M/S B.T.M Exports Ltd. vs M/S Adhunik Corporation Ltd
2014 Latest Caselaw 1908 Del

*      IN THE HIGH COURT OF DELHI AT NEW DELHI

                                          Date of decision: 16th April, 2014.

+          CS(OS) 2940/2011 & IA No.18865/2011 (u/O 39 R-1&2 CPC)

       M/S B.T.M EXPORTS LTD.                     ..... Plaintiff
                     Through: Mr. Rajiv Dutta, Sr. Adv. with
                              Mr.Siddharth Dutta, Mr. Kumar
                              Dushyant Singh & Ms. Deepali
                              Diwedi, Advs.
                                    Versus
    M/S ADHUNIK CORPORATION LTD.             ..... Defendant
                  Through: Mr. Vijay Gupta with Ms. Smriti
                           Sinha, Advs.
CORAM:
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW

IA No.1608/2012 (of the plaintiff for issuance of summons for
judgment).

1.

Summons for judgment already stand issued and leave to defend

application is ripe for hearing.

2. This application has exhausted itself and is disposed of.

IA No.5150/2012 (of the defendant for leave to defend).

3. The counsels have been heard.

4. The plaintiff in this suit under Order 37 of the CPC seeks recovery of

Rs.1,40,00,000/- paid by the plaintiff to the defendant as advance for supply

by the defendant to the plaintiff of six rakes in the month of February, 2010;

the defendant was registered with the Indian Railways under the Wagon

Investment Scheme (WIS) and was entitled to six rakes every month during

the relevant period, for transportation from Deojhar Railway Siding to

Vizag Port. It is the case of the plaintiff that though the defendant received

the advance but failed to provide the aforesaid six rakes to the plaintiff and

the plaintiff is thus entitled to refund of the said amount together with

interest, pendente lite and future at 24% per annum.

5. The suit was entertained under Order 37 and summons for appearance

and upon the defendant entering appearance summons of judgment were

issued to the defendant and the defendant has sought leave to defend.

6. The first contention of the counsel for the defendant is that the suit is

not maintainable under Order 37 of the CPC. The counsel for the defendant

has argued that in the documents under which the defendant admittedly

received the sum of Rs.1,40,00,000/- from the plaintiff as advance

consideration for the supply of rakes, it is nowhere provided that the

defendant would in any eventuality refund the said amount to the plaintiff. It

is thus argued that the suit cannot be tried under Order 37 of the CPC.

7. Prima facie finding merit in the aforesaid contention, the senior

counsel for the plaintiff has been asked to explain as to how the suit is so

maintainable. Attention of the senior counsel for the plaintiff is invited to

the dicta of this Court in Syed Moosa Emami Vs. Sunil Kumar AIR 1982

Delhi 590 laying down that a suit for recovery by the plaintiff of monies

advanced by the plaintiff to the defendant by cheque is not maintainable

under Order 37 of the CPC.

8. The senior counsel for the plaintiff has invited attention to the e-mail

dated 26th January, 2010 from the defendant to the plaintiff whereby the

defendant offered to the plaintiff its WIS for the month of February and

March, 2010 comprising of six rakes in a period of one month @550 per

MT.

9. The senior counsel for the plaintiff has next invited attention to the

invoice dated 27th January, 2010 raised by the defendant on the plaintiff

towards charges for supply of six numbers of empty Railway Rakes from

Deojhar Railway siding during the month of February, 2010 in the total sum

of Rs.1,30,51,500/- plus taxes i.e. for a total sum of Rs.1,43,95,805/-.

10. The senior counsel for the plaintiff has next invited attention to the

Statement of Account of the plaintiff with the Bank of India, New Delhi

showing RTGS transfer on 27th January, 2010 in the sum of

Rs.1,40,00,000/- to the defendant.

11. The senior counsel for the plaintiff has next invited attention to the

e-mail dated 31st March, 2010 of the plaintiff to the defendant demanding

refund of Rs.1,40,00,000/- since the defendant had not honoured the

agreement and the bargain stood cancelled. It is argued that numerous

reminders were sent thereafter but the defendant did not refund the amount.

