Creation For Children ... vs Bpi (India) Pvt. Ltd. & Ors.
2015 Latest Caselaw 9095 Del

*               IN THE HIGH COURT OF DELHI AT NEW DELHI

%                        Judgment pronounced on : 7th December, 2015

+                            CS (OS) No.2256/2010


        CREATION FOR CHILDREN INTERNATIONAL          ..... Plaintiff
                      Through   Ms. Ayushi Kiran, Adv.

                             versus

        BPI (INDIA) PVT. LTD. & ORS.                   .... Defendants
                         Through   Mr.J.P.Sengh, Sr.Adv. with
                                   Mr. Mukesh Goel, Ms. Sana Ansari
                                   & Ms. Vanessa Singh, Advs.

        CORAM:
        HON'BLE MR.JUSTICE MANMOHAN SINGH

MANMOHAN SINGH, J.

1. The plaintiff has filed the present suit for recovery of a sum of Rs.1,32,85,240/- along with pendente lite and future interest @ 18% per annum.

2. The plaintiff is a Limited Company incorporated and registered under the laws of Belgium, under registration number BE 476.404/513, having its registered office at Steenweg Op Deinze, 150, B- 9810, Nazareth, Belgium and engaged in the business of designing, publishing, selling and producing books and allied items for children for sale in the international market.

3. As per the plaint, Mr. Marc Barbier, working as Director with the plaintiff Company and Mr. Dirk Van Pamel have been jointly and severally authorized vide Board Resolution dated 1st June, 2010 to inter alia file and sign the present suit on behalf of the plaintiff and to

do all other deeds and things on behalf of the plaintiff Company required for the purpose.

4. The defendant No.1 is a private limited company registered under the Companies Act, 1956 having its registered office at 24/26 Borbhat Lane Krantiveer Rajguru Marg, Mumbai, Maharshtra-400004, India and is engaged in the business of publication, sale and distribution of children books and allied products. The defendant No.1 has its branch offices also at Delhi. Defendant No.2 and defendant No. 3 (wife of defendant No.2) are the Directors of the defendant No.1 who reside and work for gain at Delhi.

5. The defendant No. 1 Company admittedly used to place orders for supply of various children's books and other allied items with the plaintiff. The plaintiff vide Agreements dated 22nd June, 2007, 17th October, 2007, 14th April, 2008 and 22nd October, 2008, supplied to the defendants various books and other allied products from time to time.

6. Pursuant to the purchase orders placed with the plaintiff, the goods were dispatched to the defendants as per the specifications from time to time and the plaintiff raised invoices for the same. As a matter of fact the invoices clearly specified the Payment Terms as "120 days FOB" and also prescribed the due date of payment.

7. It is averred in the plaint that the defendants received the items ordered and there was no dispute as to the quantity or the quality of the items. The plaintiff executed the purchase order to the utmost satisfaction of the defendants, thereby fulfilling their obligations with utmost diligence and after having received the books and other allied items, subsequently the behavior of the defendants changed and the defendants started backing out from their

commitments. The plaintiff called upon the defendants to pay the dues through various correspondences and emails. The defendants on their part kept assuring the plaintiff of payment time and again, but the amount due were not paid in terms of the said invoices. despite of admission of their liability. The defendants, in spite of the plaintiff's repeated requests and reminders have failed to pay dues in terms of the said invoices, till date.

8. The details of various goods sold to the defendants, along with the invoice numbers and the amount outstanding against each of the said invoices is as under:

9. Thereafter, the plaintiff served a legal notice dated 16th January, 2010 on the defendants demanding the payment of USD 208,079.65 along with interest @ 18% p.a. Subsequently, a supplementary legal notice dated 30th January, 2010 was again served on the defendants seeking recovery of about USD 208,079.65 along with interest @18% p.a within 15 days of receipt of the said legal notice. The defendants did not reply to the aforesaid legal notices dated 16th January, 2010 and 30th January, 2010. The plaintiff was left with no option but to file the present suit. It is stated in the plaint that as on 1st July, 2010, the defendants owed a sum of USD 208,079.65 along with interest to the plaintiffs totaling to a sum of USD 285,653.15 (approx.). In the title of the suit, the above details in USD are mentioned, however, in the prayer, the decree was sought against the defendants in Indian rupees as mentioned in first para of my judgment.

