Delhi High Court
M/S Mahavir Transmission Udyog ... vs M/S Real Power Utility & Ors. on 21 December, 2016
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Reserved on:10.11.2016
% Decided on: 21.12.2016
+ CS(COMM) 657/2016
M/S MAHAVIR TRANSMISSION UDYOG PVT. LTD ..... Plaintiff
Through: Mr. Vaibhav Jain, Advocate.
versus
M/S REAL POWER UTILITY & ORS. ..... Defendants
Through: None.
CORAM:
HON'BLE MS. JUSTICE DEEPA SHARMA
JUDGMENT
1. The present suit has been filed for recovery of sum of
` 2,35,08,765/- (Rupees Two Crore Thirty Five Lacs Eight Thousand Seven
Hundred and Sixty Five Only) along with the interest. It is submitted that
plaintiff is a company registered under the Companies Act, 1956 having its
registered office in Delhi and is involved in the manufacturing of ACSR
conductors for the past more than 10 years and is enjoying a good
reputation in the market for manufacture of ACSR conductors.
CS (COMM) 657/2016 Page 1
2. Sh. Akshat Jain is the Director of the Plaintiff Company and is fully
conversant with the facts of the present case and is a duly authorized person
of the company to represent the company before this court in this suit.
3. It is submitted that in the March-April 2014, the Defendant Firm
through its Proprietor Mr. Ravinder Garg (Defendant no. 2) and his brother
Mr. Gopal Garg (Defendant no. 3), approached the plaintiff for the purchase
of ACSR Conductor 80 mm2 (Racoon) and placed the order vide Purchase
Order no. Mahavir/PO/2014/01 dated 01.04.2014 (hereinafter referred to
Purchase Order No. 1) and executed an agreement dated 26.04.2014
(hereinafter called "Agreement no. 1"), thereby finalizing the terms and
conditions. The plaintiff company manufactured the said conductors as per
the purchase order no. 1 and the inspection of the manufactured goods were
carried out by surveyor from M/s Tata Projects Limited on behalf of the
defendant firm and thereafter the material was supplied to the defendants as
per demands and accordingly invoices were raised to the defendant firm.
Another agreement dated 27.08.2014 (hereinafter referred to as "Agreement
2") was executed by the defendants with the plaintiff for supply of ACSR
Conductors 50 mm2 (Rabbit). In both the agreements, the following were
the terms and conditions:-
CS (COMM) 657/2016 Page 2
i. The Defendant Firm shall make payments to the Plaintiff
Company within 30 days from the. date of each bill raised by the
Plaintiff Company.
ii. That in case the Defendant Firm is not able to make payments
to the Plaintiff Company within the due date of each bill, then,
the Defendant Firm shall pay interest to the Plaintiff Company @
24 % p.a. compounded monthly.
iii. That in case of any default in payment by the Defendant Firm,
the proprietor of the Defendant Firm i.e. Mr.Ravinder Garg and
Mr. Gopal Garg shall be personally liable to make payments
along with due interest to the Plaintiff Company.
iv. That in case the Defendant Firm is not able to make payments
to the Plaintiff Company within the 30 days from the date each
bill, the Plaintiff Company shall have the right to approach the
courts for recovery of their due amount along with interest.
V. That in case recovery proceeding are initiated by the Plaintiff
Company against the Defendant Firm, then, the Plaintiff
Company shall be entitled to seek a stay order in the release of
the utilization of funds that the Defendant Firm has received
and/or will receive in future from UFIBVN (Panchkula),
DHBVN (Hissar) or any other source. It was further agreed that
the Defendant Firm shall not have any objection to the same.
4. Plaintiff manufactured the ACSR Conductor 50 mm2 (Rabbit) as per
the agreement no. 2 and thereafter the inspection was conducted by the
representatives of DHBVN on behalf of the defendant firm and the material
was supplied to the defendant firm and the invoices were raised as per the
supplies. The total principle amount of ` 2,35,08,765/- in respect of
agreement no. 1 and agreement no. 2 is due which defendants have failed to
pay despite various communications to them. It is submitted that the cause
CS (COMM) 657/2016 Page 3
of action had arisen in Delhi as both the agreements were executed in Delhi
and parties also agreed to the jurisdiction of Delhi in the said agreements.
It was submitted that requisite court fees had been paid. It is prayed that a
decree for an amount of ` 2,35,08,765/- along with interest at the rate of
24% compounded per month from the date the money becomes payable till
the realization of the decretal amount be passed along with cost.
5. The defendants filed their written statements. Defendant no. 1 and
Defendant no. 2 in their written statements have not disputed the agreement
no. 1 and agreement no. 2 and the supply of the goods by the plaintiff to
them. The plea however is that the goods supplied by the plaintiff were of
sub-standard qualities and because of that reason they could not receive any
payment from UHBVN and DHBVN to whom they had supplied the said
material. It is submitted that since the plaintiff had committed breach of the
contract, they are not entitled to any relief and the plaint is liable to be
rejected.
