Delhi High Court

M/S Hi-Tech Pipes Limited vs M/S Pioneer Fabricators Pvt Ltd ... on 17 October, 2012

Author: Hima Kohli

*         IN THE HIGH COURT OF DELHI AT NEW DELHI

+                       CS(OS) 1824/2011

                                   Date of Decision: 17th October, 2012

     IN THE MATTER OF
     M/S HI-TECH PIPES LIMITED                              . Plaintiff

                        Through:   Mr. Bhuvan Gugnani and Mr. Rahul
                                   Sharma, Advocates

                   versus

     M/S PIONEER FABRICATORS PVT LTD AND ANOTHER . Defendants

                        Through:   Mr. Vibhor Verdhan, Advocate

CORAM
HON'BLE MS.JUSTICE HIMA KOHLI

HIMA KOHLI, J. (Oral)

1. The plaintiff has filed the present summary suit against the

defendants for recovery of a sum of Rs.40,00,000/-.

2. Before dealing with the merits of the case, some dates and events

that are relevant for consideration are taken note of. On 29.7.2011,

notice was issued to the defendants under the prescribed proforma,

returnable for 30.09.2011. Appearance was entered on behalf of the

defendants on 30.09.2011 on which date, the learned Joint Registrar had

observed that only a Vakalatnama had been filed on their behalf and that

no memo of appearance was filed. As a result, matter was placed before

the Court on 01.11.2011. On 01.11.2011, counsel for the defendants

had submitted that summons for judgment may be served upon the

defendant at the address of the counsel as given in the Vakalatnama

which may be treated as a memo of appearance. As counsel for the

plaintiff had no objection to the aforesaid suggestion, time was sought by

him to file summons for judgment and the case was adjourned to

21.12.2011.

3. In the meantime, the plaintiff filed an application for issuance of

summons for judgment to the defendants, registered as I.A. No.

17951/2011. On 15.11.2011, notice was issued on the aforesaid

application. On 21.12.2011, the date fixed before the Court, counsel for

the defendants had submitted that he had filed an application for leave to

defend on 12.12.2011. But the same was not found to be on record.

Counsel for the plaintiff had also submitted that he had not received a

copy thereof. The suit was then posted for 23.04.2012.

4. On 23.04.2012, counsel for the parties stated that they had arrived

at an amicable settlement and a Tripartite Agreement dated 19.4.2012

was executed between the plaintiff, the defendant and M/s KMC

Construction Ltd., a customer of the defendant who had agreed to pay the

amounts payable by the defendant, directly to the plaintiff. At the

request of counsels for the parties who had jointly sought some time to

move an appropriate application in this regard, the matter was adjourned

to 03.05.2012. On 03.05.2012, at the request of the counsel for the

plaintiff, the matter was adjourned to 30.05.2012. In the meantime, an

application was filed by the plaintiff under Order 1 Rule 10 CPC,

registered as IA No.8758/2012 seeking to implead M/s KMC Construction

Ltd. The said application was listed before the Joint Registrar on two

dates, i.e., 2.7.2012 and 18.9.2012 and finally, the matter was placed

before the Court for 17.10.2012.

5. Today, learned counsel for the plaintiff states that as the counsel for

the defendants has failed to remove the objections and re-file its leave to

defend application and nor has a copy thereof been furnished to him till

date, the present suit is liable to be decreed right away.

6. Learned counsel for the defendants submits that his client

remained under a bonafide impression that after the parties had arrived

at a settlement as recorded in the Tripartite Agreement dated 19.4.2012,

whereunder M/s KMC Construction Ltd. had issued cheques worth Rs. 38

lacs in favour of the plaintiff to liquidate the liabilities of the defendants,

the present case stood amicably resolved and, therefore, he did not take

any steps to re-file the leave to defend application. He submits that if an

adjournment is granted today, he shall take steps to re-file the said

application and furnish a copy thereof to the other side.

7. It is relevant to note that pursuant to the plaintiff and the defendants

arriving at a Tripartite Agreement alongwith M/s KMC Construction Ltd. on

19.04.2012, the third party had agreed to pay directly to the plaintiff, a

sum of Rs. 38 lacs for & on behalf of the defendants and it had issued

three post dated cheques totaling to Rs. 38 lacs in full and final

settlement of the claims of the plaintiff. Learned counsel for the plaintiff

hands over the original Tripartite Agreement, which is taken on record.

He points out that when the first cheque dated 10.5.2012 for Rs. 15 lacs

was presented, the same was duly encashed, but when the remaining two

cheques dated 18.5.2012 and 28.5.2012 for Rs. 15 lacs and Rs. 8 lacs

respectively were presented, both were dishonoured on account of

insufficient funds. He therefore submits that the defendants are very well

aware of the aforesaid turn of events and they ought to have taken

necessary steps to either approach M/s KMC Construction Ltd. with a

request to it to abide by its undertaking as recorded in the Tripartite

Agreement or they ought to have approached the plaintiff directly with

the balance sum of Rs.23 lacs payable under the Tripartite Agreement.