10. The written statement was filed on behalf of the defendants who have inter alia raised the following main defenses:- i. It is submitted that defendant Nos.2 and 3 are not at all necessary parties to the suit. Admittedly, defendant No.1 is a Company duly registered with Registrar of Companies and thus, by all necessary implications, is an independent legal entity. ii. The suit of the plaintiff is barred by period of limitation. The same is based upon absolutely false and manipulated documents. It is submitted that this Court has got no territorial jurisdiction to try and entertain this suit. iii. It is submitted that in fact, defendant No.1 was appointed as sole selling agent for India by the plaintiff in the year 2005. Thereafter, to expand its business further, the plaintiff appointed

the defendant No. 1 as its sole selling agent for South East Asia, Africa, Middle East, Australia, New Zealand, Malta etc. It is submitted that as agreed between the parties, the plaintiff was entitled for the price of the goods which are in fact, sold. The plaintiff kept pouring in the material without instructions from the defendant No. 1 inspite of repeated objections from the side of the defendant No. 1. It was made clear to the plaintiff that in fact, market is down and product is not easily marketable. But the plaintiff kept sending the materials stating that defendant No. 1 should not be worried about as the liability of the defendant No. 1 would be only in case of products being sold. In fact, huge stock of the plaintiff's product is still lying with the defendant No. 1 which could not find purchasers and therefore, there was no liability to make the payment and it was specifically conveyed to the plaintiff by the defendant No. 1 that unutilized stock can be lifted by the plaintiff. But the intentions of the plaintiff became dishonest and instead of picking up the unutilized stock, the plaintiff started pressurizing the defendant No. 1 to make the payment.

iv. It is denied that defendant No. 1 placed the orders for supply of various children's books and other allied times with the plaintiff and the plaintiff supplied the same vide agreement dated 22nd June, 2007, 17th October, 2007, 14th April, 2008 and 22nd October, 2008. It is submitted that no such agreement was entered into between the plaintiff and defendant No. 1. v. It is also denied that pursuant to the purchase orders placed with the plaintiff, goods were dispatched to the defendants as per the specifications from time to time or that the defendant

No. 1 has received the items ordered or that there was no dispute as to the quantity of the items or that the plaintiff executed the purchase order to the utmost satisfaction of the defendants or fulfilled their obligations with utmost diligence. vi. It is submitted that there was in fact, no liability to pay and therefore, question of making efforts to make payment does not arise. No payment is due.

vii. It is denied that plaintiff served any legal notice dated 16 th January, 2010 or any other notice on the defendants as alleged therefore, question of sending any reply to the same does not arise at all.

11. Replication on behalf of the plaintiff was filed. The plaintiff has denied all the allegations made by the defendants in the written statement. It is denied that the present suit has not been signed, filed and verified by a duly authorized and competent person. It is stated that the instant suit has been duly signed, filed and properly verified by Mr. Marc Barbier who has been duly authorized vide Power of Attorney dated 1st June, 2010, issued by the resolution passed at the meeting of the Board of Directors of the plaintiff Company.

12. It was reiterated that the defendant Nos.2 and 3 are the Directors of the defendant No.1 Company and that the defendant No. 1 Company, acting through its directors viz. defendants Nos. 2 and 3, placed an order for supply of various children's books and other allied items with the plaintiff from time to time and that the defendants have miserably failed and deliberately neglected to pay their outstanding dues to the plaintiff.

13. It is the case of the plaintiff that a bare perusal of the documents placed on record reveals that the defendants have in fact

admitted the claim of the plaintiff. The contents of para 7 of the preliminary objections of the written statement are specifically denied by the plaintiff who also denied that huge stocks of the plaintiff's product is still lying with the defendant No. 1 which could not find purchasers and therefore there was no liability to make payment or that it was specifically conveyed by the defendant No.1 that unutilized stock can be lifted by the plaintiff. It is further denied that instead of picking up the unutilized stock the plaintiff started pressurizing the defendant No. 1 to make payment. It is also denied that the defendant No. 1 is suffering huge damages every day on account of stocking the unutilized stock of the plaintiff which the plaintiff was not lifting.

14. It is stated that defendants are trying to mislead this Court by making up false stories without any basis and in the process are trying to withhold the rightful amount which is due and outstanding by the defendants against the plaintiff. It was reiterated that the plaintiff vide various Agreements supplied to the defendants, various books and other allied products from time to time as per the order placed by the defendants and not the plaintiff. Also pursuant to the purchase orders placed with the plaintiff, the goods were dispatched to the defendants as per the specifications from time to time and the plaintiff raised invoices for the same. As a matter of fact the invoices clearly specified the Payment Terms as "120 days FOB" and also prescribed the due date of payment. However, despite the defendants receiving the items ordered to the utmost satisfaction of the defendants, the defendants have miserably failed and deliberately neglected to pay their outstanding dues to the plaintiff.

