Goodluck Capital (P) Ltd. vs Bihari Forging Pvt. Ltd.
2014 Latest Caselaw 1617 Del

*      IN THE HIGH COURT OF DELHI AT NEW DELHI

                                        Date of decision: 26th March, 2014.

+                                  CS(OS) 635/2011

       GOODLUCK CAPITAL (P) LTD.                .... Plaintiff
                  Through: Mr. A.K. Thakur and Mr. R.K.
                             Mishra, Advocates.

                                     Versus

    BIHARI FORGING PVT. LTD.                                   ..... Defendant
                  Through: None.
CORAM:
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW

1.     The plaintiff has instituted the present suit for recovery of Rs.

1,66,83,554.68, pleading:

       (I)    that the plaintiff and the defendant entered into an arrangement

       sometime in April 2007, for supply by the plaintiff to the defendant of

       Steel and Heavy Melting Scrap;

       (II)   that the defendant used to make payments on an ad-hoc basis

       for the supplies made by the plaintiff, as per invoices raised from time

       to time, and which were adjusted towards the outstanding dues in the

       usual course of business;

       (III) that though initially the payments were promptly made by the

       defendant upon presentation of the invoice but subsequently,

CS(OS) No.635/2011                                                   Page 1 of 7
        especially from April 2009, the defendant started defaulting in

       making payments and the cheques issued by the defendant for unpaid

       invoices during the period 09.04.2009 to 26.10.2009 were dishonored

       due to stop payment instructions given by the defendant to its bankers

       and for which the plaintiff has also filed proceedings under Section

       138 of the Negotiable Instruments Act against the defendant;

       (IV) that the factum of payments in respect of supplies made by the

       plaintiff to the defendant being due is admitted by the defendant and

       in fact the defendant on 01.04.2009 had confirmed its liability to the

       extent of Rs. 1,69,78,165.85 in this regard after reconciliation of

       accounts between the two parties and signed of balance confirmation

       of accounts;

       (V)    that after 01.04.2009, various supplies were made and invoices

       were raised by the plaintiff and against which some payments were

       made by the defendant and after adjustment of which against the

       outstanding dues, the statement of accounts of the plaintiff for the

       period 01.04.2009 to 31.12.2010 reveal the net amount due and

       payable by the defendant to be Rs. 1,66,83,554.68;




CS(OS) No.635/2011                                                 Page 2 of 7
         (VI) that even after repeated requests, persuasion and follow-up, the

        defendant did not pay the outstanding dues and instead upon being

        approached intimidated the plaintiff with dire consequences, in lieu of

        which the plaintiff was also constrained to file an FIR on 02.12.2010

        with Sihani Gate Police Station, Ghaziabad against the Directors of

        the defendant under Section 406, 420 and 506 of IPC for breach of

        trust, cheating and criminal intimidation; and

        (VII) that the defendant has claimed MODVAT on the Excise Duty

        and VAT paid by the plaintiff on the supplies to the defendant and

        notices have been received by the plaintiff from the Excise Authority

        for verification of its invoices in this regard and thus such invoices

        cannot be denied by the defendant in law or fact.

        Accordingly, the plaintiff seeks to recover the aforesaid amount with

interest at 12% per annum from 01.01.2011 till realization of its outstanding

dues.

2.      Summons of the suit were issued on 15.03.2011. Though the Director

of the defendant personally entered appearance on 06.07.2011 and sought

time for filing the written statement but subsequently failed to do so and

stopped appearing thereafter. Accordingly, this Court on 09.12.2011 ordered


CS(OS) No.635/2011                                                   Page 3 of 7
 the defendant to be proceeded ex parte and listed the case for ex parte

evidence of the plaintiff. On the next date however, a counsel for the

defendant appeared and informed the Court of an application for setting

aside of the order proceeding ex parte order having been moved. However,

since the counsel also stopped appearing thereafter, the said application was

dismissed in default on 30.03.2012. The ex parte evidence of the plaintiff

was closed on 18.01.2014 and the matter placed before this Court today for

ex parte hearing.

