Delhi High Court
Itc Limited vs Sravana Traders & Ors. on 7 May, 2014
Author: G. S. Sistani
$~27
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ CS(OS) 89/2014
% Judgment dated 07.05.2014
ITC LIMITED ..... Plaintiff
Through: Mr.Anil K.Kher, Sr.Advocate with
Mr.Siddharth Jain, Adv.
versus
SRAVANA TRADERS & ORS ..... Defendants
Through: Ms.Achu Ann Michael, Adv. for D-1, 2 & 5.
CORAM:
HON'BLE MR. JUSTICE G.S.SISTANI
G.S.SISTANI, J (ORAL)
1. Plaintiff has filed the present suit under the provisions of Order 37 of the
Code of Civil Procedure 1908 for recovery of Rs.1,16,34,198/-.
Summons were issued in the suit to the defendants in the prescribed form
on 13.1.2014 and on 28.2.2014. The defendants were served in the last
week of March, 2014. Counsel for the defendants entered appearance on
29.4.2014. It was noticed in the order passed on 29.4.2014 that memo of
appearance was not filed by the defendants in terms of Order XXXVII
CPC. Even today memo of appearance is not on record.
2. Counsel for the defendants submits that she has filed the memo of
appearance in the Registry on 02.05.2014 but the same is without any
application for condonation of delay.
3. Mr.Kher, learned senior counsel appearing for the plaintiff submits that in
the absence of memo of appearance and as no application for condonation
CS(OS) 89/2014 Page 1 of 6
of delay is on record, the plaintiff is entitled to a decree forthwith in terms
of the provisions of Order XXXVII Rule 2 Sub-Rule 3 CPC.
4. As per the plaint, the plaintiff is one of the leading companies of the
country, and is having business interests in varied fields including
lifestyle and retaining business of branded apparels and other accessories.
5. Further as per plaint, defendant no.1 is a partnership firm and defendant
nos.2 to 6 are its partners. The defendant no.1 is engaged in the business
of distribution, manufacturing, marketing, commission agent or broker in
garment and textiles.
6. It has further been averred in the plaint that the defendant nos.2 to 6 for
and on behalf of defendant no.1 approached plaintiff and requested that
defendant no.1 may be appointed as a Consignment Sales Agent of the
plaintiff for the branded apparels and accessories. After a detailed
discussion parties entered into an agreement on 28.7.2008 whereby
plaintiff appointed defendant no.1 as one of its Consignment Sales Agent
on the terms and conditions mentioned therein. The said agreement was
initially for a period of two years from 11.3.2008 which was extended for
a period of three years from 11.3.2010 on the same terms and conditions.
7. As per the said agreement, upon every sale affected during the term of the
agreement, the defendants were liable to pay within 60 days of such sale
value thereof in terms of the said agreement and remittance beyond 60
days was to attract interest @ 18% per annum.
8. Further as per the plaint, defendants had furnished Bank Guarantee dated
11.04.2008 and 24.04.2008 issued by Syndicate Bank bearing numbers
Bg 53/08 and Bg 60/08 in favour of plaintiff for Rs. 12 Lacs and Rs. 8
Lacs, respectively, as security for the goods supplied by plaintiff and due
payment of all amounts owed to the plaintiff from time to time by the
CS(OS) 89/2014 Page 2 of 6
defendants.
9. It is submitted that defendants were irregular in making the payments due
to the plaintiff. Vide letter dated 22.09.2011 the defendants admitted that
a sum of Rs.1,18,58,504/- was due and payable to the plaintiff and in
acknowledgment thereof six post-dated cheques were issued by the
defendants and further defendant no. 2 to 6, vide said letter, not only
acknowledged their liability but also stood guarantee for the due payment
of the outstanding amount. Vide another letter dated 22.09.2011
defendants further confirmed the realization of money from the retailers
against the sale of the plaintiff's goods in the capacity of Consignment
Sales Agent. The defendants vide the above letter confirmed the delay in
making the payment and assured to settle the same at earliest.