15. The following issues were framed from the pleading vide order dated 21st February, 2012:

(1) Whether the suit is without any cause of action? OPD (2) Whether the suit has not been signed by a competent person?

OPD (3) Whether the suit is bad for mis-joinder of parties? OPD (4) Whether the suit is barred by time? OPD (5) Whether the plaintiff is entitled to suit amount? OPP (6) Whether the plaintiff is entitled to interest? If so, at what rate?

OPP (7) Relief.

16. The plaintiff produced evidence by way of affidavit of Mr. Dirk Van Pamel as PW-1 working as Director in the plaintiff Company. The said affidavit was tendered as Ex.PA. In his affidavit PW-1 has almost made the statement on the same lines of the plaint and replication filed by the plaintiff to the written statement filed by the defendants.

17. PW-1 in his affidavit has relied upon the following documents which have been already exhibited and admitted by the defendants at the time of admission/denial of the documents, the details of the same are here as under:-

 Invoice dated 5th June, 2007 has been exhibited as Ex.P-1;  Invoice dated 5th June, 2007 has been exhibited as Ex.P-2;  Invoice dated 28th September, 2007 has been exhibited as Ex.P-3;

 Agreement dated 1st June, 2007 has been exhibited as Ex.P-4;  Invoice dated 28th September, 2007 has been exhibited as Ex.P-5;

 Agreement dated 29th May, 2007 has been exhibited as Ex.P-6;  Bill of Lading dated 23rd September,2007 has been exhibited as Ex.P-7;

 Invoice dated 17th October, 2007 and Bill of Lading dated 4th October, 2007 has been exhibited as Ex.P-8;  Invoice dated 23rd October, 2007 has been exhibited as Ex.P-9;  Invoice dated 21st December, 2007 has been exhibited as Ex.P-

10;

 Invoice dated 26th December, 2007 has been exhibited as Ex.P-

11;

 Invoice dated 26th December, 2007 has been exhibited as Ex.P-

12;

 Invoice dated 26th December, 2007 has been exhibited as Ex.P-

13;

 Agreement dated 22nd June, 2007 has been exhibited as Ex.P-

14;

 Invoice dated 30th December, 2008 has been exhibited as Ex.P-

16;

 E-mails dated 22nd May, 2009, 2nd June, 2009 and 9th June, 2009 have been exhibited as Ex.P-17.

18. PW-1 in his affidavit has also exhibited the following documents:-

 Certified Copy of Board Resolution has been exhibited as Ex.PW1/1;

 Bill of lading dated 24th May, 2007 has been exhibited as Ex.PW1/2;

 Agreement dated 25th January, 2007 has been exhibited as Ex.PW1/3;

 Agreement dated 25th January, 2007 has been exhibited as Ex.PW1/4;

 Bill of Lading dated 13th September, 2007 has been exhibited as Ex.PW1/5;

 Agreement dated 19th July, 2007 has been exhibited as Ex. PW1/6;

 Agreement dated 12th September, 2006 has been exhibited as Ex.PW1/7;

 Shipping order dated 31st December, 2007 has been exhibited as Ex.PW1/8;

 Agreement dated 17th October, 2007 has been exhibited as Ex.PW1/9;

 Bill of lading dated 15th January 2008 has been exhibited as Ex.PW1/10;

 Agreement dated 6th September, 2007 has been exhibited as Ex.PW1/11;

 Bill of lading dated 15th January, 2008 has been exhibited as Ex.PW1/12;

 Bill of lading dated 15th January, 2008 has been exhibited as Ex.PW1/13;

 Invoice dated 26th May, 2008 has been exhibited as Ex.PW1/14;

 Bill of lading dated 9th May, 2008 has been exhibited as Ex.PW1/15;

 Agreement dated 29th February, 2008 has been exhibited as Ex.PW1/16;

 Agreement dated 29th February, 2008 has been exhibited as Ex.PW1/17;

 Invoice dated 19th August, 2008 has been exhibited as Ex.PW1/18;

 Bill of lading dated 11th August, 2008 has been exhibited as Ex.PW1/19;

 Agreement dated 14th April, 2008 has been exhibited as Ex.PW1/20;

 Bill of lading dated 17th January, 2009 has been exhibited as Ex.PW1/21;

 Agreement dated 22nd October, 2008 has been exhibited as Ex.PW1/22;

 Invoice dated 20th May, 2009 has been exhibited as Ex.PW1/23;

 Bill of lading dated 28th March, 2009 has been exhibited as Ex.PW1/24;

 Invoice dated 20th May, 2009 has been exhibited as Ex.PW1/25;

