Delhi High Court
Bpi (India) Pvt. Ltd. & Ors. vs Creation For Children ... on 8 August, 2016
$~14
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of Decision : August 08, 2016
+ RFA(OS) 7/2016 & CM No.16654/2016
BPI (INDIA) PVT LTD & ORS ..... Appellants
Represented by: Mr.Ramji Srinivasan, Sr.Advocate
instructed by Mr.Shailesh Kapoor and
Mr.Ajay Kumar, Advocates
versus
CREATION FOR CHILDREN INTERNATIONAL NV..... Respondent
Represented by: Ms.Ayushi Kiran, Advocate
CORAM:
HON'BLE MR. JUSTICE PRADEEP NANDRAJOG
HON'BLE MS. JUSTICE PRATIBHA RANI
PRADEEP NANDRAJOG, J. (Oral)
1. Heard learned counsel for the parties. Record of the suit has been
perused.
2. Respondent sued the appellants claiming decree in sum of
`1,32,85,240/- (Rupees One Crore Thirty Two Lacs Eighty Five Thousand
Two Hundred and Forty only). Approximate value being US$ 2,85,653.15
(US Dollars Two Lacs Eighty Five Thousand Six Hundred Fifty Three and
Cents Fifteen only). As per the plaint, the first appellant is a company
registered under the Companies Act and appellants 2 and 3 are its directors.
They were impleaded as defendants No.1 to 3. It is pleaded that through the
Directors, appellant No.1 placed purchase orders upon the respondent for
books and vide four agreements dated June 22, 2007, October 17, 2007,
April 14, 2008 and October 22, 2008 the respondent supplied books to the
first appellant. As per purchase orders payment had to be made after 120
days FOB (a plea which learned counsel for the respondent cannot explain
for the reason FOB means freight on board and thus cannot be the starting
point to calculate time). Pleading that under 14 invoices, Ex.P-1, Ex.P-2,
Ex.P-3, Ex.P-5, Ex.P-8, Ex.P-9, Ex.P-10, Ex.P-11, Ex.P-12, Ex.P-13, Ex.P-
16, Ex.PW-1/14, Ex.PW-1/18 and Ex.PW-1/23 the books were supplied
total value whereof is US$ 2,94,398.68 (US Dollar Two Lacs Ninety Four
Thousand Three Hundred Ninety Eight and Cents Sixty Eight only) it was
pleaded that the first appellant had received US$ 86,359.03 (US Dollar
Eighty Six Thousand Three Hundred Fifty Nine and Cent Three only) in
instalments on various dates and thus for the goods supplied outstanding
sum was US$ 2,08,039.65 (US Dollar Two Lacs Eight Thousand Thirty
Nine and Cents Sixty Five only), calculating pre-suit interest @ 18% per
annum reckoned with effect from a date not given the suit amount claimed is
US$ 2,85,653.18 (US Dollar Two Lacs Eighty Five Thousand Six Hundred
Fifty Three and Cents Eighteen only) which was converted into Indian
`1,32,85,240/- (Rupees One Lac Thirty Two Thousand Eighty Five
Thousand Two Hundred and Forty only). The plaint was instituted under
the signatures of Marc Barbier and Mr.Dirk Van Pamel who claimed
authorization under a Board Resolution dated June 01, 2010.
3. Highlighting that in the plaint there are no allegations that the two
Directors of the defendant No.1 who were impleaded as defendants No.2
and 3 stood personal guarantee nor are there any allegations of malfeasance
or misfeasance, a decree was claimed against all the defendants.
4. In the joint written statement filed by the defendants it was pleaded
that on the averments made in the plaint, the two directors of defendant No.1
were neither necessary nor proper parties. It was pleaded that the first
defendant was appointed as a sole selling agent by the plaintiff in the year
2005. It was pleaded that the plaintiff was entitled to the value of the goods
only upon sale. It was pleaded that, and we use the expression used in the
written statement - the plaintiff kept on pouring in material. Authority of
Marc Barbier and Mr.Dirk Van Pamel to institute the suit was denied.
Averments in para 9 of the plaint where reference has been made, giving
details of 14 invoices, have been dealt with very cursorily by pleading that
said averments in paragraph 9 wherein it is pleaded that several requests
were made to remit payment for the amount due under 14 invoices are
denied. We do not find any denial to the specific averment made in
paragraph 9 giving details of 14 invoices being raised and goods supplied
pursuant thereto. We note said fact for the reason that of the 14 invoices, 11
were admitted during admission/denial which are Ex.P-1, Ex.P-2, Ex.P-3,
Ex.P-5, Ex.P-8, Ex.P-9, Ex.P-10, Ex.P-11, Ex.P-12, Ex.P-13 and Ex.P-16.
