Coim India Pvt. Ltd. vs Kurt O John Shoe Components(I) ...
2013 Latest Caselaw 2859 Del

*       IN THE HIGH COURT OF DELHI AT NEW DELHI
16
+                         CS (OS) No. 855 of 2010

        COIM INDIA PVT LTD                                        ..... Plaintiff
                      Through:             Mr. Pankaj Chaudhary, Advocate

                               versus

        KURT O JOHN SHOE COMPONENTS(I) PVT
        LTD & ANR                               ..... Defendants
                      Through: Mr. Murari Kumar & Mr. Yakesh
                               Anand, Advocates

        CORAM: JUSTICE S. MURALIDHAR

                                 ORDER

% 09.07.2013

IA No. 2523 of 2011 [under Order XXXVII Rule 3(5) Code of Civil Procedure, 1908 for leave to defend]

1. This summary suit has been filed by the Plaintiff under Order XXXVII of

the Code of Civil Procedure 1908 ('CPC') for recovery of a sum of Rs.

1,40,64,950 together with pendente lite and future simple interest @ 22%

p.a..

2. The case of the Plaintiff is that it has its registered office at Rajendra

Place, New Delhi. The orders placed by Defendant No.1 were received by

the Plaintiff at its office in New Delhi. Defendant No.2 is the Managing

Director and signatory of the cheques issued by Defendant No.1. Even prior

to 1st April 2007, the Plaintiff was supplying to Defendant No.1 several

items like polyol, isocyanate Urecom, etc. on 60 days' credit and subject to

the jurisdiction of the Delhi Courts. Orders from Defendant No.1 were

received and accepted by the Plaintiff at its office in New Delhi. Defendant

No.1 had been remitting the on account part payment by cheques to the

Plaintiff at the said registered office. The Plaintiff states that a confirmation

of accounts was duly signed by the authorised signatory of Defendant No.1,

Mr. Sanjay Swami, on 1st April 2007. This concerned the purchases of goods

by Defendant No.1 from the Plaintiff up to 1st April 2007.

3. In para 6 of the plaint, the details of the invoices from 6th April 2007 to

11th November 2008 for supply of goods by the Plaintiff to Defendant No.1

and the amount due against each of the invoice has been set out.

4. It is stated that Defendant No.1 has issued Sales Tax C-form in favour of

the Plaintiff, thus confirming the purchase of goods under the said invoices

from the Plaintiff. The Plaintiff has placed on record the originals of the

invoices containing endorsement on the reverse of the terms of payment, of

which one is that "interest @ 22% p.a. be charged in case of delay in

payment". It is also clearly mentioned that "all disputes are subject to the

jurisdiction of Delhi Courts only".

5. The Plaintiff has stated that Defendant No.1 had to pay it a total

outstanding sum of Rs. 1,84,99,624.54, after accounting for the sum

covered by the invoice for which C-form had been issued and for

which payment had been received. There was a balance payment of

Rs. 1,00,11,523.37 still due from Defendant No.1, which it had failed to do

despite repeated reminders and oral assurances. In para 10 of the plaint, it

is stated that as against the aforementioned balance amount, and as on

account, part payment of Rs. 37,35,462 had been offered for which

cheques had been issued with the assurance that the sum would be paid with

interest. The details of the cheques issued, date and amount have been set

out in para 10. Reliance is placed on a letter dated 7th February 2009 issued

by the authorised signatory of Defendant No.1 enclosing a cheque for

Rs.30,00,000 and assuring that it would pay Rs. 50,000 to Rs. 75,000 per

month against the outstanding payment and give an advance payment

against the materials purchased. It also undertook that the cheques which

had expired would be replaced. However, no such payment was made. It is

stated that when the said cheques, as detailed in para 10, were presented for

payment, they were returned dishonoured with the remarks "payment

stopped by the drawer". Separate complaints under Section 138 of the

Negotiable Instruments Act, 1881 have been instituted by the Plaintiff

against the Defendants. It is stated that in nine criminal complaints, an

assurance was given before the Court of the learned Metropolitan Magistrate

by learned counsel for the Defendants that they would settle those

complaints by making payment of the cheque amounts to the tune of

Rs.6,57,680. Accordingly, the Plaintiff has restricted its claims to the present

suit for recovery of Rs. 93,53,843, reserving its right to claim the further

sum of Rs. 6,57,680 in case the aforementioned payment is not made by the

Defendants.

6. In para 14, it is stated that on the balance sum of Rs. 93,53,843, the

Defendants are liable to pay Rs. 47,11,107 as interest @ 22% p.a. and that

the total sum works out to Rs. 1,40,64,950 on the date of the filing of the

suit.