 Email dated 3rd June,2009 has been exhibited as Ex.PW1/26:  Email dated 16th June, 2009 has been exhibited as Ex.PW1/27;  Email dated 17th June, 2009 has been exhibited as Ex.PW1/28;  Email dated 18th June, 2009 and 19th June, 2009 has been exhibited as Ex.PW1/29;

 Email dated 22nd June, 2009 has been exhibited as Ex.PW1/30;  Email dated 22nd June, 2009 has been exhibited as Ex.PW1/31;  Email dated 25th June, 2009 has been exhibited as Ex.PW1/32;  Email dated 25th June, 2009 has been exhibited as Ex.PW1/33;  Email dated 25th June, 2009 and 16th July, 2009 has been exhibited as Ex.PW1/34;

 Email dated 23rd July, 2009 and 18th August,2009 has been exhibited as Ex.PW1/35;

 Email dated 21st September,2009 has been exhibited as Ex.PW1/36;

 Email dated 9th November,2009 has been exhibited as Ex.PW1/37;

 Email dated 10th November, 2009 has been exhibited as Ex.PW1/38;

 Email dated 17th November, 2009 has been exhibited as Ex.PW1/40;

 Statement of Accounts have been exhibited as Ex.PW1/41;  Ledger Accounts Statement has been exhibited as Ex.PW1/42;  Certificate by the Director Incharge of Computer System has been exhibited as Ex.PW1/43;

 Copy of legal notice has been exhibited as Ex.PW1/44;  Original UPC Slip has been exhibited as Ex.PW1/45;  Postal slip No.5787,5788,5789,5790 have been exhibited as Ex.PW1/46 to Ex.PW1/49;

 UPC receipt has been exhibited as Ex.PW1/50;  Postal slip No.5879,5880,5881,5882 have been exhibited as Ex.PW1/51 to Ex.PW1/53A;

 Original sample book has been exhibited as Ex.PW1/54;  Printed copy of Directors Report received from government website has been exhibited as Ex.PW1/55;

 Printed copy of Auditor Report with annexure obtained from government of India website has been exhibited as Ex.PW1/56;

 Printed copy of Annual return made upto 29th September, 2011 received from government website has been exhibited as Ex.PW1/58;

 Printed copy of Annual Return upto 29th September, 2012 has been exhibited as Ex.PW1/59;

 Printed copy of Auditor Report with annexure obtained from Government website has been exhibited as Ex.PW1/60.

19. The defendants have produced the evidence by way of affidavit of Jai Saxena (DW-1) working as Director in the defendant No.1 Company. The same was tendered as Ex.DW-1/A. In his affidavit, DW-1 only repeated the contents of the written statements.

20. Before dealing with the rival submissions of the parties and discussing the evidence produced by them on the issues framed, it is necessary to mention here that during the final hearing, without prejudice, the other side made the proposal upon instructions, on behalf of defendants, who are ready to pay the principle amount in installment as they are facing money crunch in their business. However, it was clarified that no interest and cost shall be paid by the defendants. The suggestion given on behalf of defendants without prejudice is not acceptable to the plaintiff whose authorized representative is present in Court.

Counsel for the plaintiff has pointed out that the defendant No.1 Company is of robust financial health and is part of the S Chand group and is capable of making the payment in one go along with interest. Counsel has referred to the annual reports of defendant No.1 for 2010-2011 (Ex.PW1/56) (showing M/s Blackie & sons owning 51% of defendant No.1); 2011-12 (Ex.PW1/60) (showing S Chand at the Ultimate Holding Company) as well as Annexure B(colly) documents

showing defendant No.1 as part of the S Chand Group. Counsel for the plaintiffs has informed that the defendants have now moved their registered office to New Delhi as per the document filed by the plaintiff as Annexure C.

21. Counsel for the plaintiff has also pointed out that the said suggestion is made in view of admissions made by the defendants in their communications with the plaintiff in writing or otherwise from time to time. Counsel states that the defendants never raised any dissatisfaction regarding goods supplied by the plaintiff who requested the defendants for payment of dues, wherein the defendants unequivocally admitted the aforesaid amount due to the plaintiff Company in reply to the e-mail sent by the plaintiff to the defendants. The details of the said admissions which have been exhibited as PW- 1/17, PW- 1/25 and PW- 1/40 are reproduced here as under :

22. As the defendants are not ready to pay the interest amount, the Court has no option but to proceed with the matter on merit. Issue No.2

23. Firstly, I shall take up the issue No.2. The burden of proof on this issue is upon the defendants. PW-1 in his affidavit has stated that Mr. Marc Babier was a duly Constituted Attorney of the plaintiff

company by Delegation of Powers/ Power of Attorney dated 1st June, 2010, executed in his favour and as such he was authorised to sign, verify the plaint, Vakalatnama and to initiate legal proceedings, to submit the documents, to swear affidavit(s), to make the depositions and statements and to file suit, revision, review, appeals etc., to compromise the matter and to do all other deeds and things on behalf of the plaintiff Company required for the filing and pursuing the matter against the defendants. Power of Attorney has been exhibited as Exhibit PW 1/1. PW-1 has seen Mr. Marc Babier signing and writing the documents and he can identify his signature on the plaint.

