Delhi High Court

Dara Projects Private Limited vs Business India Exhibitions Pvt. ... on 27 April, 2017

*     IN THE HIGH COURT OF DELHI AT NEW DELHI

%                                           Date of decision:27th April, 2017.

+                        CS(COMM) No.211/2016

      DARA PROJECTS PRIVATE LIMITED              ..... Plaintiff
                  Through: Mr Sanjeev Sindhwani, Sr. Adv. with
                           Mr. Sanjay Dua, Adv.

                                   Versus

    BUSINESS INDIA EXHIBITIONS PVT. LIMITED
    & ANR.                                 ..... Defendants
                  Through: None.
CORAM:
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW

1.

The plaintiff has instituted this suit for recovery of Rs.2,35,30,495.70p

jointly and severally from the defendant No.1 Business India Exhibitions

Pvt. Limited (BIEPL) and defendant No.2 Ashok H. Advani, pleading:

(i) that the defendant No.2 Ashok H. Advani had approached and

represented to the plaintiff that he is the founder and chairman of

Business India Group and the defendant No.1 BIEPL is under his

complete control and he is one of the Directors of the defendant No.1

BIEPL and in exclusive charge and control of the defendant No.1

BIEPL and responsible for the conduct of day to day affairs and

functioning of the defendant No.1 BIEPL;

(ii) that the defendant No.2 called upon the plaintiff to enter into the

business transactions with the defendant No.1 BIEPL and assured the

plaintiff that he would be personally liable and responsible for all acts,

omissions, liabilities etc. of defendant No.1 BIEPL and promised to

stand as guarantor for the same;

(iii) that the defendant No.1 BIEPL is a mere alter ego of the

defendant No.2 which has been created by the defendant No.2 for his

own personal benefit and to evade payment of legitimate dues of the

business associates of the defendant No.1 and to defraud the creditors

of the defendant No.1 BIEPL; the defendant No.2 is the real person

behind the veil and facade of the defendant No.1 BIEPL and is jointly

and severally liable and responsible for the debts and liabilities of the

defendant No.1 BIEPL;

(iv) that with the aforesaid assurances and representations, the

defendant No.2 requested the plaintiff to provide its goods, articles,

services, transport etc. for the various projects, shows and exhibitions

undertaken and organised by the defendants;

(v) that the plaintiff, believing the aforesaid assurances and

representations of the defendant No.2, provided to the defendants the

services of installation of outdoor superstructures, air-conditioning of

superstructures, stall constructions, general lighting, furniture, panels,

carpeting, wooden platforms, landscaping etc. as ordered by the

defendants from time to time and the defendants were completely

satisfied with respect thereto;

(vi) that the defendants have been making on-account payments to

the plaintiff for the bills / invoices raised by the plaintiff from time to

time;

(vii) that the plaintiff has been maintaining an open and running

account of defendant No.1 BIEPL in this regard;

(viii) that the ledger statements of the defendant No.1 BIEPL for the

financial year 2007-2008 till 2013-2014 containing entries of the

transactions during the said financial years are filed before this Court;

(ix) that for the financial year 1st April, 2012-31st March, 2013, the

ledger account maintained by the plaintiff reflects an opening debit

balance of Rs.2,24,03,781/-;

(x) that the defendants made certain on-account payments in

acknowledgement of their liability towards the plaintiff, the last of

such payments being the payment of Rs.1,96,000/- vide cheque

bearing No.0868588 dated 16th March, 2013 drawn on HDFC Bank;

(xi) that the plaintiff thereafter raised another invoice dated 26th

March, 2013 for an amount of Rs.21,59,117/-;

(xii) that after duly crediting the payments made by the defendant

No.1 BIEPL during the financial year 2012-2013, there was a closing

debit balance of Rs.2,35,30,495.70p as on 31 st March, 2013 and which

the defendants have failed pay inspite of repeated reminders and

assurances to pay;

(xiii) that the defendant No.1 BIEPL, with regard to part of the

aforesaid amount payable to the plaintiff has even deposited Tax

Deducted at Source (TDS) and issued TDS certificates without

actually making the full payment to the plaintiff; such act of the

defendant No.1 BIEPL tantamount to admission of its liability towards

the plaintiff;

(xiv) that it is now apparent that the defendant No.2 Ashok H. Advani

has played a fraud upon the plaintiff;

(xv) that the plaintiff got served on the defendants a legal notice

dated 8th February, 2016 demanding the payment but the defendants

have not responded thereto also;

(xvi) that the defendants have been notified in the legal notice that

they would be liable to pay interest on the outstanding @ 24% per

annum; accordingly, the plaintiff besides the sum of

Rs.2,35,30,495.70p, is also entitled to pendente lite and future interest

at the said rate.

2. The suit was entertained and summons thereof ordered to be issued to

the defendants. The order dated 9th May, 2016 of the Joint Registrar records

that both the defendants had been served by registered post A.D.; though

none appeared for the defendants before the Joint Registrar on 9 th May,

2016, written statement was awaited. None appeared for the defendants

before the Joint Registrar on 12th August, 2016 also and accordingly the suit

was ordered to be listed before the Bench on 7th October, 2016.

