M/S. Ttk Prestige Ltd. vs M/S. India Bulls Retail Services ...
2013 Latest Caselaw 1565 Del

*      IN THE HIGH COURT OF DELHI AT NEW DELHI

                                           Date of decision: 8th April, 2013.

+            CS(OS) 631/2010 & I.A. No.13606/2011 (u/O 37 R-3 CPC)

       M/S. TTK PRESTIGE LTD.                       ..... Plaintiff
                     Through: Ms. Vasudha Arya, Ms. Samridhi
                              Chawla and Rajesh Sharma,
                              Advocates.

                                  Versus

       M/S. INDIA BULLS RETAIL SERVICES LTD.       ..... Defendant
                     Through: Mr. Chetan Sharma, Sr. Adv. with
                              Mr. Ankit Shah and Mr. Arnar
                              Kumar, Advocates.
       CORAM:
       HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW

                           JUDGMENT

% 08.04.2013 I.A. No.4674/2012 (of defendants for leave to defend)

1. The plaintiff has instituted this suit under Order XXXVII of Civil

Procedure Code, 1908 for recovery of Rs.20,52,551.78 with pendente lite

and future interest at 24% per annum pleading:

(i) that the plaintiff, as per the orders placed by the defendant on

the plaintiff, sold/supplied and delivered pressure cookers, pressure

pans, non-stick cook wares, appliances and other kitchen utensils

manufactured by the plaintiff to the defendant through its various

branch offices and the defendant had acknowledged the receipt of the

same; the acknowledged copies of the invoices vide which the sales

were made, are filed as annexures B-1 to B-7 to the plaint;

(ii) that the defendant has made partial payments only, leaving a

balance principal sum of Rs.14,77,761.81 due to the plaintiff. The

plaintiff, in para 6 of the plaint, has given the particulars of the

invoices/delivery/challans raised on the defendant and as per which:

(a) a sum of Rs.2,09,972.30 is due under the three invoices

total amount for the goods delivered at Ludhiana, Punjab Brach

of the defendant;

(b) a sum of Rs.82,846/- is due out of the invoice for

Rs.1,78,638.87 for the goods delivered at Jaipur, Rajasthan

branch of the defendant;

(c) a sum of Rs.1,20,520.86 is due out of the invoices for the

total amount of Rs.1,46,742.96 for the goods delivered at

Ahmedabad branch of the defendant;

(d) a sum of Rs.1,44,310.96 is due towards the total value of

the invoices for the goods delivered at another branch at

Ahmedabad of the defendant;

(e) a sum of Rs.4,69,735.61 is due towards the total value of

the invoices for the goods delivered at Pune branch of the

defendant;

(f) a sum of Rs.2,28,194.68 is due towards the total value of

the invoices for the goods delivered at Shahdara, New Delhi

branch of the defendant;

(g) a sum of Rs.2,22,181.70 is due towards the total value of

the invoices for the goods delivered at Shalimar Bagh, New

Delhi branch of the defendant.

(iii) that the amount of the said invoices was agreed to be paid

within 30 days from the date of the invoices and the defendant had

agreed to interest @ 24% per annum on over-due bills;

(iv) that a sum of Rs.5,74,789.97 (Rs.20,52,551.78 -

Rs.14,77,761.81) is due towards interest till the date of institution of

the suit.

2. Summons for appearance and thereafter summons for judgment were

delivered on the defendant. The defendant has sought leave to defend on

the following grounds:

(a) that the plaintiff has based it claim on its own ledger entries,

without showing any admission of the defendant towards any

liability;

(b) that the defendant, as per the Procurement Orders placed on the

plaintiff, was entitled to raise credit notes/memos on the plaintiff

towards insufficient/wrong supply;

(c) that the plaintiff is to debit the credit notes/memos raised by the

defendant from the outstanding payment due;

(d) that the plaintiff has failed to take the credit notes/memos into

consideration and since at different points of time credit notes/memos

were raised, there can be no case of proper supply of goods;

(e) that the defendant disputes any liability to the plaintiff;

       (f)     that the suit is barred by limitation;

       (g)     that there are instances of short supply, return of goods,

substandard goods supply, non billing, wrong billing etc. on the part

of the plaintiff;

(h) that all payments for the goods supplied have already been

made;

(i) that in the retail trade there is a process of reconciliation which

is usually carried out at the end of each month; assuming that any

amount at all is due to the plaintiff, the same can only be quantified

after the process of reconciliation is carried out by the defendant;

(j) that the plaintiff has failed to specify the invoices against which

the amount remains outstanding;

(k) that the plaintiff has not pleaded any written contract which is a

sine qua non for an action under Order XXXVII of CPC;

(l) that the instant suit would require detailed examination of

documents;

(m) that no rate of interest for outstanding payment has been agreed

to between the parties in any document.