12. Attention is invited to:-

(i) Order 37 Rule 1 (2)(b)(i) to contend that the aforesaid

documents constitute written contract and the suit is for

recovery of a liquidated demand in money due from the

defendant to the plaintiff thereunder; and,

(ii) reliance is placed on Lohmann Rausher Gmbh Vs.

Medisphere Marketing Pvt. Ltd. 117 (2004) DLT 95 and on

Iup Jindal Metals & Alloys Ltd. Vs. M/s. Conee Chains

Private Ltd. MANU/DE/2630/2013 to contend that the suit on

the basis of invoices is maintainable under Order 37 of the

CPC.

13. Before proceeding to discuss the aforesaid aspect, the other

arguments of the counsel for the defendant may be noticed.

14. It is the contention of the counsel for the defendant that the defendant

is not in breach of the agreement and though the defendant had made the

rakes available to the plaintiff but the plaintiff, for the reason of having not

completed the documentation and which the plaintiff was liable to complete,

did not avail of the same; that rather it is the defendant who has suffered the

loss by non-utilization of the said rakes and the defendant is thus not liable

to refund the monies to the plaintiff.

15. The senior counsel for the plaintiff in this regard has contended that

the defendant under the WIS could not have sublet the rakes and received

the advance from the plaintiff by misrepresenting that the defendant could

so sublet the rakes. It is stated that the plaintiff has also filed a complaint

against the defendant and its officers / directors of the offences of cheating

and in which they have been granted bail subject to the condition of

payment of Rs.70,00,000/- and which has been paid.

16. Upon being asked to show the plea to the said effect in the plaint, the

senior counsel for the plaintiff has invited attention to para 17 of the plaint

where it is pleaded that the rakes under the WIS were for the personal use of

the defendant only and could not have been sublet by the defendant for any

other purpose.

17. Though the defendant in the application for leave to defend is not

found to have controverted the contents of para 17 of the plaint but it is

otherwise the plea of the defendant in the leave to defend application that

the defendant was ready and willing to perform its part of the agreement

with the plaintiff and the breach was on the part of the plaintiff in, while

submitting the documents to the Railways, showing the plaintiff instead of

the defendant as consignor. During the hearing, a copy of the letter dated

10th September, 2012 of the South Eastern Railways in response to an RTI

query is handed over where it is inter alia replied that while consignor of

WIS has to be the WIS customer, the consignee can be anyone at the

approved destination. The counsel for the defendant controverts that there is

any prohibition in the WIS against subletting. It is further contended that the

question of making any false representation or cheating did not arise as the

plaintiff is regularly availing of such rakes and is fully in the knowledge of

the working thereof.

18. However neither counsel has placed before this Court any copy of the

WIS to show whether subletting of rakes is permitted or not, though both

seek time to place the same on record.

19. However the arguments having been fully heard and the suit already

being nearly three years old and still at the stage of leave to defend, it is not

deemed expedient to adjourn the matter.

20. The only other argument of the counsel for the defendant is the

objection to the territorial jurisdiction of this Court. It is contended that the

rakes were for transportation of goods from Deojhar Railway Siding to

Vizag Port and no part of cause of action has accrued at Delhi except that

the money was transferred by the plaintiff to the defendant from the account

at Delhi. It is contended that since the cause of action has to be for seeking

refund, the transfer of money from Delhi would not constitute a cause of

action for a claim for refund.

21. The senior counsel for the plaintiff of course controverts and draws

attention to the plaint where it is pleaded that the agreement took place at

Delhi. It is also shown that the offer aforesaid was made by the defendant to

the plaintiff at Delhi and the invoice was also raised by the defendant on the

plaintiff at Delhi. Reliance in this regard is also placed on Mrs. Shradha

Wassan Vs. Mr. Anil Goel MANU/DE/0490/2009 where in the context of

Order 37 of the CPC, the principle of "Debtor must seek the creditor" was

invoked and it is argued that on the same principle, since the defendant was

liable to refund at Delhi the money which was admittedly received by the

defendant, the Courts at Delhi would have jurisdiction. In fact during the

hearing, a download from the website of the defendant is also shown to

contend that the defendant also has an office at Delhi.

