Nilkamal Bito Storage Systems Pvt ... vs Brahma Auto Industries Pvt. Ltd
2017 Latest Caselaw 3522 Del

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*     IN THE HIGH COURT OF DELHI AT NEW DELHI
%                                      Reserved on: 06th July, 2017
                                       Pronounced on: 24th July, 2017

+     CO.PET. 312/2015
      NILKAMAL BITO STORAGE SYSTEMS PVT LTD
                                                             ..... Petitioner
                           Through :   Mr. Pankaj Bhagat, Advocate
                           versus
      BRAHMA AUTO INDUSTRIES PVT. LTD
                                                           ..... Respondent
                           Through :   Mr. Nishit Kush, Advocate
CORAM:
HON'BLE MR. JUSTICE YOGESH KHANNA

YOGESH KHANNA, J.

1. The petitioner is a private limited company, engaged in the business of manufacturing, purchasing, supplying, distributing and dealing in all kind of extensive range of quality products for food service industry. Respondent is also a company and it purchased the goods from the petitioner vide purchase orders in the year 2012. The goods were supplied through various invoices and the petitioner on 27.11.2012 received a part payment of ₹1,60,000/- vide a cheque leaving the principle balance outstanding of ₹5,17,723/-. It is alleged that vide its correspondence dated 25.10.2013 the petitioner had requested the respondent to pay the balance amount and that in its e-mail dated

09.12.2013 the officials of the respondent rather admitted a sum of ₹5,17,723/- is payable to the petitioner as per their books of account and had even issued the C-form under the provisions of Sales Tax Act having distinctive No.1330326 covering all the invoices raised for the supplies made by the petitioner. It is an admitted fact that by 21.01.2013 and 21.03.2013 all the goods were supplied and installed as per the specifications in the two purchase orders issued by the respondent and the respondent had rather appreciated the effort of the petitioner. On 14.02.2014 the petitioner even visited the factory of the respondent and had replaced issue pellet with steel deck pellet even though it was beyond the scope of the purchase order, but only to maintain good relations. The petitioner had sent various reminders/requisitions to clear the outstanding but to no avail and despite promises by the respondent no payment was made and hence a statutory notice dated 28.03.2015 was sent to the respondent company both at its registered office address and its corporate office address. The notice sent at the registered address returned with remark „left without address; however on 29.03.2015 the statutory notice sent to the corporate office was duly served. Hence this petition.

2. The respondent in his reply took the usual plea that the goods supplied were defective and not upto the mark.

3. I have gone through the contents of the petition as also various documents. The purchase order dated 16.11.2012 (Annexure F) contain a condition that 25% advance shall be payable with the purchase order and 75% within 15 days of completion of installation. The Installation/ Commissioning reports dated 21.01.2013 and 21.03.2013 (Annexure L)

do show the goods were installed and commissioned on the given dates to the satisfaction of the respondent company and it rather lauded the effort of the petitioner by giving remarks "good job done!" Further C-Form (Annexure-O) issued by the respondent bear its rubber stamp and signature of its authorized signatory admitting the details of all invoices raised and the goods received, per such invoices. Further in an e-mail dated 09.12.2013 (Annexure N) the respondent admitted its outstanding balance due to the petitioner to be ₹5,17,723/-. Numerous e-mails were then sent (Annexure N colly) which were never replied and lastly the statutory notice dated 28.03.2015 was sent and in response thereof the respondent sent an e-mail dated 13.04.2015 (Annexure Z) wherein though it did not deny the receipt of the goods; its installation/ commissioning and/or the outstanding but rather stated that promoters are out of the country and shall be returning in end April, 2015 and he will be in touch after discussing the matter with promoters. This e-mail is sent by GM (Operations) of the respondent. Thus, no objection qua quality of goods or its installation was raised even after receipt of statutory notice. However, the respondent company largely rely upon an e-mail dated 21.01.2014 (Annexure R1) filed along with its reply, sent exactly an year after the installation/commissioning and it read as under :

"Dear Mr. Bisht, thanks for your sincere efforts for installing the plastic mesh as a solution, but please understand that the person has to stand inside the pas to lift the material for which it does bend and can break in a few days. Since it is plastic it might even break after sometime.

Please offer a better solution or a support under the plastic mesh so that it does not bend.