3.     The plaintiff has examined only one witness being Mr. Sunil Kumar

Garg - the duly authorized representative of the plaintiff. The affidavit filed

by way of evidence reiterates the case as urged in the plaint and need is thus

not felt to advert thereto. Mention may however be made of the following

documents which have been tendered in evidence to support the case of the

plaintiff:

       (I)    Original Statement of Accounts of the plaintiff for the period

       01.04.2009 to 31.03.2010 revealing the balance payable by the

       defendant to be Rs. 1,66,83,554.68, exhibited as PW1/1;

       (II)   Letter dated 01.04.2009 sent by the defendant to the plaintiff of

       confirmation of accounts and which discloses the balance due as on


CS(OS) No.635/2011                                                   Page 4 of 7
        31.03.2009 in the books of accounts of the defendant itself to be Rs.

       1,69,78,165.85, exhibited with the mark 'W';

       (III) Copies of the dishonored cheques issued by the defendant to

       the plaintiff, exhibited with the marks A to I;

       (IV) Copies of summons issued in the proceedings initiated under

       Section 138 of the Negotiable Instruments Act with respect to the

       dishonored cheques, exhibited with the marks K to P; and

       (V)    Copies of Notices received by the plaintiff for verification of its

       invoices, with regard to the MODVAT claimed by the defendant,

       exhibited with marks A-1 to A-26.

4.     I am of the opinion that the documents on record satisfactorily prove

the existence of an arrangement for supply of goods by the plaintiff to the

defendant. As far as quantification of the amount owed by the defendant to

the plaintiff under such an arrangement is concerned, notice must first be

taken of the letter dated 01.04.2009 (Exhibit Mark 'W') by the defendant to

the plaintiff seeking confirmation of balance with regard to the transactions

between the parties and disclosing the outstanding dues in the accounts of

the defendant itself to be Rs 1,69,78,165.85 as on 31.03.2009. The

defendant has not contested the present suit to indicate whether it made any


CS(OS) No.635/2011                                                    Page 5 of 7
 payments subsequently towards satisfaction of the said admitted outstanding

dues. As opposed to this, the plaintiff has alleged that most cheques issued

by the defendant after April 2009 were dishonored and that though there

were some payments by the defendant with regard to invoices raised by the

plaintiff even after 01.04.2009, the outstanding balance still stood at Rs.

1,66,83,554.68 as on 31.12.2010 (which is roughly 3 lacs less than the

balance confirmed to be due by the defendant himself on 01.04.2009) and

has filed before this Court its statement of accounts to establish the same

(Exhibit PW1/1). I thus find no reason to disbelieve the plaintiff with regard

to either the existence of the arrangement for supply of goods to the

defendant or the quantification of the outstanding dues owed by the

defendant to the plaintiff with respect to the aforesaid arrangement. I may

also notice that though on the documents as mentioned in para 3 above at II

to V, mark as distinct from exhibit mark was put in the ex parte evidence of

the plaintiff, owing to the witness of the plaintiff, on the day when his

statement was recorded, not carrying the original documents but the original

documents were subsequently tendered on 18.01.2014 as well as today. It is

for this reason that the same have been read in evidence.




CS(OS) No.635/2011                                                  Page 6 of 7
 5.     Accordingly, I decree the suit of the plaintiff for recovery of Rs.

1,66,83,554.68 being the outstanding balance with respect to the

transactions entered into between the parties. The plaintiff has also claimed

interest at the rate of 12% from 01.01.2011 on the said amount. The

transactions between the parties being of a commercial nature, I do not

deem the rate of interest sought by the plaintiff to be exorbitant or

unreasonable. Accordingly, it is held that the plaintiff shall also be entitled

to interest on the sum of Rs. 1,66,83,554.68 at 12% per annum from

01.01.2011 till the realization of the sum from the defendant. The plaintiff

shall also be entitled to costs of the suit with the counsel's fee assessed at

Rs. 20,000.

       Decree Sheet be drawn up.


                                              RAJIV SAHAI ENDLAW, J.

MARCH 26, 2014. aa