3. None appeared for the defendants on 7th October, 2016 also. Though a

formal order proceeding ex-parte against the defendants remained to be

passed on that date but it was the contention of the senior counsel for the

plaintiff on 7th October, 2016 that this being a commercial suit, is entitled to

be decreed without requiring the plaintiff to lead ex-parte evidence.

4. The defendants are now formally proceeded against ex-parte.

5. It was enquired from the senior counsel for the plaintiff on 7th

October, 2016, as to how the suit claim was within time.

6. The senior counsel for the plaintiff contended that the last payment

made by the defendant No.1 BIEPL to the plaintiff was on 16 th March, 2013

and this suit was instituted on 14th March, 2016 and listed first before the

Joint Registrar on 16th March, 2016. Reference was also made to the

judgment of the Division Bench of this Court in Bharath Skins Corporation

Vs. Taneja Skins Company Pvt. Ltd. 2012 (186) DLT 290 to contend that

Article 113 of the Schedule to the Limitation Act, 1963 would apply.

7. Qua the claim of the plaintiff against the defendant No.2, the senior

counsel for the plaintiff contended that though according to him the plaintiff

was not required to be relegated to ex-parte evidence but if this Court felt the

need therefor, the plaintiff was willing.

8. The senior counsel for the plaintiff on 7th October, 2016 also informed

that out of the plaintiff's claim of Rs.2,35,30,495.70p, liability in the sum of

Rs.1.60 crores stood admitted by issuance of TDS certificates.

9. After hearing the senior counsel for the plaintiff on 7 th October, 2016,

orders in the suit were reserved.

10. The plaintiff, along with the plaint has filed photocopies inter alia of

the ledger account maintained by the plaintiff of the defendant No.1 BIEPL

and referred to in the plaint, copies of the bills raised by the plaintiff on the

defendant No.1 BIEPL from time to time and copies of TDS certificates

issued by the defendant No.1 BIEPL to the plaintiff from time to time.

11. The contents of the plaint, as per the procedure prescribed, are

supported by an affidavit and is accompanied with a statement of truth by

way of affidavit on behalf of the plaintiff.

12. I am of the view that in such circumstances, no purpose is served by

requiring the plaintiff to lead ex-parte evidence which is nothing more than a

repetition of the contents of the plaint. I have already in Satya Infrastructure

Ltd. Vs. Satya Infra & Estates Pvt. Ltd. 2013 SCC Online Del 508 held that

in such cases, the plaintiffs are not required to be relegated to ex-parte

evidence and have consistently been taking the said view. Thus, the case of

the plaintiff has been evaluated on the basis of the contents of the plaint and

the documents filed therewith.

13. This Court in Saurabh Exports Vs. Blaze Finlease & Credits Pvt.

Ltd. (2006) 129 DLT 429 has held that on the pleas as made in the plaint, a

case of piercing the corporate veil is made out. Thus, in the event of any

amounts being found due to the plaintiff from the defendant No.1 BIEPL, the

decree against the defendant No.2 for the said amount, jointly and severally

with the defendant No.1 BIEPL, will also follow.

14. The defendants having chosen not to contest the suit and rebut the case

of the plaintiff, the plaintiff on the basis of the pleadings and the documents

has made out a case for a decree for recovery of money.

15. Qua the aspect of limitation, a perusal of the ledgers for the different

financial years shows the following amounts to be due from the defendant

No.1 BIEPL to the plaintiff at the end of the financial year indicated

thereagainst:

Financial Year Amount Due (Rs.) 2007-2008 86,30,351.01 2008-2009 1,82,37,315/-

                 2009-2010       2,14,38,563/-
                 2010-2011       2,24,53,781/-
                 2011-2012       2,24,03,781/-
                 2012-2013      2,35,30,495.70

16. The Article of the Schedule to the Limitation Act applicable to the

services claimed to have been provided by the plaintiff to the defendants, in

my opinion, would be Article 18 i.e. a suit for the price of work done by the

plaintiff for the defendant at the request of the defendant, where no time is

fixed for payment, limitation provided wherefor is three years commencing

from the date when the work is done. Applying the said Article 18, the bulk

of the claim of the plaintiff in the suit would be barred by time.

17. The plaintiff however relies on the account maintained by it of the

defendant No.1.

18. Article 1 of the Schedule to the Limitation Act providing for suits

relating to account, however would also not be attracted, the account being

not a mutual one.

19. However, the Division Bench of this Court in Bharath Skins

Corporation supra has held that where the account between the parties is an

open, running and non-mutual account, as is in the present case also, there

being no Article in the Schedule to the Limitation Act dealing with suits for

recovery of due on a open, current and non-mutual account, the residuary

Article vis Article 113 would apply and the period of three years would

begin running from the date when the claim is denied in response to the legal