Delhi High Court
Bci Optical Disc Ltd. vs M/S Spinks India on 17 July, 2017
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ RFA No.622/2017
% 17th July, 2017
BCI OPTICAL DISC LTD. ..... Appellant
Through: Mr. Ankit Jain, Advocate with
Mr. H.D. Khanna, AR of the
appellant.
versus
M/S SPINKS INDIA ..... Respondent
CORAM:
HON'BLE MR. JUSTICE VALMIKI J.MEHTA
To be referred to the Reporter or not?
VALMIKI J. MEHTA, J (ORAL)
C.M. No. 24663/2017 (exemption)
1. Exemption allowed subject to just exceptions.
C.M. stands disposed of.
RFA No.622/2017
2. This Regular First Appeal under Section 96 of Code of
Civil Procedure, 1908 (CPC) impugns the judgment of the trial Court
dated 2.2.2017 whereby the suit of the respondent/plaintiff has been
decreed for a sum of Rs.5,17,345/- along with interest at 6% per
annum on account of the non-payment of price of goods being inks
supplied by the respondent/plaintiff to the appellant/defendant.
3. The facts of the case are that the suit was filed for
recovery of Rs.8,85,883/- inclusive of interest of Rs.1,38,222/- and
sales tax amount of Rs.1,19,229.2/- on account of respondent/plaintiff
selling inks to the appellant/defendant. The relevant orders running
into 16 in number and totaling in value to an amount of
Rs.6,28,431.50/- are referred to in para 2 of the impugned judgment.
The appellant/defendant is pleaded to have issued a cheque dated
7.8.2002 drawn on Oriental Bank of Commerce, G.T. Karnal Road,
Delhi for a sum of Rs.1,11,086/- which was dishonored.
Respondent/plaintiff thereafter served the legal notice dated 9.10.2002
and since the same failed to yield the result the subject suit was filed.
4. The appellant/defendant filed the written statement and
pleaded that the suit be dismissed. The main grounds of defence, and
which are the two grounds which have been urged before this Court,
are, firstly that the appellant/defendant never received the goods and
secondly the Courts at Delhi had no territorial jurisdiction.
5. (i) As regards the issue as to whether the appellant/defendant
had received the goods, the trial court has dealt with this aspect in para
11 of the impugned judgment and which para shows that bills of
supply have been proved and exhibited as Ex.PW1/2 to Ex.PW1/17.
The challan has been exhibited as Ex.PW1/18. The witness of the
respondent/plaintiff PW-1 Sh. Ashwani Mehta deposed that goods
were received by three employees of the appellant/defendant, namely
Mr. Philip Johnson, Sh. Inderjeet Grover and Ms. Sunita and it is not
disputed by the appellant/defendant that these employees were
working with the appellant/defendant in the relevant period and has
denied to work till date. The signatures of these three persons were
identified by PW-3 Sh. Sukh Prasad on the invoices/challans as
regards the delivery of the goods.
(ii) Trial court has rightly held that the case pleaded by the
appellant/defendant that three employees had illegally acted against
the interest of the appellant/defendant was incorrect because neither
any complaint was filed against the said three employees with the
police for any alleged cheating/fraud and which is in fact clear from
the aspect that these employees continued as employees of the
appellant/defendant even after supply of goods and whose
employment continued even during the pendency of the suit. By so
holding, in my opinion, the trial court has not committed any illegality
and perversity because the respondent/plaintiff had discharged the
onus of supply of goods and the suit was hence rightly decreed. The
relevant para 11 of the impugned judgment of the trial court reads as
under:-
"11 .Issue no.2 & 3
Issue no.2:- Whether the plaintiff is entitled to recovery of Rs.8,85,883/- from
the defendant? OPP
Issue no.3:- Whether the plaintiff is also entitled to interest, if so, at what
rate? OPP
As both these issues are interconnected I am taking them both together. PW-3
Sh. Sukh Prasad has stated that he is the regular employee of the plaintiff and
that he works with plaintiff at Delhi and also at Gurgaon. He has stated that he
delivered the goods at premises of the defendant company. He has also stated
that original invoices along with goods were delivered to the defendant and
acknowledgments were taken on the carbon copy of the invoices/delivery
challans. He has also stated that the goods were delivered to Mr.Philip Johson,
Inderjeet and Ms. Sunita who signed the carbon copy of invoices/delivery
challan in acknowledgment of receipt of the goods and that they had signed in
his presence. He has identified the signatures of above said persons on carbon
copies of invoices stating that "invoice no.118 bears the signatures of
Sh.Inderjeet, invoice no. 258 bears the signature of Ms.Sunita and the other
invoices (placed on record) bear the signatures of Philips Johson. He has stated
that he had delivered most of the goods mentioned in the bills placed on record
at Kundli except few. He has stated that he had not received any goods back
from the defendant. He has stated that first invoice used to be prepared and
then goods were taken from the store and loaded in the van or some times on
the two wheeler scooter then he used to deliver the goods to the defendant.
