Scj Plastics Ltd. vs Creative Wares Ltd.
2012 Latest Caselaw 4359 Del

i-5

*              IN THE HIGH COURT OF DELHI AT NEW DELHI

+                              CS(OS)No.738/2002

%                                                                24th July, 2012

         SCJ PLASTICS LTD.                                ..... Plaintiff
                        Through:         Mr. Pankaj Chaudhary, Adv.

                      versus


         CREATIVE WARES LTD. C+                   ..... Defendant
                      Through: Mr. K.Datta with
                                Mr. Manish Srivastava, Advs.
         CORAM:
         HON'BLE MR. JUSTICE VALMIKI J. MEHTA


    To be referred to the Reporter or not?      YES


VALMIKI J. MEHTA, J (ORAL)

IA No.20050/2011(u/O.12 R.6 CPC)

1.

This is an application filed by the plaintiff for decreeing the suit

under Order 12 Rule 6 CPC on account of admissions made by the defendant

in judicial proceedings viz before the Board for Industrial and Financial

Reconstruction (BIFR) categorically bringing out that the debts/amounts are

payable to the plaintiff and which are the subject matter of the present suit.

2. The facts of the case are that the plaintiff filed the subject suit for

recovery of Rs.36,06,238/- being the principal amount and interest payable

thereon with effect from 1.4.2002. The amount is claimed to be due with

respect to goods sold by the plaintiff to the defendant namely "Master

Batches", being raw material which is used for preparing packaging material.

3. The defendant-company became sick and therefore it was

registered as a sick company under the relevant provisions of the Sick

Industrial Companies (Special Provision) Act, 1985. It is in these proceedings

that the defendant-company made categorical admissions of the amount which

was payable to the plaintiff in the present suit, and therefore, the present

application has been filed making the following averments in paras 2(e) to

2(g) as under:-

"2(e) That on receipt of summons of the present suit, the defendant moved an application under Section 22 of SICA, seeking stay of proceedings of the present suit, stating that the defendant company, vide reference no.47/2001, has approached the BIFR for declaration of the defendant company as a sick company;

(f) That on 25.3.2004 and vide diary no.5972, the defendant voluntarily filed in the present suit, the list of documents i.e.

1. Record of proceedings of the hearing held on 14.11.2003 before the BIFR in case no.47 of 2001 (pages 1 to 11); 2. List of sundry creditors of the defendant as on 30.9.2001 (pages 12 to 16), which is signed by the company secretary of the defendant; and 3. Audited balance sheet and profit and loss

account of the defendant-company as on 30.9.2001 (pages 17-

40)."

(g) That at page 15 of the said list of documents filed by the defendant in the present suit vide diary no.5972 on 25.3.2004, there is a clear, unequivocal, unconditional, unambiguous and positive admission by the defendant "that as on 30.9.2001, the defendant has to pay to the plaintiff a principal balance payment of `23,81,613.80 (`twenty three lacs eighty one thousand six hundred thirteen and paise eighty only)." Whereas as per plaintiff, even as on date and against the supply of goods by the plaintiff to the defendant vide said bills, as detailed in para 5 of the plaint, a balance payment of `23,85,077/- is still due from the defendant to the plaintiff. Thus, there is a nominal difference of `3,463.20 (` three thousand four hundred sixty three and paise twenty only) in the principal balance payment claimed by the plaintiff from the defendant and admitted by the defendant in their list of creditors as on 30.9.2001. Thus, plaintiff hereby waives the said nominal difference of `3,463.20 (` three thousand four hundred sixty three and paise twenty only) in order to settle the present case as per admission by the defendant."

4. The defendant has today filed its reply in Court. A reading of the

relevant paras of the reply shows that it could not be disputed that such a

categorical admission was made in the BIFR proceedings and which itself was

as per the records/books of accounts of the defendant . The relevant portions

of the reply read as under:

"e) & f) That the contents of paragraphs no. e) & f) need no specific response.

g) That the contents of paragraph no. g) are denied in toto as false, frivolous and misconceived. It is denied that at page 15

of the said list of documents filed by the defendant in the present suit, there is clear, unequivocal, unconditional, unambiguous or positive admission by the defendant as alleged. It is categorically denied that the defendant has admitted that as on 30.9.2001 the defendant has to pay to the plaintiff a principal balance payment of `23,81,613.80 as alleged. The plaintiff has illegally imputed words that do not even exist. It is again denied that an alleged balance amount of `23,85,077/- is still due from the defendant to the plaintiff. It is categorically denied that there is admission of any amount in the list of creditors as on 30.9.2001. As such there in no question of settling the present case on alleged basis of admission by the defendant."