22. I do not find any merit in the objection to the territorial jurisdiction of

the Court. From, the defendant making the offer to the plaintiff at Delhi and

raising invoice on the plaintiff at Delhi, it cannot be said that no part of

cause of action has occurred at Delhi. As long as some part of cause of

action has accrued at Delhi, this Court would have jurisdiction.

23. That brings me back to the question aforesaid of the maintainability

of the suit under Order 37 of the CPC. The other arguments of the

defendant are noticed only to complete the perspective.

24. The query raised by me initially remains to be answered. In my view

the principle enshrined in Syed Moosa Emami supra would apply to the

present case also. The judgments of this Court holding the invoices raised

by the plaintiff on the defendant for price of goods sold, supplied, delivered

and accepted by/to the defendant constitute a contract and the suit for

recovery of amount thereof constitutes a debt, within the meaning of Order

XXXVII, would be of no application as the invoice in the present case has

not been raised by the plaintiff on the defendant but by the defendant on the

plaintiff and the suit is not for recovery of the amount for which invoice was

raised and accepted but for refund of the amount paid by the plaintiff to the

defendant under the said invoice for the failure of the defendant to perform

his part of the contract for which the defendant received the payment. While

an invoice raised on and accepted by the defendant contains a promise by

the defendant to pay the amount thereof to the plaintiff, the acceptance by

the plaintiff of the invoice raised by the defendant, by paying the amount

thereof to the defendant, does not contain any promise by the defendant to

refund the amount thereof to the plaintiff.

25. The claim of the plaintiff in this suit is of the genre of suit for

recovery of money paid upon an existing consideration which afterward

fails (as described in Article 47 of the Schedule to the Limitation Act, 1963)

or a suit for compensation for breach of a promise to do anything or for

breach of any contract (as described in Articles 27 and 55 respectively of the

Schedule to the Limitation Act) and the question for adjudication in which

suits necessary is, whether there is a failure of consideration or not and / or

by whom the breach of contract is committed and unless there is any

admission in writing of failure or breach attributable to the defendant and of

the amount payable by defendant therefor, such suits do not fall in the

categories of suits to which Order XXXVII is applicable.

26. Moreover, even if it were to be believed that the contract entered into

between the parties of subletting of rakes was contrary to the WIS, at this

stage it cannot be said that such a contract was void in as much as this Court

in Nisha Raj Vs. Pratap K. Kaula 151 (2008) DLT 402 on a consideration

of plethora of case law has reiterated that Agreement to Sell of immovable

property in violation of conditions of perpetual lease under which seller

holds the property cannot be said to be void per se but have to be declared

to be void. In fact this Court in Universal Plast Limited Vs. Santosh Kumar

Gupta AIR 1985 Del. 383 has held that a contract of sale of spindles, in

contravention of the Woollen Textiles (Production & Distribution) Control

Order, 1962, being void, even the advance payable thereunder is not

refundable.

27. For all the aforesaid reasons, I am of the view that this suit is not

maintainable under Order 37 of the CPC.

28. Resultantly, the occasion for testing the leave to defend application on

the anvil of the principle therefor does not arise.

29. The application is disposed of.

CS(OS) 2940/2011 & IA No.18865/2011 (u/O 39 R-1&2 CPC).

30. The suit is ordered to be tried as an ordinary suit.

31. Written statement be filed within four weeks.

32. Replication within four weeks thereafter.

33. The parties to file their documents along with their pleadings and to

file affidavits of admission / denial of each other's documents before the

next date of hearing.

34. List for framing of issues if any on 4th August, 2014.

[

RAJIV SAHAI ENDLAW, J.

APRIL 16, 2014 pp