PW-2 Sh Ram Bali has stated that he is the accountant of the plaintiff firm. He
has stated that accounts are maintained in ordinary course of the business as
per standard accounting practice. He has stated that ledger account of
defendant is Ex PW1/26. He has further stated that whatever the goods
supplied by the plaintiff to the defendant company, the same were debited in
the account and whatever payments were made by the defendant company to
the plaintiff company the same were credited in the account. He has further
stated that as per statement of account, a sum of Rs.6,28,431/- is due and
outstanding on 30.09.2002. He has further stated that statement of account of
the defendant is correct. He has stated that he works in Delhi as well as in
Gurgaon. He has admitted that plaintiff has withdrawn amount from the court
of Sh Mukesh Kumar Gupta, Ld MM, Delhi and that the same has been
credited in the ledger account of the defendant. He has further stated that as
per ledger account there is a debit balance of Rs.6,28,000/- approximately in
the books of accounts of the plaintiff. He has also stated that he cannot tell as
to whether this balance is after adjustment of the aforesaid credit of the amount
withdrawn from the court of Sh.M.K.Gupta, Ld MM, Delhi or not.
PW-1 Ashwani Mehta, has stated that he is a partner of the plaintiff firm. He
has stated that upon orders placed by the defendant, the plaintiff sold, supplied
and delivered to the defendant goods including the following goods upon the
terms and conditions agreed to by and between the plaintiff and the defendant.
Sr. Description Item Dated Amount
No. No.
1 White-01CDV-SGX 60 03.05.2002 32,260/-
2 White-01CDV-SGX 66 06.05.2002 21,370/-
3 Process Cyan UV 69 07.05.2002 39,520/-
5185 Process
Magnets 050 UV
32212 Process
Yellow 050 UV
2088 Process black
0505 UV 9034
4 01 White-15 Kg. 74 10.05.2002 22,896/-
5 01 White HFT 81 14.05.2002 17,770.50/-
magnets
6 White-01 CDV-SGX 96 25.05.2002 7,632/-
7 White-01 CDV-SGX 173 30.05.2002 30,528/-
8 Plate offset Toray 118 11.06.2002 1,60,000/-
9 White 01-CDV- 153 01.07.2002 38,140/-
SGX-series
Magenta-SGX
10 White-01 CDV- 166 03.07.2002 42,000/-
SGX/Magenta
11 Plate Offset Toray 182 13.07.2002 1,08,000/-
white 01-CDV-SGX-
series
12 White 01-CDV- 223 02.08.2002 42,000/-
SGX-series
13 Process Cyan UV 232 06.08.2002 36,480/-
5185 Process
Magnets 050 UV
3212 Process Yellow
050 UV 2088
Process black 0505
UV 9034
14 White 01-CDV- 258 21.08.2002 14,000/-
SGX-series
15 White 01-CDV- 275 30.08.2002 5600/-
SGX-series
16 White 01-CDV- 276 30.08.2002 7000/-
SGX-series
Net Total:6,28,431.50/-
The goods supplied by the plaintiff were duly received and consumed by the
defendant. The carbon copy of bills are Ex. PW1/2 to Ex PW1/17. The carbon
copy of the challan dated 15.07.2002 is Ex. PW1/18. He has stated that
defendant did not supply the Sale Tax Forms of Rs.9,93,571/- for the period of
2002-03. He has also stated that sales tax due for period 2002-03 is
Rs.1,19,229 (calculated @ 12% p.a.). He has stated that plaintiff is also
entitled to recover interest @ 18% p.a. on the tax paid by the plaintiff on
demand. He has stated that plaintiff got issued notice dated 23.10.2002 to the
defendant calling upon the defendant to pay Rs. 6,49,304/- including interest
18% per annum and to give Sales Tax Form. He has stated that despite service
of notice, defendant neither paid the said amount nor given the S.T Form. He
has further stated that plaintiff is entitled to recover of Rs.6,28,431/- towards
the principal amount and Rs. 1,38,222/- towards interest component @ 18%
per annum and Rs.1,19,229/- towards sales tax @ 12% per annum of the sales
made in the period 2002-03. He has stated that as per the statement of account
of sum of Rs.6,28,431/- is due and outstanding as on 30.9.2002.