5. The aforesaid denial is no denial of the factum that in fact in

judicial proceedings being the BIFR proceedings, there was categorical

admission of liability to be paid by the defendant to the plaintiff of an amount

of Rs.23,81,613.80 as on 30.9.2001, and which admission is based on the

books of accounts of the defendant. That the plaintiff is shown in the list of

creditors of the defendant has not and could not be denied in the reply to this

application under Order 12 Rule 6 CPC. A general denial is no denial in the

eye of law. If the defendant was stating allegedly the correct facts it would

have filed the list of creditors and the books of accounts in this Court and

which have not been filed for obvious reason that the same admit amounts due

towards the plaintiff.

6. As per the judgment of the Supreme Court in the case of Union

Bank of India vs. Uttam Singh Duggal & Company, 2000 (7) SCC 120, it

has been held that a decree on admissions can be passed even with reference

to pleadings in an application under Order 12 Rule 6 CPC, and which

pleadings of application under Order 12 Rule 6 CPC falls within the meaning

of expression "pleadings or otherwise" as appearing under Order 12 Rule 6

CPC. It is now settled law that judicial admissions are placed at a higher

pedestal than evidentiary admissions, and admissions made in judicial

proceedings can themselves be the basis of grant of the relief vide para 27 of

the judgment of the Supreme Court in the case of Nagindas Ramdas v.

Dalpatram Iccharam alias Brijram and Anr. (1974) I SCC 242 which reads

as under:-

27. From a conspectus of the cases cited at the bar, the principle that emerges is, that if as the time of the passing of the decree, there was some material before the Court, on the basis of which, the Court could be prima facie satisfied, about the existence of a statutory ground for eviction, it will be presumed that the Court was so satisfied and the decree for eviction though apparently passed on the basis of a compromise, would be valid. Such material may take the shape either of evidence recorded or produced in the case, or, it may partly or wholly be in the shape of an express or implied admission made in the compromise agreement, itself. Admissions, if true and clear, are by far the best proof of the facts admitted. Admissions in pleadings or judicial admissions, admissible under Section 58 of the Evidence Act, made

by the parties or their agents at or before the hearing of the case, stand on a higher footing than evidentiary admissions. The former class of admissions are fully binding on the party that makes them and constitute a waiver of proof. They by themselves can be made the foundation of the rights of the parties. On the other hand, evidentiary admissions which are receivable at the trial as evidence, are by themselves, not conclusive. They can be shown to the wrong." (underlining added)"

7. Object of Order 12 Rule 6 CPC is that in appropriate cases

litigations should not continue unnecessarily once it is found that there are

categorical admissions. Judicial process cannot be abused for delaying

passing of a decree in favour of a seller when the buyer categorically admits

the dues of the plaintiff in "pleadings or otherwise". In view of the categorical

admissions in BIFR proceedings, I find that merely because in written

statement there is a denial, and which denial of course is only for the sake of

convenience, I find that the present is a fit case for exercise of power under

Order 12 Rule 6 CPC inasmuch as the debt due to the plaintiff has been

admitted in „pleadings or otherwise‟ i.e. in judicial proceedings before BIFR. I

have also examined the written statement filed. In the written statement it is

not denied that defendant has purchased and received „Master Batches‟ from

the plaintiff and which is said to be for manufacturing

polystyrene/polypropylene disposable cups and glasses. The only dispute

raised in the written statement is the alleged inferior quality of the material,

however no particulars of any letter/letters written by the defendant to the

plaintiff rejecting the goods or objections to the same on account of alleged

inferior quality are mentioned. In terms of Section 42 of the Sale of Goods

Act, 1930, once the defendant has retained the goods without intimating to the

seller that it has rejected the goods, the goods are deemed to be accepted and

hence liability arises. Thus the defence of rejection in the written statement is

only a vague/inadequate device and hence by applying Order 8 Rule 5 CPC,

the contents of the plaint can also be deemed to be admitted as regards the

liability of the defendant.

8. In view of the above, the suit of the plaintiff is decreed for a sum

of Rs.23,81,613.80 alongwith interest at 9% per annum simple with effect

from 1.10.2001 till the date of filing of the suit and with the same rate of

interest pendente lite and future till payment. Parties are left to bear their own

costs. Decree sheet be prepared. The application is allowed and disposed of

and the suit decreed as stated above.

VALMIKI J. MEHTA, J JULY 24, 2012 ak