10. The plaintiff out of the above mentioned six post dated cheques, presented
three cheques bearing No.225760, 225761 and 225763 of Rs.20.0 lacs
each for encashment, whereas all the aforesaid three cheques were
dishonoured on presentation for the reason that the defendants did not
arrange sufficient funds in their account. Plaintiff sent a notice on
4.3.2012 and on 2.4.2012 intimating defendants about the dishonour of
the aforesaid cheques. Plaintiff also initiated criminal proceedings against
the defendants under section 138 of the Negotiable Instruments Act, 1882
and the same are still pending. Vide e-mail dated 2.4.2012 and reply
letter dated 19.4.2012 to the aforementioned notice of the plaintiff, the
defendants reiterated their admission of outstanding dues and that entire
liability towards plaintiff would be cleared by September, 2012.
11. In view of the continued failure of the defendants to pay the admitted
outstanding dues, the plaintiff encashed both the bank guarantees for a
total of Rs.20.0 lacs issued by defendant no.1. Defendants also made
CS(OS) 89/2014 Page 3 of 6
certain part payments and raised some claims on plaintiff. After adjusting
the amount realized from the encashment of the bank guarantee as well as
the amount of sum of the credit notes, issued towards claims raised by the
defendants a sum of Rs.84,56,433/- remained due and payable by
defendants to plaintiffs, as per the books of accounts being maintained by
the plaintiffs. Further, as per the terms of the agreement, an interest @
18% per annum would be payable on all outstanding amounts due by the
defendants. Accordingly, plaintiff has claimed interest amount @ 18%
per annum for the period till 31.10.2013, which comes up to
Rs.31,77,765/- making a total of Rs.1,16,34,198/- [i.e. Rs.84,56,433/- +
Rs.31,77,765/-].
12. Learned senior counsel for the plaintiff submits that the defendant
acknowledged their liability, which is apparent from the letter dated
22.09.2011 which is reproduced herein below:-
"To
ITC Limited
86, Udyogvihar, Phase 1,
Gurgaon - 122016
Haryana
Dear Sir,
We wish to inform you that we hereby acknowledge and
confirm that a sum of Rs.1,18,58,504/- (One crore eighteen lacs
fifty eight thousand five hundred and four only) (Gross outstanding
Rs.1,45,60,295.00 less Pending Claims Rs.27,01,791.00) is
outstanding and is due and payable to ITC Limited by us. This
payment is being made by way of the following post-dated cheques
being issued in favour of ITC Limited.
CS(OS) 89/2014 Page 4 of 6
S.No. Cheque No. Date Bank Amount
Name
1. 225760 03.10.2011 SBT 2000000
2. 225761 17.10.2011 SBT 2000000
3. 225763 24.10.2011 SBT 2000000
4. 225764 31.10.2011 SBT 2000000
5. 225762 07.11.2011 SBT 2000000
6. 225765 14.11.2011 SBT 1858504
11858504
We acknowledge and confirm the aforementioned
outstanding amount is a debt to ITC Limited and each of our
partners has acknowledged and confirmed to stand guarantee for
the due payment of the outstanding by us to ITC Limited.
We further agree and undertake to ensure that all cheques as
mentioned above will be honoured when presented for clearing. In
case any of the cheque is dishonoured, we along with our partners
shall remain personally liable for the payment due and payable to
ITC Limited. This will be without prejudice to the rights of ITC
Limited to proceed against us under the Negotiable Instruments
Act."
13. Original documents have been filed by the plaintiff in the proceedings
under Negotiable Instruments Act initiated against the defendants herein.
14. In the absence of filing of any memo of appearance in the time allowed
and after hearing the matter on merits, the present suit is decreed in favour
CS(OS) 89/2014 Page 5 of 6
of the plaintiff in sum of Rs.1,16,34,198/- with interest @12% per annum,
as pendente lite and future interest.
G.S.SISTANI, J.
MAY 07, 2014
dkb