DW-1 Sh M.P.Khurana has stated that he is the manager of defendant
company. He has stated that plaintiff had colluded with defendant's employee
who was supervisor and purchase officer of the defendant company. He has
stated that plaintiff sent false bills and obtained signatures on forged bills from
some unauthorized person/employee. He has stated that in the month of
November 2002, defendant suspected foul play at their Kundli factory as
production of the CD plant had not increased and purchase of printing material
allegedly purchased from the plaintiff was unproportionate to the production
and no printing material was found in the stock. He has stated that in this
regard report was lodged with Kundli police but the plaintiff being the
influential no action was taken by the police. He has stated that thereafter
criminal complaint was filed against the partners of plaintiff firm, their
employee Gurdeep Singh and Krishan Kumar printing supervisor and purchase
officer of the defendant company which is still pending in the court of Judicial
Magistrate First Class, Sonepat, Haryana. He has stated that none of the
documents/orders/bills is signed by any authorized representative of defendant
company and none of the documents bear its rubber stamp. He has stated that
Plaintiff's partner and employee hatched conspiracy with defendant's purchase
officer. He has stated that bills are required to be signed by Authorized
Representative along with rubber stamp of the defendant company, so that the
same can be used as form ST-15 as per Rule 21-A. He has stated that claim
made by the plaintiff regarding sale tax for lack of ST-15 amounting to
Rs.1,19,220/- @ 12% and the interest claimed thereon has got no relevancy as
ST-15 was not required as per provisions of Rule 21-A. He has stated that
plaintiff has become dishonest and has not given credit of the goods returned
which had been duly mentioned on the bills alleged to be issued by the plaintiff
itself. He has stated that malafide of the plaintiff is exposed from its conduct
of not giving adjustment of Rs.1,11,086/- the cheque amount which the
plaintiff received from the court of Sh. M.K. Gupta, LD MM Delhi. He has
stated that there was no such agreement of interest after 45 days or 30 days as
alleged in the plaint. He has stated that no copy of any order has been placed
on record. He has further stated that defendant had not placed any order to the
plaintiff nor the plaintiff sold, supplied and delivered all the goods as
mentioned in the plaint and no bill has been placed on record pertaining to item
no.1 to 7. He has stated that entire account placed on record is forged. He has
stated that no amount is due from the defendant to the plaintiff as the last bill
received by the defendant from the plaintiff is bill no.287 dated 03.9.2002 for a
sum of Rs.2,40,000/-. He has stated that same has been paid vide cheque
no.266730 dated 07.9.2002 for a sum of Rs.1,00,000/- and cheque no.266731,
dated 18.9.2000 for a sum of Rs.1,40,000/- which has been duly acknowledged
by the plaintiff on copy of the ledger account as reference no.237 against the
bill. He has stated that plaintiff has given wrong totaling in the plaint as the
total of the entries does not come to Rs.6,28,431/- but the same come to
Rs.6,25,196/-. He has admitted that invoice Ex.PW1/1 to Ex PW1/17 bears the
correct name and address of his company. He has stated that Johnson Philip
and Inderjeet Grover were working as account clerk in the defendant company
and Ms. Sunita was probably working with the production department of the
defendant company. He has stated that they did not take any action against
these three persons when in the year 2003 a fraud relating to the suit
transactions was discovered by them. He has stated that record relating to
account and ledger of the defendant for the period 2002-03 is missing from the
custody of defendant's counsel at Sonipat and FIR is being registered. It is
also stated that sale tax records were given to their counsel at Sonipat from
where record is missing. On being suggested that goods were received by
Johnson Philip and Inderjeet and Ms. Sunita, he has stated that no action was
taken against them and that they were not made parties to the fraud complaint
filed by the defendant. He has stated that transaction with the plaintiff were
started some time in the year 1989-90. He has expressed his inability to
produce in the court any documents on the basis of which defendant discovered
fraud and filed the complaint. He has admitted that in the year 2002 defendant
company was dealing with the plaintiff. He has also admitted that defendant
company does not have any record to produce before the court to show the
short supply of goods or that goods were of inferior quality. He has also stated
that after receiving notice they never informed the plaintiff that the goods
supplied by the plaintiff were of inferior quality or short in supply. He has
stated that they had informed Ashwani Mehta who assured that he will look
into the matter but they do not have any record of their telephonic talk. Thus it
is clear from the evidence on record as discussed that plaintiff supplied goods
to the defendant through its delivery man PW-3 Sukh Prasad. The delivery
man Sh. Sukh Prasad has also stated that no goods were returned back to him
by the defendant. Defendant has not produced any evidence to establish that
goods supplied by the plaintiff were short in supply or inferior in quality, and
not production of such record has been clearly admitted by DW-1 Sh. M.P.