3. The senior counsel for the defendant and the counsel for the plaintiff

have been heard.

4. The senior counsel for the defendant has at the outset drawn attention

to the invoices annexures B-1 to B-7 on which the suit is based and has

shown the same to be pertaining to supplies made at Ludhiana, Jaipur,

Ahmedabad, Pune and Delhi and containing the following clause:

"in case of dispute _______ Court will have jurisdiction"

and referring to the Court of the place where the supplies were made. It is

thus argued that this Court would have jurisdiction only qua the amount

claimed for the goods supplied at Delhi. It is further argued that the suit is

based on a unilateral claim of the plaintiff and without any admission

thereof by the defendant. Upon attention of the senior counsel for the

defendant being drawn to the stamp which each of the invoices bears of

„Piramyd Retail Ltd.‟, of receipt of the goods to which invoices pertain and

it being enquired as to why the said stamp of „Piramyd Retail Ltd.‟ (of

which the defendant is the successor) do not amount to admission of receipt

of goods of the value mentioned therein, the senior counsel for the

defendant draws attention to the clause "subject to verification and

checking" which each of the said stamps contain. It has however been

enquired from the senior counsel as to whether upon verification and

checking any discrepancy in the goods received under the said invoices was

pointed out. The senior counsel fairly states that he has no instructions.

Needless to state that there is no plea in the leave to defend application, of

any protest against the invoices, after verification and checking, having been

lodged and neither any particulars thereof given nor any document by which

such protest many have been made, filed.

5. As far as the argument, of the suit being not maintainable under Order

XXXVII of CPC because of the same being not based on the written

contract is concerned, this Court in Punjab Pen House Vs. Samrat Bicycles

Limited AIR 1992 Del. 1, Corporate Voice Private Limited Vs. Uniroll

Leather India Limited (1995) 60 DLT 321, Beacon Electronics Vs.

Sylvania and Laxman Limited (1998) 45 DRJ 439 and M/s. KIG Systel

Limited Vs. Fujitsu ICIM Ltd. AIR 2001 Del. 357 has held such invoices

duly acknowledged by the defendant to be forming a written contract within

the contemplation of Order XXXVII of CPC. The defendant, in the face of

the written contract acknowledging the receipt of the goods of the value

mentioned in each invoice, was required to specifically plead that upon

verification and checking the goods were not found to be as mentioned in

the said invoice and were rejected. No such plea has been taken. A general

plea, of the defendant being entitled to and having raised credit

notes/memos for the defects/short supply/delay in supply etc, without even

giving the particulars of the said credit notes/memos and without filing the

copies of the said credit notes/memos before this Court, does not amount to

disclosing a substantial defence to the claim for recovery of amounts due

under the said invoices and such vague and general plea has to be held to be

a moonshine and vexatious.

6. Faced therewith, the senior counsel for the defendant states that in

fact reconciliation of accounts is underway at the end of the defendant and

till now a sum of approximately Rs.4.40 lakhs has been found to be due to

the plaintiff and the defendant is agreeable to deposit the principal suit

amount in this Court as a condition for grant of leave to defend.

7. The defendant in a suit under Order XXXVII of CPC cannot so lure

the Court into granting leave to defend, if otherwise no ground therefor is

made out.

8. The only real ground for leave to defend, as far as the claim for

principal amount is concerned, which survives is the objection as to the

territorial jurisdiction of this Court. The senior counsel for the defendant in

that regard has also contended that the claim for supplies made at Delhi is

only of Rs.2,28,194.68 and Rs.2,22,181.70 i.e. total Rs.4,50,376.38 which

will be below the minimum pecuniary jurisdiction of this Court and the suit

will have to be transferred to the Court of appropriate pecuniary jurisdiction.