24. It is deposed that as Mr. Marc Barbier had resigned, PW-1 is duly Constituted Attorney of the plaintiff Company by Delegation of Powers/ Power of Attorney dated 1st June, 2010 executed in his favour and as such he is authorised to sign, verify the plaint, Vakalatnama and to initiate legal proceedings, to submit the documents, to swear affidavit(s), to make the depositions and statements and to file suit, revision, review, appeals etc., to compromise the matter and to do all other deeds and things on behalf of the plaintiff Company required for the filing and pursuing the matter against the defendants. Power of Attorney has been exhibited as Exhibit PW1/2.

25. The question 16 and 26 of PW-1's cross examination of PW-1 would speak for itself. The same reads as under:- "Q16. Show me?

Ans. I will show it to you and as you will remark that I have fully authority to represent the plaintiff company since the start up because all the Board resolutions are there and duly signed by me since the start up of the plaintiff company. The Ld. Counsel for the defendants

objected to the recording of the opinion of the witness as is not relevant and corresponding to the question put to the witness).

(The minute book has been shown to the counsel for the defendants).

Q26. Have you signed and verified the plaint? Ans. My signatures are appeared at Point A and at Point B in the plaint. Vol. The signature of Mr. Marc Barbier, the other Director at Point C."

26. With regard to the objections about the incorporation of the plaintiff Company, it is rightly argued by the counsel for the plaintiff that no issue has been framed in this regard. It has come on record that the PW-1 showed the defendants' counsel complete set of original incorporation documents along with the original minutes book. In view of the above said reason, the defendants have not been able to discharge their burden on issue No.2. Nothing contrary has come on record in the cross-examination. Thus, the issue No.2 is decided in favour of the plaintiff and against the defendants as they have failed to discharge their burden on this issue.

27. The abovementioned issues are connected with each other. Burden on issue Nos.1, 3 and 4 are upon the defendants. It is deposed by PW-1 that after having received the books and other allied items, the behavior of the defendants changed drastically and the defendants started backing out from their commitments. The plaintiff Company called upon the defendants to pay the dues through various correspondences and emails. The defendants on their part kept assuring the plaintiff of payment time and again, but as it turned out, the assurances were false and hollow. The defendants made no efforts to pay the dues in terms of the said invoices and in

furtherance of their assurances. The liability of defendants is determined and specific, and even admitted. However, for reasons best known to the defendants, in spite of the plaintiff's repeated requests and reminders, the defendants have failed and deliberately neglected to pay dues in terms of the said invoices, till date. The copies of the various emails sent by the plaintiff Company to the defendants have been exhibited as Ex.PW 3. A certificate of electronic records has been exhibited as Ex.PW 4.

The details of various goods sold to the defendants, along with the invoice numbers and the amount outstanding against each of the said invoices is hereas under:

28. The original agreements along with aforementioned invoices and bill of ladings have been exhibited as Ex.PW-5. The extract from the books of accounts maintained by the plaintiff Company showing the total outstanding amount against the defendants has been exhibited as Ex.PW-6.

29. It is the admitted position that the plaintiff published and shipped books to defendants under a FREE ON BOARD contract (A trade term requiring the seller to deliver goods on board a vessel designated by the buyer. The seller fulfills its obligations to deliver when the goods have passed over the ship's rail. When used in trade terms, the word 'free" means the seller has an obligation to deliver goods to a named place for transfer to a carrier) wherein the books were custom made as per the order placed by the defendants, resulting in a contract which was faxed to defendants for signatures and thereafter, invoice and bill of lading were issued. A Sample custom made book has been exhibited as Ex.PW 1/54 and Ex.PW 1/55.