Khurana. It is pertinent to note that even after the notice dated 23.10.2002
Ex.PW1/21 having been given by the plaintiff to the defendant, the defendant
still did not send any reply in writing to the plaintiff objecting to the
contentions made in the notice regarding supply of the goods of item no 1 to 16
of the value of Rs.6,28,431/-. Two cheques being dated 07.09.2002 bearing
no. 266730 for a sum of Rs.1,00,000/- and second dated 18.9.2000 bearing no.
266731 for a sum of Rs 1,40,000/- paid against the bill no. 287 as mentioned
by the DW-1 Sh. M.P. Khurana are found to have been adjusted in the ledger
account of the defendant maintained by the plaintiff Ex PW1/26.
It is after the above two cheques adjustment plaintiff has arrived at claimed
amount of Rs 6,28,431/- as due from the defendant in the notice dated
23.10.2002 Ex PW1/21. To this notice, defendant has not given any written
reply to the plaintiff objecting to the correctness of the said amount in balance
shown as due from the defendant towards the goods supplied nor has defendant
produced on record any account maintained by it to show as to what exactly is
the correct account of the goods received and payment made. Though
undisputedly defendant has agitated about non adjustment by the plaintiff of
the cheque amount of Rs 1,11,086/- received by the plaintiff from the Court.
This fact has been mentioned in the defendant's WS as also in the statement of
DW-1 Sh. M.P. Khurana. Record reveals that plaintiff has not given
credit/adjustment to the defendant the cheque amount of Rs.1,11,086/- which
the plaintiff had received from the court of Sh. M.K. Gupta, Ld MM, Delhi
during the proceedings u/s 138 NI Act, as the said amount given to the plaintiff
(complainant) given by way of compensation was the amount of the cheque
given by the defendant to the plaintiff so the defendant is entitled to get
adjustment of the said amount as payment and plaintiff is liable for the same.
In that view of the matter considering the material on record I find that amount
of Rs.5,17,345/- (6,28,431-1,11,086/-=5,17,345/-) was due to the plaintiff from
the defendant as on 23.10.2002, the date of giving of the notice."
(underlining added)
6. No worthwhile argument could be raised before this
Court as regards goods not having been received by the
appellant/defendant, and in view of the fact that goods were shown to
have been delivered to the appellant/defendant through its employees
Mr. Philip Johnson, Sh. Inderjeet Grover and Ms. Sunita. Mr. Philip
Johnson and Mr. Inderjeet Grover were working as Account Clerks
and Ms. Sunita was working in production department.
Respondent/plaintiff proved its books of accounts as Ex.PW1/26.
Appellant/defendant failed to reply to the legal notice served upon it
by the respondent/plaintiff. Trial court has therefore rightly decided
issue no.2 against the appellant/defendant.
7. As regards the argument urged before this Court as also
before the trial court as regards the lack of territorial jurisdiction of the
courts at Delhi, the same was subject matter of issue no.1, and the trial
court has rightly held that courts at Delhi would have territorial
jurisdiction inasmuch as payment was made in Delhi. Before me also
it is not disputed on behalf of the appellant/defendant that cheque was
issued by the appellant/defendant at Delhi and realized at Delhi, and
therefore, once payment is made at Delhi, the courts where payment is
made is a court where part of cause of action arises and therefore there
is jurisdiction on the courts at Delhi to try the suit in view of sub-
section (c) of Section 20 CPC and the ratio of the judgment of the
Supreme Court in the case of A.B.C. Laminart (P) Ltd. Vs. A.P.
Agencies, Salem (1989) 2 SCC 163 and which holds that in
contractual matters part of cause of action arises where either the
contract is executed or the contract has to be performed or where the
payment has to be or is made or where breach occurs with respect to
the contract. Accordingly I reject the argument urged on behalf of the
appellant/defendant that courts at Delhi no territorial jurisdiction.
8. There is no merit in the appeal. Dismissed.
JULY 17, 2017 VALMIKI J. MEHTA, J
Ne