Awaiting your reply Regards Divyansh"

4. Admittedly this e-mail was sent a year after the installation and still it only raises an apprehension that the plastic mesh may break. Such an apprehension was even removed by the petitioner as is evident from its e-mail dated 05.03.2014 (Annexure P) wherein the petitioner talks about visiting the Haridwar plant of the respondent on 14.02.2014 and of changing the issue pellet with steel deck pellet and further request for clearing its dues. Even then nothing was paid. The petitioner went on sending requests to the respondent through e-mails but the respondent did not answer.

5. Thus, it is a case where the goods were installed/ commissioned to the satisfaction of the respondent but it neglected to pay the petitioner, despite admitting its liability in its email dated 09.12.2013. The reply/ correspondence show that only an apprehension was raised about the quality of plastic after a year of installation/commissioning but that too was attended to.

6. The learned counsel for the respondent primarily relies upon Section 42 of the Sale of Goods Act, 1930 to claim its right to inspect the goods in reasonable time. However in Lohmann Rausher Gmbh v. Medisphere Marketing Pvt. Ltd. 117(2004) DLT 95 the court observed :

"41. Buyer's right of examining the goods.-

(1) Where goods are delivered to the buyer which he has not previously examined, he is not deemed to have accepted them unless and until he has had a reasonable opportunity of examining them for the purpose of ascertaining whether they are in conformity with the contract.

(2) Unless otherwise agreed, when the seller tenders delivery of goods to the buyer, he is bound, on request, to afford the buyer a reasonable opportunity of examining the goods for the purpose of ascertaining whether they are in conformity with the contract.

42. Acceptance.- The buyer is deemed to have accepted the goods when he intimates to the seller that he has accepted them, or when the goods have been delivered to him and he does any act in relation to them which is inconsistent with the ownership of the seller, or when, after the lapse of a reasonable time, he retains the goods without intimating to the seller that he has rejected them."

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22. Undisputably, goods under first invoice were received in the month of May, 2000 and under the second invoice in the month of September, 2000. Defendant, on receipt of the goods, did not indicate to the plaintiff that the goods were defective till as late as 31.12.2001. This was when the plaintiff had served upon the defendant a legal notice in the month of October, 2001.

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29. The long gap after which goods were ostensibly rejected on the premise that they were defective/sub- standard is clearly fatal to the projected defense in the context of statutory law being Section 41 and 42 of the Sale of Goods Act."

7. Thus, where the goods were installed and commissioned to the satisfaction of the respondent on 21.01.2013 and on 21.03.2013 and where the respondent admitted its liability on 9.12.2013 (Annexure N) but raised only an apprehension after a year of installation which was also attended to, though beyond the scope of the contract and where the respondent rather appreciated the work of the petitioner then its plea per Section 41 that it could not inspect the goods, within a reasonable period of its installation, makes no sense. The facts reveal the respondent is raising this frivolous issue after a year of receiving demand letters and is trying to wriggle out of its liability & thus have neglected to pay without any cogent, substantial or genuine ground.

8. In IBA Health (I) Pvt. Ltd vs. Info-Drive Systems Sdn. Bhd 2010 (10) SCALE 151 the Apex Court has observed:-

"21. If there is no dispute as to the company's liability, the solvency of the company might not constitute a stand alone ground for setting aside a notice under Section 434 (1)(c), meaning thereby, if a debt is undisputedly owing, then it has to be paid. If the company refuses to pay on no genuine and substantial grounds, it should not be able to avoid the statutory demand. The law should be allowed to proceed and if demand is not met and an application for liquidation is filed under Section 439 in reliance of the presumption under Section 434(1)(a) that the company is unable to pay it debts, the law should take its own course and the company of course will have an opportunity on the liquidation application to rebut that presumption.

22. If the debt is an undisputedly owing, then it should be paid. If the company refuses to pay, without good reason, it should not be able to avoid the statutory demand by proving, at the statutory demand stage, that it is solvent.

In other words, commercial solvency can be seen as relevant as to whether there was a dispute as to the debt, not as a ground in itself, that means it cannot be characterized as a stand alone ground."

9. In view of the above, this petition is admitted.

10. Citation be published in the "Statesman" (English edition) and "Jansatta" (Hindi edition) in accordance with Company (Court) Rules, 1959.

11. However, publication of the citation and appointment of the provisional liquidator is deferred and one opportunity is given to the respondent company to pay the amount found already due and payable to the petitioner with interest at the rate of 8% per annum with effect from 29.03.2015 when the statutory notice was served on the respondent company. The amount be paid within one month failing which the petitioner shall be entitled to publish the citation and apply for appointment of the Provisional Liquidator.

12. List for further directions on 10th October, 2017.

YOGESH KHANNA, J

JULY 24, 2017 VLD/RS/DU