30. It is proved on record that there were various agreements between the plaintiff and defendants from time to time for supply of books and other allied products to defendants. The details of agreement are here as under:-

1. Agreement No. C07005 dated 25.01.2007 : Ex PW 1/3

2. Agreement No. C07004 dated 25.01.2007 : Ex PW 1/4

3. Agreement No. C07095 dated 01.06.2007 : Ex P-4

4. Agreement No. C07088 dated 29.05.2007 : Ex P-6

5. Agreement No. C07131 dated 19.07.2007 : ExPW 1/6

6. Agreement No. C06118 dated 12.09.2006 : ExPW 1/7

7. Agreement No. C07205 dated 17.10.2007 : ExPW1/9

8. Agreement No. C07165 dated 25.01.2007 : ExPW l/11

9. Agreement No. C07118 dated 22.06.2007 : ExP-14

10. Agreement No. C08041 dated 29.02.2008 : ExPW 1/16 11 . Agreement No. C08042 dated 29.02.2008 : Ex PW 1/17

12. Agreement No. C08055 dated 14.04.2008 : Ex PW 1/21

13. Agreement No. C08145 dated 22.10.2008 : ExPW1/22

31. The plaintiff has produced and also proved the certified statement of accounts which have been exhibited as Ex.PW1/41, PW1/42 as per the following list of invoices:

1. Invoice dated 05.06.2007 issued pursuant to Agreement No.C07005: Ex.P-1.

2. Invoice dated 05.06.2007 issued pursuant to Agreement No.C07004: Ex P-2

3. Invoice dated 28.09.2007 issued pursuant to Agreement No.C07095a:Ex P-3.

4. Invoice dated 28.09.2007 issued pursuant to Agreement No.C07088:ExP-5,

5. Invoice dated 17.10.2007 issued pursuant to Agreement No.C07131:Ex P-8,

6. Invoice dated 23.10.2007 issued pursuant to Agreement No. C06118:Ex P-9

7. Invoice dated 21.12.2007 issued pursuant to Agreement No.C07205:Ex P-10

8. Invoice dated 26.12.2007 issued pursuant to Agreement No. C07165:ExP-11

9. Invoice dated 26.12.2007 issued pursuant to Agreement No.C07095:ExP-12 1O. Invoice dated 26.12.2007 issued pursuant to Agreement No.C07116;ExP-13 11 . Invoice dated 26.05.2008 issued pursuant to Agreement Nos.

C08041 + C08042; Ex PW 1/14

12. Invoice dated 19.08.2008 issued pursuant to Agreement No.C08055;ExP-15

13. Invoice dated 05.06.2007 issued pursuant to Agreement No.C08145a;ExP-16

14. Invoice dated 20.05.2009 issued pursuant to Agreement No.C08145b; ExPW l/23.

32. The defendants have never objected to receiving of the impugned books and in fact willingly took delivery from the shipper by paying marine freight transport charges, insurance, unloading and transportation charges from the port to its New Delhi office and therefore concluded the sale of goods. Nothing contrary has been filed by the defendants to support its false claims which is merely an afterthought.

33. All the invoices provide payment terms as: 120 days FOB and the due date.

34. The other allegation regarding the contract being a distribution contract is wholly incorrect. The contract between the plaintiff and the defendants was purely a buyer-seller contract with FOB terms (payment due within 120 days of delivery) and the books were custom made for the defendants with their logo and ISBN number only after receiving a specific order from the defendants and therefore, the books could never have been returned.

35. All the invoices have been admitted by the defendants except PW-1/23. The plaintiff has proved the Bill of Ladings. The details of same are given as; PW1/2, PW1/9, P-7, PW1/8, PW1/10, PW1/12, PW1/13, PW1/15, PW1/19, PW1/21 and PW1/24.

36. It is pertinent to mention that on one hand the defendants have admitted the invoices but denied the underlying contract and Bill of Ladings as per details mentioned below:-

1. Invoice dated 05.06.2007: P-2; contract dated 25.01.2007 -

PW-1/4,

2. Invoice dated 23.10.2007: P-9; contract dated 12.09.2006 -

PW-1/7,

3. Invoice dated 26.12.2007: P-11; Bill of Lading PW-1/10, contract dated 06.09.2007-PW-1/11,

4. Invoice dated 19.08.2008: P-15; contract dated 14.04.2008 -

PW-1/20,

5. Invoice dated 30.12.2008: P-16; contract dated 22.10.2008 -

PW-1/22.

37. The plaintiff has put relevant questions in the cross examination of DW-1. The questions No.24 to 27 and the answer given by him are reproduced herein below:-

"Q24. Do you know Mr. Sunil S.Patki? (objected to) A. Yes.

Q25. How do you know him? (objected to) A. I know him for the last 25 years, as a friend. Q26. Please see emails dated 16.06.2009, Exhibit PW-1/27 dated 25.06, 2009, Exhibit PW-1/32 dated 18.08.2009, Exhibit PW-1/35 at pages 61, 67 & 70 of part 3 of suit record. In which you are CCed, where Sunil your employee admits, BPI to be C4CI's debtor. I put it to you that you were defaulting in payments to the plaintiff as admitted in the said emails?