7. In the application for leave to defend, it is stated by the Defendant that the

mere issuing of bills by the Plaintiff to the Defendant did not constitute a

written contract between the parties and therefore, the present suit under

Order XXXVII CPC is not maintainable. Secondly, it is submitted that the

suit is liable to be dismissed for want of territorial jurisdiction as no cause of

action has arisen in Delhi. The Defendant No. 2 does not reside in Delhi.

The office and works of Defendant No. 1 are situated in Noida, U.P. The

goods were supplied at Noida, U.P. Thirdly, it is submitted that there was no

basis of claim of pendente lite and future interest @ 22% per annum. Such

claim is not covered under Order XXXVII CPC. In any event the above

issues are all triable issue for which evidence has to be led. Lastly, it is

pointed out that the Plaintiff has made contradictory statements in the plaint

regarding the amount due.

8. Learned counsel for the Defendants adds that the sum total of all the

invoices, sales tax forms 'C' works out the amount Rs. 83 lakhs and there is

no evidence of the Defendants owing the Plaintiff the sum as claimed in the

plaint. It is pointed out that the Plaintiff has admitted that the Defendants

had paid Rs. 84,88,101 towards the goods supplied by the Plaintiff. It is

stated that after filing of the suit, the Defendant No. 1 has paid a sum of

Rs. 7,50,000 towards the settlement of nine complaint cases filed under

Section 138 of the Negotiable Instrument Act ('NI Act'). The amount as

claimed in the plaint is stated to be incorrect. Reliance is placed on the

decisions in Mechalec Engineers & Manufacturing v. Basic Equipments

AIR 1977 SC 577 and Raj Duggal v. Ramesh Bansal AIR 1990 SC 2218.

Learned counsel for the Defendants states that the Defendants are not in a

good financial condition and will not be in a position to satisfy the terms that

may be imposed for grant of a conditional leave to defend.

9. In reply to the application, the Plaintiff has pointed out inter alia that after

filing of the suit, Defendants had paid to the Plaintiff a sum of Rs.

6,57,680 and not Rs. 7,50,000 as incorrectly stated by the Defendants. It is

stated that even on the date of filing of the reply, i.e., 5th September 2011 the

Defendants owed Rs. 93,53,843 besides interest and costs. It is reiterated

that a separate complaint under Section 138 NI Act filed against the

Defendants in respect of the dishonoured cheque dated 20th August 2009 for

Rs. 30 lakhs is pending. It is denied that the Plaintiff accepted any cheque

towards security. It is pointed out that initially a cheque dated 20th August

2009 for Rs. 30 lakhs was issued against the already dishonoured cheque

dated 30th June 2008 for Rs. 30 lakhs and in response to the legal notice

dated 24th January 2009 issued to Defendants under Section 138 NI Act. The

said cheque for Rs. 30 lakhs was issued by the Defendants to the Plaintiff

towards part payment of goods already purchased by the Defendants and not

as any security as falsely and dishonestly alleged by the Defendants.

10. It appears to this Court that the defence set up by the Defendant is

nothing but moonshine. Copies of the invoices raised by the Plaintiff on the

Defendant towards supply of goods have been filed in the original. The

reverse of each invoice states that "all disputes are subject to the jurisdiction

of Delhi Courts only".

11. As regards the issue of jurisdiction the plaint sets out the series of events

which show that part of the cause of action arose in Delhi. Clearly the order

was placed in New Delhi and payment had been made in Delhi. There is no

merit in this contention. The Defendants have been unable to show that it

has at any point in time denied its liability to make payment to the Plaintiff

for the goods supplied to it by the Plaintiff. Indeed, the cheque of Rs. 30

lakhs appears to have been issued by the Defendants not once but twice.

Consequently, therefore, these could not have been issued to the Plaintiff by

way of security.

12. The Court is satisfied that the Plaintiff has been able to demonstrate that

in the absence of a specific denial by the Defendants, the Defendants owe

the Plaintiff a sum of Rs. 93,53,843. The rate of interest is also clearly

specified on the reverse of each invoice. The Court is of the view that the

Defendants have failed to raise any triable issue as such. The Plaintiff has

successfully demonstrated that the Defendants owes the Plaintiff a sum of

Rs. 93,53,842 together with pendente lite and future simple interest @ 22%

per annum from the date of each invoice/bill till the date of payment of the

amount against such invoices.

13. IA No. 2253 of 2011 filed by the Defendants for leave to defend is

accordingly dismissed. The defence of Defendants is struck off. The suit is

decreed as prayed for by the Plaintiff with costs of Rs. 20,000.

14. Decree sheet be drawn up accordingly.

S.MURALIDHAR, J JULY 09, 2013 Tp/rk