At the trial 3 invoices Ex.PW-1/14, Ex.PW-1/18 and Ex.PW-1/23 were
proved and no issue concerning the same has been argued either before the
learned Single Judge or in appeal before us.
5. On the pleadings of the parties following seven issues were settled
vide order dated February 21, 2012:-
"1. Whether the suit is without any cause of actions? OPD
2. Whether the suit has not been signed by a competent
person? OPD
3. Whether the suit is bad for misjoinder 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."
6. Surprisingly no issue has been settled as to whether the first defendant
was appointed as a sole selling agent by the plaintiff in the year 2005.
7. At the trial the plaintiff examined Mr.Dirk Van Pamel as its witness
who proved various documents, and the number being large, we intend to
note only such which are relevant for the purposes of the adjudication of the
appeal, and we shall do so soon hereinafter as we proceed to note the
reasoning given by the learned Single Judge in decreeing the suit. The issue
of limitation was given up before the learned Single Judge and even in the
appeal no contention qua the same was argued by learned senior counsel for
the appellant.
8. With respect to issue No.1, suffice it to state that the plaint clearly
evinces a cause of action as was conceded to by learned senior counsel for
the appellants and thus we delve no further.
9. On issue No.2, with reference to the Board Resolution Ex.PW-1/1 the
authority of Marc Barbier and Mr.Dirk Van Pamel having been established,
on issue No.2 the finding returned by the learned Single Judge was not
questioned by learned senior counsel for the appellants.
10. As noted above, no arguments were advanced on issue No.4.
11. With respect to issues No.5 and 6 i.e. to what amount the plaintiff is
entitled to and at what rate of interest, we note the relevant documentary
evidence by tabulating the same in a table. The same would be as under:-
S.NO. INVOICE AGREEMEN BILL OF
NUMBER T LADING
NUMBER NUMBER
1. 2007063 DATED C07005 DATE HKG31769NHA
05/06/2007 D DATED
25/01/2007 24/05/2007
(EX.P-1) (EX.PW-1/3) (EX.PW-1/2)
2. 2007064 DATED C07004 HKG31769NHA
5/06/2007 DATED DATED
25/01/2007 24/05/2007
(EX.P-2) (EX.PW-1/4) (EX.PW-1/2)
3. 2007132 DATED C07095 HKG40256NHA
28/09/2007* DATED DATED
1/06/2007 23/09/2007
(EX.P-3) (EX.P-4) (EX.P-7)
*(EX.P-3 &
EX.P-12
RELATE TO
THE SAME
AGREEMENT)
4. 2007242 DATED C07095 HKG49181NHA
26/12/2007* DATED DATED
1/06/2007 15/01/2008
(EX.P-12) (EX.P-4) (EX.PW-1/12)
*(EX.P-3 &
EX.P-12
RELATE TO
THE SAME
AGREEMENT)
5. 2007139 DATED C07088 F/NSA 270939
28/09/2007 DATED DATED
29/05/2007 23/09/2007
(EX.P-5) (EX.P-6) (EX.P-7)
6. 2007144 DATED C07131 HKG41991NHA
17/10/2007 DATED DATED
19/07/2007 04/10/2007
(EX.P-8) (EX.PW-1/6) (EX.P-8)
7. 2007163 DATED C06118
23/10/2007 DATED
12/09/2006
(EX.P-9) (EX.PW- 1/7)
8. 2007222 DATED C07205 SHIEX.PEX.PIN
21/12/2007 DATED G ORDER NO.
17/10/2007 MCS/NHA-1664
DATED
27/12/2007
(EX.P-10) (EX.PW-1/9) (EX.PW-1/8)
9. 2007241 DATED C07165 HKG49171NHA
26/12/2007 DATED DATED
06/09/2007 15/01/2008
(EX.P-11) (EX.PW-1/11) (EX.PW-1/10)
10. 2007246 DATED C07116 HKG49173NHA
26/12/2007 DATED DATED
22/06/2007 15/01/2008
(EX.P-13) (EX.P-14) (EX.PW-1/13)
11. 2008052 DATED C08041 DATED
26/05/2007* DATED 08/05/2008
29/02/2008
C08042
DATED
29/02/2008
(EX.PW-1/14) (EX.PW-1/16) (EX.PW-1/15)
& (EX.PW-
1/17)
*(BOTH
AGREEMENTS
C08041 &
C08042
RELATE TO
INVOICE
EX.PW-1/14)
12. 2008092 DATED C08055 HKG64104NHA
19/08/2008 DATED DATED
14/04/2008 11/08/2008
(EX.PW-1/18) (EX.PW-1/20) (EX.PW-1/19)
13. 2008181 DATED C08145 MNNSA395998
30/12/2008* DATED DATED
22/10/2008 17/01/2009
(EX.P-16) (EX.PW-1/22) (EX.PW-1/21)
*(BOTH
INVOICES
EX.P-16 AND
EX.PW-1/23
RELATE TO
THE SAME
AGREEMENT
EX.PW-1/22)
14. 2009042 DATED C08145 MNNSA406508
20/05/2009* DATED DATED
22/10/2008 28/03/2009
(EX.PW-1/23) (EX.PW-1/22) (EX.PW-1/24)
*(BOTH
INVOICES
EX.P-16 AND
EX.PW-1/23
RELATE TO
THE SAME
AGREEMENTE
X.PW-1/22)
12. Suffice it to state that the goods were shipped from the foreign shores
and the bills of lading are in the name of the defendant No.1 as the
consignee. The receipt of the goods has not been denied in the written
statement filed, and as noted above, the defence set up was that the
defendant No.1 was appointed as a sole selling agent. Thus,
notwithstanding there being no bill of lading proved for the invoice Ex.P-9
and the agreement Ex.PW-1/7 relatable thereto, we concur with the view
taken by the learned Single Judge that the plaintiff has established delivery
of all the goods as per the 14 invoices to the defendant No.1.