A. It is denied.

Q27. Please see your (i.e. defendant No.2) emails dated 18.06.2009 and dated 19.06.2009 Exhibit PW-1/29, dated 09.11.2009 Exhibit PW-1/37, dated 10.11.2009 Exhibit PW-1/39, where you admitted being debtor of the plaintiff. I put it you that you were defaulting in payments to the plaintiff as admitted in the said emails?

          A.     I deny it."
           The   relevant      question   in   the   defendant   No.2's     cross-

examination (DW-1) questions 12 and 22 reads as under:-

"Q12. Please see paragraph 5 of your affidavit in Evidence, have you filed any document to prove that you ever objected to the plaintiff providing BPI India with the books in question?

A. No. Most of the discussions were verbal and it was a running account for over 5 years, so lot of business

happened during that period. Most of the business was conducted over phone and skype.

Q22. Please see Exhibit P-1-P-17 in the part 3 of the suit record, I put it to you that they clearly mentioned that they were Free on Board (FOB). Therefore, despite your claiming that you never needed the books supplied by plaintiff, instead of just leaving them at the port, you paid the cost of marine freight transport, insurance, unloading and transportation from the arrival port to your office to get those books delivered to you and therefore I put it to you that you willingly received these consignment.

A. It was a running account and the plaintiff kept sending the stocks and therefore we kept took the delivery of the same."

38. The defendants contended that few agreements are not signed by the defendants. In this regard DW-1 in his cross examination, the plaintiff has asked question 12 and 22 which reads as under:- "Q12. Please see paragraph 5 of your affidavit in Evidence, have you filed any document to prove that you ever objected to the plaintiff providing BPI India with the books in question?

A. No. Most of the discussions were verbal and it was a running account for over 5 years, so lot of business happened during that period. Most of the business was conducted over phone and skype.

Q22. Please see Exhibit P-1-P-17 in the part 3 of the suit record, I put it to you that they clearly mentioned that they were Free on Board (FOB). Therefore, despite your claiming that you never needed the books supplied by plaintiff, instead of just leaving them at the port, you paid the cost of marine freight transport, insurance, unloading and transportation from the arrival port to your office to get those books delivered to you and therefore I put it to you that you willingly received these consignment. A. It was running account and the plaintiff kept sending the stocks and therefore we kept took the delivery of the same."

39. However, the defendants have also admitted plaintiff as their creditor in the annual reports for the financial years 2009 and 2010 about their liabilities. The annual reports of defendant No.1 of 2008- 09 and 2009-10 have been marked as DW1/X-1 and Mark DW1/X-2.

Even questions 36,38,40,43,45 of PW-1's cross examination clear the position which negates the plea of the defendants.

40. From the material placed on record, it is clear that the defendant No.1 was appointed as the sole selling agent for India in 2005 who was also the sole selling agent for South East Asia, Africa, Middle East, Australia, New Zealand, Malta. The defendant No.1 told the plaintiff that the market is down and its products are not easily marketable but still kept sending products. The defendant No.1 even asked the plaintiff to pick up unutilized stuff.

41. The plaintiff's counsel has put relevant questions No.29,30 in the cross-examination of DW1. The same reads as under:-

"Q29. Please see your company's balance sheet being shown to you for the financial year ending 31.03.2009 and 31.03.2010 (the documents being shown to the witness is giving the No. marked as X1 and X2 for the purpose of identification) in which under the heading Sundry Creditors the plaintiff is shown as a creditor of the amount as indicated therein. I put it to you that you have therefore falsely stated that you are the selling agent of the plaintiff since you only clearly mentioned the plaintiff as your creditor? (objected to)

A. It was an ongoing account. Whenever the stocks came (as always agreed on sale and return basis) we took it to our warehouse and tried helping the stock to sell. Since the stocks were taken into the warehouse, we put it in our accounts.

Q30. Please see your company's balance sheet being shown to you for the financial year ending 31.03.2009 and 31.03.2010 and the credit amount mentioned therein

against the plaintiff. Now please see Exhibit PW-1/56 at page 99 which is your annual report for the year 2010- 2011 and see Exhibit PW-1/60 at page 150 which is your annual report for the year 2011-2012. The extract credit amount now reflects as legal liability by the case instituted by the plaintiff in the year 2010. I put it to you that you are fraudulently trying to reflect the credit amount as legal liability from 2011 onwards to escape your debt liability towards the plaintiff after the present case was instituted.

A. No, it is incorrect."

42. In view of admissions made by the defendants, it is evident that the suit filed by the plaintiff is not without any cause of action. The defendants failed to discharge their burden in Issue No.1. Hence, it is decided against the defendants.