But having failed to take either of the aforesaid steps, the defendants

ought to have instructed their counsel to re-file the leave to defend

application and be prepared to address arguments thereon.

8. There is merit in the aforesaid submission made by learned counsel

for the plaintiff. If the intention of the defendants was bonafide, they

ought to have pursued the matter with M/s KMC Construction Ltd., a

party that was introduced by them to the plaintiff as their customer and

one who had agreed to discharge their liability by offering to pay a sum of

Rs. 38 lacs to the plaintiff through three post dated cheques. Further, it

is relevant to note that the last two post dated cheques for Rs.15 lacs

and Rs.8 lacs were issued by M/s KMC Construction Ltd. in the month of

May, 2012 and, therefore, there was ample time for the defendants to

have shown due diligence by following up the matter with its customer

and verify as to whether the said cheques had actually been honoured on

being presented by the plaintiff for encashment so that their liability stood

completely discharged under the Tripartite Agreement. However, no such

steps were taken by the defendants from May 2012, till date.

9. In the aforesaid facts and circumstances, it does not lie in the

mouth of the defendants to claim that they did not re-file the leave to

defend application as they had remained under an impression that the

dispute between the parties had been amicably settled under the

Tripartite Agreement. Moreover, on 18.9.2012, the date fixed before the

Joint Registrar, it was mentioned in the order that despite service of

summons of judgment, the defendants had not filed the leave to defend

application. Thus ample opportunity was available to the defendants to

have taken necessary steps to re-file their leave to defend application. As

a result, the Court is not inclined to grant any further indulgence to the

counsel for the defendants who seeks an adjournment to re-file the said

application.

10. As the defendants have failed to re-file the leave to defend

application knowing very well the consequences thereof, the Court is

constrained to hold that the averments made in the plaint have remained

un-rebutted and are deemed to be admitted by them. Consequently, the

present suit has to be decided on the basis of the averments that have

been made in the plaint.

11. It is the case of the plaintiff company that it is in the business of

manufacturing, trading and selling various types of pipes and the

defendants use to purchase their goods from time to time on cash and

credit basis. The plaintiff had opened an open, mutual and running

account in its books of accounts in the name of the defendant No.1 that

was maintained in the ordinary course of business. True copies of the

ledger account of the defendants maintained by the plaintiff for the period

from 01.04.2008 to 31.03.2009 and from 01.04.2009 to 31.05.2009 have

been filed alongwith the list of documents. As per the aforesaid ledger

account maintained by the plaintiff, as on 07.04.2011 the defendant No.1

was liable to pay a sum of Rs. 37,94,355/- to the plaintiff. In support of

the aforesaid statement of account of the defendant No.1 company

maintained by the plaintiff company, it has filed forty three original

invoices raised by it on the defendant No.1 company for the period with

effect from 24/12/2008 to 16.07/2010. Apart from the above, the

plaintiff company has also filed its Memo of Articles of Association and a

certified true copy of the resolution dated 4.6.2011, adopted by the Board

of Directors of the plaintiff company authorizing Mr. Pradeep Aggarwal,

working as General Manager (Finance) in the company to institute and

prosecute the present suit on its behalf.

12. It is averred in the plaint that despite repeated reminders that were

issued by the plaintiff company to the defendants, they have failed to

clear the aforesaid outstanding amount of Rs.37,94,355/- and finally,

after making persistent demands, the defendants had agreed to pay a

round sum of Rs. 40 lacs to the plaintiff which figure included the interest

component. Thereafter, the defendants issued four cheques in favour of

the plaintiff as per the details given hereinbelow:-

      S.No. Cheque No.               Dated             Amount

      1.    099015                   14.02.2011        Rs. 10,00,000/-

      2.    099016                   05.04.2011        Rs. 10,00,000/-

      3.    099017                   05.04.2011        Rs. 10,00,000/-

      4.    099018                   05.04.2011        Rs. 10,00,000/-

13. When the plaintiff company presented the aforesaid four cheques

for encashment, they were returned by the bankers of the defendant No.1

with the remarks, "PAYMENT STOPPED BY THE DRAWER". All the four

dishonoured cheques alongwith the return memos forwarded by State

Bank of India, the bankers of the defendants, have been filed by the

plaintiff alongwith the list of documents.

14. After the plaintiff found that the all aforesaid cheques were

dishonoured, it issued a legal notice dated 25.04.2011 to the defendant

demanding payment of Rs.40,00,000/- with interest @ 24% p.a. The said

notice was dispatched to the defendants by three modes, i.e., by speed

post, courier and by registered A.D post. Although the aforesaid legal

notice was duly received by the defendants, they did not bother to