

thereafter filed two applications one being I.A. No.

2346/2006 (Section 151 CPC for setting aside ex parte order

dated 7th December, 2004) and the other being I.A.

No.2347/2006 (Section 5 of the Limitation Act). Those two

applications were dismissed in default on 19 th January,

2007. This was followed by three applications being IA Nos.

4181/2007 (O. IX R. 13 r/w S. 151 CPC), I.A.

No.4182/2007 (for exemption) and 4183/2007 (S. 5 of the

Limitation Act) for setting aside the ex-parte order dated 7 th

December, 2004. Those applications were also withdrawn

on 17th April, 2007. After recording of ex-parte evidence

when the matter was listed for arguments, the defendants

filed I.A. Nos. 257/2008 (O.9 R.13 CPC) and 259/2008 (S. 5

of the Limitation Act) for recalling of the order dated 19 th

January, 2007 and restoration of I.A. No.2346/2006. I.A.

257/2008 was dismissed as withdrawn on 7th January,

2010. Subsequently, an order was passed on 2nd December,

2010 dismissing both I.A. Nos. 257/2008 and 259/2008 in

default. Thus, both these applications stand disposed of.

4. The Mini Labs were supplied by the plaintiff to the

defendant No.2 in May, 1995. However, the statement of

account Exh. PW1/4 shows that payments were made by

the defendants to the plaintiff from time to time and the last

payment was made on 26th February, 2001. In view of the

provisions contained in Section 19 of Limitation Act, a fresh

period of limitation commenced from the date on which last

payment was made since all the payments are stated to

have been made by way of cheques. The suit having been

filed on 30th May, 2002 is, therefore, well within the

prescribed period of limitation.

5. As regards territorial jurisdiction of the Court, an

additional affidavit has been filed today by the plaintiff

which has been taken on record. It shows that the

defendant No.2 had approached the plaintiff company at its

registered office at 56/2, Hanuman Road, New Delhi -

110001 and placed orders for supply of two Mini Lab

Machines. The lease agreement between the parties is also

stated to have been signed at the office of the plaintiff

company at New Delhi. It is also stated in the additional

affidavit filed by the plaintiff that the defendants used to

make payment to the plaintiff company at its registered

office at 56/2, Hanuman Road, New Delhi-110001. Since

the order for supply of Mini Lab Machines was placed at

New Delhi, lease agreement between the parties was

executed at New Delhi and the payment was also to be made

at New Delhi, the part of cause of action arose in the

jurisdiction of this Court. Hence, Delhi Court has

jurisdiction to try the present suit.

6. It has been admitted in the written statement that

the lease rent was fixed at Rs.1,11,987.53p with respect to

both the Mini Lab Machines. The case of the defendants

was that the period of lease was 47 months in respect of one

Mini Lab Machine and 35 months in respect of other Mini

Lab Machine. The plaintiff on the other hand has filed an

affidavit of one Mr. S.P. Sharma, Manager (Technical) of the

plaintiff company, who has stated on oath that the plaintiff

had supplied two Mini Lab Machines to defendant No.2 on

lease for a period of four years. Since the deposition of Mr.

S.P. Sharma remains unrebutted, I hold that the lease

period was fixed at 48 months with respect to both the Mini

Lab Machines, as claimed by the plaintiff.

7. There is no dispute with regard to the payments

made by the defendants to the plaintiff towards lease rental.

They have made a total payment of rs.5242,53,010.19p. on

different dates, leaving a balance of Rs.26,72,638.81p. The

plaintiff has also claimed a sum of Rs.14,15,847/- towards

security deposit. A perusal of the written statement shows

that this is not the case of the defendants that they were not

liable to pay the security deposit to the plaintiff company.

Their case is that the amount of the security deposit was

already lying with the plaintiff company at the time the Mini

Lab Machines were leased. The defendants, however, have

not produced any evidence to prove the claim made by them

in this regard. I, therefore, hold that the plaintiff is also

entitled to a sum of Rs.14,15,847/- towards security

deposit.

8. As regards price of the spares, the case of the

plaintiff is that it had supplied spares worth Rs.27,282/-

whereas the case of the defendant is that they were spares

worth Rs.24,500/- and the price of those spares was paid

by them vide demand draft dated 11th March, 1998. I find

that in the replication filed by the plaintiff, there is no denial

of payment of Rs.24,500/- from the defendant vide demand

draft dated 11th March, 1998. Thus, the pleadings of the

parties contained an admission of the plaintiff regarding

receipt of Rs.24,500/- from the defendants towards price of

the spares supplied to them. Moreover, in the statement of

account filed by the plaintiff, there is no credit entry of

Rs.24,500/-. In this regard, I also noticed that in the

affidavit filed by the plaintiff, there is no averment that it

had supplied spares worth Rs.27,482/- to the defendants.

In the circumstances, I hold that the plaintiff is not

entitled to any amount from the defendants towards price of

the spares supplied to the defendants.

9. Coming to the interest part, I find that the plaintiff

has claimed interest @ 22% p.a. Exh.PW1/5 is the notice

sent by the plaintiff to the defendants on 28th February,

2002 demanding the principal amount of Rs.26,72,638.81/-

, within 15 days. It was also stated in the notice that if the

defendants failed to pay the dues within 15 days, they

would be liable to pay interest on the dues at the rate of

22% p.a. and such interest will be calculable from the

respective dates of defaults in payment of installments

and/or other dues till the date of payments of the dues

outstanding on reducing balance.

10. Section 3 of the Interest Act, 1978, to the extent it

is relevant, provides that in any in any proceedings for the

recovery of any debt or damages or in any proceedings in

which a claim for interest in respect of any debt or damages

already paid is made, the court may, if it thinks fit, allow

interest to the person entitled to the debt or damages or to

the person making such claim, as the case may be, at a rate

not exceeding the current rate of interest from the date

mentioned in this regard in a written notice given by the

person entitled or the person making the claim to the

person liable that interest will be claimed, to the date of

institution of the proceedings.

11. Since the defendants did not pay the principal

amount demanded by the plaintiff, they are liable to pay

interest from the date indicated in the demand notice.

Hence, the defendant would be liable to pay interest on the

outstanding amount with effect from 1st April, 2001, the

date from which interest has been claimed by the plaintiff.

Taking into consideration of the facts and circumstances of

the case including the nature of transaction between the

parties and the current rates of interest, I am of the

considered view that interest should be awarded to the

plaintiff at the rate of 12% p.a. The principal amount

payable to the plaintiff comes to Rs.2645156.81/-

(Rs.26,72,638 - Rs.27,482/-). The amount of interest

calculated on the amount of Rs.26,45,156.81/- for the

period from 14th January, 2001 to 30th April, 2002 comes to

Rs.3,43,870.19/-.

12. For the reasons given in the preceding paragraphs,

the plaintiff is entitled to recovery of principal amount of

Rs.26,45,156.81/- along with Rs.3,43,870.19/- towards

interest, from defendant No.2. Since defendant No.1 is only

a tradename adopted by the defendant No.2 and is not a

legal entity, no decree can be passed against it. A decree for

Rs.29,89,027/- with proportionate cost and pendente lite

and future interest at the rate of 12% p.a. is hereby passed

in favour of the plaintiff and against defendant No.2. The

decree sheet be prepared accordingly.

13          The suit stands disposed of.



                                           (V.K. JAIN)
                                             JUDGE

December 23, 2010
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