13. Concerning the agreements relatable to the invoices we note that the
counsel for the plaintiff who drafted the plaint was off the mark when in the
plaint it was pleaded that pursuant to four agreements the goods were
supplied. The exhibited documents which we have tabulated under the
caption AGREEMENT NUMBER in paragraph 9 above would evince that
the plaintiff was sending fax messages to the defendant No.1 containing the
terms of the offer on which the goods were to be supplied requiring
defendant No.1 to sign the fax message in token of acceptance of the terms
of the offer and fax back the signed offer sent. Only 3 such offers sent by
fax : Ex.P-4, Ex.P-6 and Ex.P-14 have been admitted by defendant No.1 and
we find that Ex.PW-1/22 being the fourth has been duly proved by the
plaintiff and indeed it is a signed copy of the fax sent by the representative
of defendant No.1 to the plaintiff. Other faxes containing terms of offer,
which we have listed under the caption AGREEMENT NUMBER in the
tabular chart in para 9 above have been proved by the witness of the plaintiff
and we find that in cross-examination no attempt has been made to demolish
the testimony of said witness qua said aspect of the matter. That apart, it is
settled law that acceptance of the goods sent pursuant to an offer which may
not have been formally acknowledged and accepted would be an acceptance
of the offer. Further, the defendants not having denied receipt of the goods
but having claimed the status of an agent shifted the onus on the defendants
to prove agency. Thus, the receipt of the goods and the price thereof has
been rightly held by the learned Single Judge to have been proved.
14. On the defence that defendant No.1 was appointed as an agent, the
plea is extremely vague. What were the terms of the agency? None have
been stated. No document has been filed to prove the agency, let alone the
terms thereof. The invoices and the agreements clearly establish that the
goods were sold on principle to principle basis. Not even a suggestion has
been put to the witness of the plaintiff that the defendant No.1 was
appointed as an agent and goods were delivered to it as an agent. The
defendants have not even dared to prove the account books of defendant
No.1 which would be the best evidence to show how the defendant No.1
accounted for the goods. We find, a fact noted by the learned Single Judge
that during cross-examination, the witness of the defendant did not deny
document exhibited as X and Y, which are the photocopies of the balance
sheet of defendant No.1, in which plaintiff's name is shown as a sundry
creditor and the value of the goods received shown as the outstanding debt.
15. We therefore concur with the view taken by the learned Single Judge
that the plaintiff would be entitled to the value of the goods as per the price
disclosed in the invoices. Total value of the invoices is US$ 2,94,398.68
(US Dollar Two Lacs Ninety Four Thousand Three Hundred Ninety Eight
and Cents Sixty Eight only). US$ 86,359.03 (US Dollar Eighty Six
Thousand Three Hundred Fifty Nine and Cent Three only) have been
admitted to have been remitted. The balance comes to US$ 2,08,039.65 (US
Dollar Two Lacs Eight Thousand Thirty Nine and Cents Sixty Five only).
This would be the amount payable as per the plaint.
16. Pre-suit interest @ 18% has been claimed on this sum before it was
converted, for the purposes of Court fee, into Indian rupees.
17. Now, either the plaintiff would be entitled to interest as per LIBOR
rate because the payment had to be made in US dollars or after converting
US$ 2,08,039.65 (US Dollar Two Lacs Eight Thousand Thirty Nine and
Cents Sixty Five only) into Indian rupees, the pre-suit interest had to be
calculated as per the Interest Act, 1978, which would entitle the plaintiff to
interest at the rate offered by Scheduled Banks on fixed deposit because the
invoices nor the proved agreements stipulate any rate of interest payable.