6. Defendant no. 3 has submitted that this Court has no territorial
jurisdiction as no part of cause of action has arisen in New Delhi. The
material was manufactured and supplied from Dehradun. The inspection
and purchase was done in Dehradun, Uttrakhand and that the defendant
CS (COMM) 657/2016 Page 4
resides at Hisar, Haryana. It is further submitted that the plaintiff is guilty
of breach of terms of agreements since the material supplied by the plaintiff
do not meet the technical specifications required by UHBVN and DHBVN.
As a result, they have not received any payment from UHBVN and
DHBVN. It is submitted that the plaint is liable to be rejected.
7. The plaintiff filed the replication to the written statements wherein
the plaintiff had controverted the contentions of the defendants that the
goods supplied were defective. It is submitted that the goods were
manufactured and delivered as per the agreed terms and conditions of
agreement 1 and agreement 2 and that they were not bound by the terms
and conditions agreed between UHBVN/ DHBVN and defendants.
8. The matter was fixed for the admission/denial of the documents.
While the plaintiff had completed their admission/denial of the documents
of the defendants, the defendants stopped attending the proceedings and
their right to admission/denial of the documents was closed on 30.08.2016,
the date on which they had not appeared before the Joint Registrar. The
matter was placed before this court and subsequently on 08.09.2016, the
defendants were proceeded ex-parte. The court ordered for the recording of
ex-parte evidence and subsequently plaintiff had examined one witness Sh.
CS (COMM) 657/2016 Page 5
Akshat Jain as PW-1 by way of affidavit PW 1/A and also exhibited the
documents.
9. I have heard the arguments and perused the relevant record.
10. The plaintiff's witness PW-1 has duly proved on record the board
resolution authorizing Mr. Akshat Jain to represent the company.
Therefore, the plaint has been filed by authorized person on behalf of the
plaintiff.
11. The admitted facts of the case are that the plaintiff and the defendants
had entered into two agreements i.e. agreement 1 and agreement 2 dated
26.04.2016 and 27.08.2014 for supply of Racoon ACSR Conductor 80 mm2
and Rabbit 50 mm2 ACSR .
12. The purchase order dated 01.04.2014 is proved as PW 1 /2 and the
agreement no. 1 dated 26.04.2014 is proved as PW 1/3. The agreement no.2
dated 27.08.2014 is proved on record as PW 1 / 5. The plaintiff has also
proved on record the terms and conditions of the agreements. The plaintiff
has also proved that the goods before supply were duly inspected by the
defendant firm. The copy of inspection reports are proved as PW 1 /4 and
PW-1/6. It is not in dispute that the said material was supplied by the
plaintiff to the defendants.
CS (COMM) 657/2016 Page 6
13. The plaintiff has also proved on record the invoices raised by it as
Ex. PW 1/7. The updated ledger account of the defendant firm in the books
of plaintiff's company is proved as Ex. PW 1/8. Plaintiff has also proved on
record that he had received a notice dated 20.07.2015, whereby the
UHBVN had directed him to be present at the Divisional store UHBVN on
23.07.2015 as the goods manufactured by them and supplied by the
defendants were of sub-standard quality. Copy of this notice was filed by
defendant and admitted by plaintiff during admission/denial as same was
exhibited Ex.D-1. Although, the defendants were also called upon but they
did not appear before UHBVN. The plaintiff appeared and did the
preliminary verification of the goods lying in the store and noted that those
goods were not manufactured by the plaintiff company nor supplied by it to
the defendant company and found that the goods were tampered with.
Although, the markings found on those drums were in accordance with the
packing list of the inspection report QS-WD12UHB254 dated 04.05.2015
but it had been obtained using fraudulent means by Marking contractor of
Real Power Utility, with the intention of causing loss to UHBVN. Although
the defendants have raised the objections that goods supplied by the
plaintiff were of sub-standard quality and that is why the goods were
CS (COMM) 657/2016 Page 7
rejected by UHBVN but the plaintiff has proved on record that before the
dispatch of supply of goods to defendants, goods were duly inspected by
representative of defendants. While the plaintiff has proved all his
contentions, the defendants have not produced any evidence to prove its
contention that the goods supplied by the plaintiff were defective. Plaintiff
has also duly proved that goods lying in store of UHBVN were not the
same goods which were supplied by them to the defendants. It is
noteworthy that the defendants did not even appear before UHBVN when
called upon.
14. The plaintiff has duly proved its case. The plaintiff is therefore
entitled to a sum of ` 2,35,08,765/- along with simple interest at the rate of
12% per annum from the date of filing of the suit till the realization of
decretal amount.
No orders as to cost.
Decree sheet be prepared.
DEEPA SHARMA
(JUDGE)
DECEMBER 21, 2016/sapna
CS (COMM) 657/2016 Page 8
