M/S U.D.K Papers Pvt Ltd vs M/S Glory Graphics Pvt Ltd
2015 Latest Caselaw 1254 Del

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       IN THE HIGH COURT OF DELHI AT NEW DELHI
                                 Date of Reserve: January 27, 2015
                               Date of Decision: February 11 , 2015
       +    IA No.16993/2013 in CS(OS) 1987/2012
           M/S U.D.K PAPERS PVT LTD              ..... Plaintiff
                     Through  Mr. K.Venkatraman, Adv.
                     versus
           M/S GLORY GRAPHICS PVT LTD         .... Defendant
                     Through  Mr. Vikas Chhabra, Adv.
       CORAM:
       HON'BLE MR. JUSTICE JAYANT NATH

       JAYANT NATH, J.

IA No.16993/2013

1. This application has been filed by the defendant under Order 37 Rule 3(5) for leave to defend on behalf of the defendant.

2. The plaintiff has filed the suit for recovery of Rs.29,02,788/-. As per the plaint, the defendant is a customer which purchased material i.e., paper from time to time. It is averred that from 01.04.2009 to 04.11.2009 against 10 different invoices, paper worth Rs.31,77,139/- were supplied to the defendant. The material was supplied on 60 days‟ credit and the defendant is said to have made part payment of Rs.15,07,998/- leaving a balance of Rs.16,69,151/- which the defendant is liable to pay along with alleged interest @ 30% per annum. It is urged that a legal notice was sent on 08.04.2011 which was duly served. The postal receipt and AD Cards are placed on record. It is stated that despite service of legal notice, the defendant has

failed to make the necessary payment.

3. The defendant in the present application has averred that the suit filed by the plaintiff cannot be a summary suit as the bills placed on record by the plaintiff were never received or acknowledged by the defendant. It is denied that bills as reproduced in para 3 of the plaint were ever issued to the defendant for which the alleged materials have been received by the defendant. It was further averred that bills are not even supported by the transport receipts/challans. The bills do not even bear stamp of defendant company or the date and name of person by whom the material was received on behalf of the defendant. It is, however, stated that the defendant has made payment of Rs.15,07,998/-. It is further stated that confiscatory interest @30% is sought to be recovered only to bring the suit within the jurisdiction of this Court. The receipt of legal notice is denied.

4. Learned counsel for the defendant has also pointed out that a perusal of the invoice numbers would show that they bear numbers almost in sequence. Bill No.T009 is dated 17.09.2009, Bill No.T010 is dated 26.09.2009, Bill No.T011 is dated 01.10.2009, Bill No.T012 is dated 24.10.2009. This serial number continues. This shows what is argued by the learned counsel for the defendant is that the plaintiff seems to have no other customer and is raising bills only on the defendant. It is averred that this is prima facie clear indication that the bills are make belief. Learned counsel relies upon the judgment of this High Court in S.V. Electricals Ltd. v. M/s Sylvania & Lakshman Ltd. 83 (2000) DLT 9 to argue that mere issuance of a bill or

invoice does not establish the case of the plaintiff.

5. Learned counsel for the plaintiff has submitted that though there is no proof of delivery of goods but the plaintiff has paid VAT on the goods supplied.

6. There is merit in the contention of learned counsel for the defendant. The invoice numbers are in sequence and the bills are of different dates which prima facie shows that either the invoices are concocted or the plaintiff has no other customer. A perusal of the documents filed by the plaintiff shows that the invoices placed on record do not have any receipt of the invoices by the defendant. No transport receipt is attached to the bills to show delivery of the goods or the transport used for delivering the goods. The other document which is placed on record to show the alleged claim of the plaintiff are some documents showing payment of VAT. There is nothing in these documents to connect them to the defendant. The copy of the ledger account showing a total debit of Rs.16,69,151/- is also on record. This will have to be proved by the plaintiff.

7. The present suit is filed as a summary suit based on the invoices said to have been raised by the plaintiff. However, there is nothing as of now to show that the invoices were agreed upon by the defendant or received by the defendant or that even the goods stated in the invoices were delivered to the defendants. It is for the plaintiff to show that the invoices raised were received by the defendant and the goods were duly delivered to the defendant which invoices are a subject matter of the present suit.