43. There is no force in the submissions of defendants' counsel on issue No.3 that the defendant No.2 and 3 are not jointly severally liable and the suit is bad for mis-joinder of parties. The said arguments are not tenable as they are husband and wife and personally liable because of the reasons that they are actively involved in all the transactions.

44. Now, it is well settled law that a Director may be held personally responsible, without any limitation of liability, for all or any of the debts or other liabilities of the Company if he or she was knowingly party to the fraudulent carrying on of business:. Reliance is placed on Official Liquidator v. Parthasarathi Sinha & Others, 1983 AIR SC 188; Official Liquidator, Supreme Bank Ltd. v. P.A.Tendolkar (Dead) by L.Rs. 1973 AIR SC 1104. Reliance is also placed on the latest judgment of Supreme Court in Sunil Bharti Mittal v. Central Bureau of Investigation (2015) 4 SCC 609.

45. In view of the facts and circumstances in his testimony it is disclosed that the defendants are thus jointly and severally liable to pay a sum of USD 208,079.65 along with interest to the plaintiffs totaling to a sum of USD 285,653.15 (approx.) and the plaintiff company is therefore entitled to a decree as prayed.

46. The admissions of payment were made by them. They had acknowledged the amount. The emails exchanged between the parties highlight the personal involvement of the said directors which have been exhibited as PW1/29. Issue No.3 is accordingly decided against the defendants.

47. With regard to Issue No.4 that the suit is barred by time, admittedly the suit was filed in the year 2010. The transactions are between the parties from year 2007 to 2010 and in the year 2009 the defendants by communications PW-1/40 and PW-1/25 have admitted their liability. It was a running account. There is an admission made by the defendants in their email dated 17 th November, 2009 admitting their liabilities which have been exhibited as Ex.PW 1/40. Before filing the suit legal notice was served. No reply was given. On the face of it, the suit is filed within period of limitation. Even otherwise, defendants have failed to discharge their burden, no arguments were addressed during hearing. The issue is decided against the defendants. Thus, the issue No-4 is decided against the defendants.

48. Though no issue of territorial jurisdiction was framed, however, as far as the objection of territorial jurisdiction is concerned, it is not denied by the defendants that the defendant No.1's Directors i.e defendant Nos.2 and 3 reside in Delhi and work for gain in Delhi from the Delhi head office of defendant No.1. Defendants received all the

books ordered from the plaintiff Company at their New Delhi address. The said objection is rejected.

49. From the aforementioned reasons, it is clear that the plaintiff has discharged its burden on issue No.5 as the defendants have failed to raise any valid defense in view of plea taken in the written statement and the evidence produced as DW-1. It was the admitted liabilities of the defendants who failed to pay the said amount to the plaintiff. The suit is not time barred, even otherwise, the defendants have failed to discharge their burden nor the suit is bad for mis- joinder of parties. The plaintiff has filed the suit against the defendants who are responsible to make the payment. The defendants have also failed to discharge their burden to the effect that the suit has not been signed by the competent persons.

50. The copy of legal notices dated 16th January, 2010 and 30th January, 2010 were served upon the defendants through the counsels of the plaintiff and have been exhibited as Ex. PW-1/44 and Ex. PW- 1/50. It is deposed by PW-1 that defendants did not even care to reply to the aforesaid legal notices dated 16th January, 2010 and 30th January, 2010. As on 1st July, 2010, the defendants owe a sum of USD 208,079.65 along with interest to the plaintiffs totaling to a sum of 285,653.15 (approx.).

Issue No.6

51. As far as rate of interest from the date of filing of suit till the date of payment is concerned, the plaintiff has claimed interest @ 18% p.a. There is a force in the submission of the learned counsel for the plaintiff who submitted that the plaintiff has completed all the transactions and exported the goods against the order from the defendants after obtaining the loan from the bank in its country and

interest is still being paid by the plaintiff thus, the interest claimed by the plaintiff is granted as prayed for. The said issue is decided in favour of plaintiff who has been able to discharge its burden. Thus, all the issues are decided in favour of the plaintiff and against the defendant.

52. Accordingly, the suit of the plaintiff is decreed. The decree is passed for a sum of Rs.1,32,85,240/- alongwith pendente lite and future interest @ 18% p.a. from the date of filing of suit i.e. 25th October, 2010 till the date of payment. The plaintiff is also entitled to costs. Counsel fee is assessed at Rs.50,000/-.

53. Decree be drawn accordingly.

(MANMOHAN SINGH) JUDGE DECEMBER 07, 2015