9. Attention of the senior counsel for the defendant is again invited to

the clause quoted supra qua jurisdiction which is does not mention the

words such as „exclusively‟ or „only‟ and it has been enquired whether the

same can restrict the right of the plaintiff to only approach the Court

mentioned in the respective invoices inasmuch as else this Court where the

registered office of the defendant is situated, it is not controverted, has

territorial jurisdiction. No answer has been forthcoming.

10. The Supreme Court in Hanil Era Textiles Ltd. Vs. Puromatic Filters

(P) Ltd. (2004) 4 SCC 671 was concerned with such clauses and has held

that it is pertinent to see whether there is ouster of jurisdiction of other

Courts; that where words like "alone", "only", "exclusive" and the like have

been issued, there may be no difficulties; even in the absence of such words

an agreement of exclusive jurisdiction if otherwise evidenced from the

intention of the parties can be deciphered. I am however in the facts of the

present case unable to decipher any such agreement between the parties to

the exclusive jurisdiction of the Courts mentioned in the respective invoices.

The plaintiff, under the arrangement with the defendant, was making

delivery of goods for sale at retail outlets of the defendant in the various

cities. The clause qua jurisdiction appears to be more enabling than

restrictive. When the parties agree to sale and supply of goods at various

destinations, in the absence of the words „only‟ or „exclusively‟, „alone‟ the

parties cannot be presumed to have agreed to the jurisdiction only of the

Courts at the place of supply inasmuch as that is likely to result in an

anomalous situation. The clauses in the invoices rather appear to be with

the motive that if the disputes were only with respect to the supply of goods

at one jurisdiction, to enable the institution of the proceedings in that

jurisdiction and not to, when the disputes relate to supplies at numerous

places as has happened, requiring the parties to on identical disputes, fight

in different Courts. The Policy of India is not to encourage multiplicity of

litigation and the conduct of the parties is to be deciphered in accordance

with the said Public Policy only.

11. Though the defendant has pleaded and the senior counsel for the

defendant has also argued that there is no agreement as to the rate of interest

but all the invoices duly acknowledged by the defendant are found to

contain the following clause:

"interest at 24% per annum will be levied for payment over 30 days".

The transaction between the parties being commercial and the parties

being large corporate houses with their open eyes having agreed to the said

terms and conditions, I am not inclined to interfere with the said agreement

at least for the pre-institution period. However, interest pendente lite and

future is restricted to @ 10% per annum being the average rate of interest

offered by Nationalized Banks on fixed deposits during the said time.

12. It may be recorded that the senior counsel for the defendant has not

addressed arguments on any of the other pleas in the application for leave to

defend and hence need is not felt to deal therewith. Even otherwise, the suit

claim is found to be within the period of limitation as all the invoices are of

the year 2008 and the suit was instituted in the year 2010.

13. It may also be recorded that as far as the suit for recovery of the price

of goods supplied at Jaipur and Parimal Garden, Ahmedabad is concerned, it

is not for the full amount of invoices raised for supplies at the said

destinations but for the balance thereon. The invoices of the total value

stand acknowledged as aforesaid by the defendant. The plaintiff itself is

admitting receipt of part of the price of the invoices and has made a claim

for the balance only. The defendant has not pleaded that the balance due is

anything other than as pleaded by the plaintiff. Thus, the said claim is also

found to be within the ambit of Order XXXVII of CPC.

14. The leave to defend application of the defendant is thus not found to

be indicating that the defendant has a substantial defence to raise and rather

the application for leave to defend and the argument is indicative of the

defence put up being frivolous and vexatious.

15. Accordingly, the application for leave to defend is dismissed.

16. Axiomatically, the suit of the plaintiff for recovery of

Rs.20,52,551.78 with interest @ 10% per annum on Rs.14,77,761.81 from

the date of institution of the suit till the date of payment is decreed in favour

of the plaintiff and against the defendant. The plaintiff shall also be entitled

to costs of the suit as per schedule.

Decree sheet be drawn up.

RAJIV SAHAI ENDLAW, J APRIL 08, 2013 bs..