8. In S.V. Electricals Ltd. v. M/s Sylvania & Lakshman Ltd.(Supra), this Court held as follows:-

"10. ....But this proposition cannot be inordinately stretched to the extent to hold that a contract can come into existence unilaterally, i.e. by the mere issuance of a bill or an invoice or a written offer which does not even reach the other party. Therefore the now well established position enunciated in Punjab Pen House case would not apply in the present case."

9. In the context of grant of leave to defend, the principles of law applicable are well known. The basic judgment in this regard, namely, M/s Mechalec Engineers & Manufacturers v. M/s Basic Equipment Corporation AIR 1977 SC 577, may be looked into for the said purpose. In para 8, the Hon‟ble Supreme Court has held as follows:

"In Smt. Kiranmoyee Dassi and Anr. v. Dr. J. Chatterjee 49 C.W.N. 246 , Das. J.,after a comprehensive review of authorities on the subject, stated the principles applicable to cases covered by order 17 C.P.C. in the form of the following propositions (at p. 253) :

(a) If the Defendant satisfies the Court that he has a good defence to the claim on its merits the plaintiff is not entitled to leave to sign judgment and the Defendant is entitled to unconditional leave to defend.

(b) If the Defendant raises a triable issue indicating that he has a fair or bona fide or reasonable defence although not a positively good defence the plaintiff is not entitled to sign judgment and the Defendant is entitled to unconditional leave to defend.

(c) If the Defendant discloses such facts as may be deemed sufficient to entitle him to defend, that is to say, although the affidavit does not positively and immediately make it clear that he has a defence, yet, shows such a state of facts as leads to the inference that at the trial of the action he may be able to establish a defence to the plaintiff's claim the Plaintiff is not entitled to judgment and the Defendant is entitled to leave to defend but in such a case the Court may in its discretion impose conditions as to the time or mode of trial but not as to payment into Court or furnishing security.

(d) If the Defendant has no defence or the defence set up is illusory or sham or practically moonshine then ordinarily the Plaintiff is entitled to leave to sign judgment and the Defendant is not entitled to leave to defend.

(e) If the Defendant has no defence or the defence is illusory or sham or practically moonshine then although ordinarily the Plaintiff is entitled to leave to sign judgment, the Court may protect the Plaintiff by only allowing the defence to proceed if the amount claimed is paid into Court or otherwise secured and give leave to the Defendant on such condition, and thereby show mercy to the Defendant by enabling him to try to prove a defence."

In Mrs. Raj Duggal v. Ramesh Kumar Bansal, AIR 1990 SC 2218 it was held:

"3. Leave is declined where the Court is of the opinion that the grant of leave would merely enable the defendant to prolong the litigation by raising untenable and frivolous defences. The test is to see whether the defence raises a real issue and not a sham one, in the sense that if the facts alleged by the defendant are established there would be a good or even a plausible defence on those facts. If the Court

is satisfied about that leave must be given. If there is a triable issue in the sense that there is a fair dispute to be tried as to the meaning of a document on which the claim is based or uncertainty as to the amount actually due or where the alleged facts are of such a nature as to entitle the defendant to interrogate the plaintiff or to cross-examine his witnesses leave should not be denied. Where also, the defendant shows that even on a fair probability he has a bona fide defence, he ought to have leave. Summary judgment under Order 37 should not be granted where serious conflict as to matter of fact or where any difficulty on issues as to law arises. The Court should not reject the defence of the defendant merely because of its inherent implausibility or its inconsistency."

10. In the light of the above, I may now consider the submissions of the defendant.

11. The defendant has disclosed such facts which are sufficient to entitle him to defend the present suit. The facts disclosed show a state of affairs which would mean that at trial the defendant may be able to establish a defence.

12. Leave to defend is granted to the defendant stated above. The application is accordingly disposed of. CS(OS) 1987/2012

13. List before the Joint Registrar for completion of pleading and admission/denial of documents, on 9th March, 2015.

(JAYANT NATH, J.) JUDGE FEBRUARY 11TH , 2015 „raj‟