18. So converting, on the principal sum of US$ 2,08,039.65 (US Dollar
Two Lacs Eight Thousand Thirty Nine and Paisa Sixty Five only) the
plaintiff would be entitled to Indian `96,75,508.04 (Rupees Ninety Six Lacs
Seventy Five Thousand Five Hundred Eight and Paisa Four only) and pre-
suit interest @ 8% per annum would come to `18,44,973.59 (Rupees
Eighteen Lacs Forty Four Thousand Nine Hundred Seventy Three and Paisa
Fifty Nine only). Total would be : `1,15,20,481.63 (Rupees One Crore
Fifteen Lacs Twenty Thousand Four Hundred Eighty One and Paisa Sixty
Three only).
19. This takes us to the issue of liability of the Directors and perhaps
issue No.3 : whether the suit is bad for misjoinder of parties.
20. A word on the issue settled. A suit cannot be good or bad for joinder
or misjoinder or non-joinder of parties. On account of misjoinder of parties
a suit may not be maintainable qua those whose presence would be a case of
misjoinder. The parties clearly understood the issue to mean : whether the
Directors of the defendant No.1 are personally liable for the debts of the
defendant No.1 company.
21. With reference to the decisions reported as AIR 1973 SC 1104
Official Liquidator Supreme Bank Ltd. Vs. P.A.Tendolkar, AIR 1983 SC 188
Official Liquidator Vs. Parthasarathi Sinha & Ors., and (2015) 4 SCC 609
Sunil Bharti Mittal Vs. Central Bureau of Investigation, the learned Single
Judge has held that Directors of a company may be liable for the acts of a
company.
22. Now, the decision in P.A.Tendolkar's case concerned initiation of
misfeasance proceedings against the Director of a company, and it is settled
law that for acts of malfeasance and misfeasance the Directors would be
personally liable. The second judgment in Parthasarathi Sinha's case
(supra) concerned continuation of malfeasance proceedings initiated against
Directors of a company against the legal heirs on the death of the Director.
The last in Sunil Bharti's case (supra) concerned criminal liability of
Directors who were charged for acting pursuant to a criminal conspiracy.
23. In the plaint there are no averments of malfeasance or misfeasance.
None have been proved. It is not the case pleaded that the Directors stood
personal guarantees. Learned counsel for the plaintiff sought to establish
personal liability through the medium of Ex.PW-1/25, Ex.P-17, Ex.PW-
1/26, Ex.PW-1/27, Ex.PW-1/29, Ex.PW-1/30, Ex.PW-1/31, Ex.PW-1/32,
Ex.PW-1/33, Ex.PW-1/35, Ex.PW-1/36, Ex.PW-1/37, Ex.PW-1/38, Ex.PW-
1/40 and Ex.PW-1/44. None of which establish the Directors of the
company having untaken personal liability to pay.
24. Thus, the appeal is disposed of setting aside the impugned judgment
and decree and dismissing the suit filed by the respondent against appellants
No.2 and 3. The suit is decreed against appellant No.1 in sum of
`1,15,20,481.63 (Rupees One Crore Fifteen Lacs Twenty Thousand Four
Hundred Eighty One and Paisa Sixty Three only together with interest on
the sum of `96,75,508.04 (Rupees Ninety Six Lacs Seventy Five Thousand
Five Hundred Eight and Paisa Four only) @ 8% per annum from the date of
the suit till realization.
25. The parties shall bear their own cost in the appeal.
26. Pursuant to the order dated February 05, 2016 staying operation of the
impugned decreed a sum of Rs.1,66,42,390/- (Rupees One Crore Si) has
been deposited by the appellants in this Court.
27. As agreed between learned counsel for the parties said amount is not
being directed to be paid to the respondent because an issue arises as to who
should be paid the money. Documents filed by the respondent along with
CM No.16654/2016 would evince that the plaintiff company went into
liquidation and this fact was never disclosed in the suit. The documents
would show that Mr.Dirk Van Pamel claims that the debt has been assigned
to OCKHAM B.V.B.A. He claims to be the sole manager of OCKHAM
B.V.B.A. Learned counsel for the respondent states that as per the laws of
Belgium if a company proceeds to liquidation its Directors can continue to
prosecute proceedings initiated for recovery of dues. Further, whether the
assignment has taken place as claimed by Mr.Dirk Van Pamel requires an
adjudication. These issues would be resolved in the execution proceedings
which may be filed by Mr.Dirk Van Pamel. Thus, the Registry is directed to
retain such amount which has been decreed and keep it in a fixed deposit till
the execution proceedings are decided. If the amount deposited is in excess
of the decree passed today the same shall be returned by drawing a cheque
in the name of appellant No.1.
(PRADEEP NANDRAJOG)
JUDGE
(PRATIBHA RANI)
JUDGE
AUGUST 08, 2016
mamta
