Delhi High Court
M/S Xact Studio International vs M/S Liwona Sp. Z. O. O on 1 June, 2018
$~
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Reserved on: 13th March, 2018
Date of Decision: 1st June, 2018
+ RFA 849/2016
M/S XACT STUDIO INTERNATIONAL ..... Appellant
Through: Mr. A. J. Bhambhani, Senior
Advocate and Mr. J. K. Srivastava,
Advocate. (M:9810690846)
versus
M/S LIWONA SP. Z. O. O ..... Respondent
Through: Mr. Pradeep Dhingra, Mr. Praveen
Kumar & Mr. Nishant Kumar,
Advocates (M-9430009409).
CORAM:
JUSTICE PRATHIBA M. SINGH
JUDGMENT
Prathiba M. Singh, J.
1. M/s. Liwona S. P. Zoo, a Polish company (hereinafter „Plaintiff‟)
filed the subject suit under Order XXXVII CPC seeking recovery of a sum
of Rs.33,722.95 euros (in Indian Rs.23,78,702/-) and 63,64,740 PLN
currency (Rs.10,77,040/- in Indian rupees) along with interest against M/s.
Xact Studio International through its directors (hereinafter „Defendant‟).
2. The Defendant placed orders with the Plaintiff for printing and
dispatching of books to various customers of the Plaintiff in foreign
countries such as Bellona, Poland, Greece and Turkey. The content of the
books was prepared by the Defendant. The customers were also of the
Defendant. The dispatch of the books was to be made by the Plaintiff from
Poland to the Defendant's customers directly and the payment was to be
received by the Plaintiff from the Defendant.
3. It is the Plaintiff's case that various orders were placed by the
Defendant on the Plaintiff and the invoices were accordingly raised by the
Plaintiff. The books were received by the Defendant's customers but no
payment was made. The details of the invoices are as under:
"
PURCHASE ORDER NO. DETAILS INVOICE RAISED
30.06.2010 I thank God For...- 6 Invoice No.3/08/2010
LIW001- item 1&2 titles"; 30.08.2010
55ways- 7 titles. Amt - EUR 14611.75
Delivery to Greece
30.06.2010 Niezwykle Biografie-6 invoice No. 3527/10
LIW001- item 3 titles. dated 11.10.2010
Delivery to Amt- PLN 44 266. 80
"Bellona", Poland.
30.06.2010 Niezwykle Biografie- invoice No. 3578/10
LIW001- item 3 6 titles. dated 15.10.2010
Delivery to Amt- PLN 19 380.60
"Bellona", Poland.
E-mail dated 05.07.2010 Titles: Puff & Bunn & invoices No.
from Liwona Zajac with Lemm& Sloo 1/08/2010/EUR
Subject: Items to print for "Uzay"; Puff & Bunn Dated 25.08.2010
Turkey & Lemm& Sloo Amt- EUR 10 320.00
"Haberlesme"; &
Bunn & Lemm& Sloo
"Hava Ve
Mevsimler"; & Bunn
& Lemm & Sloo
"Tasitlar"
E-mail dated 05.07.2010 Titles: invoice No.
from Iwona Zajac with Bakalim Taniyalim 2/08/2010/ EUR
Subject: Items to print for "Hayvanlar"; Dated 25.08.2010
Turkey Kalim Taniyalim Amt- EUR 8 791.20
"DenizCanlilari";
Bakalim Taniyalim
"YavruHayvanlar".
"
4. Prior to the filing of the suit various emails were exchanged by which
the Plaintiff demanded payment, however, since no payment was made
despite acknowledging the liability, the present suit came to be filed under
Order XXXVII CPC. Upon the Defendant entering appearance the Plaintiff
filed for summons for the judgment. The Defendant then applied for leave to
defend.
5. In the application seeking leave to defend, the case of the Defendant
is that the Defendant is a proprietary concern of Mr. Rahul Singhal. The
Defendant is engaged in preparing book material on various subjects and
selling the same to its intending clients. It was admitted that in this case
some of the books were sold to customers from Turkey and Greece and that
the Plaintiff is a printing company, which was engaged in the printing of
books. The Defendant claimed that his job was only to introduce his
customers to the Plaintiff after selling the copyright/publishing rights. He
denied that any order was placed by him on the Plaintiff. He claimed to be
the only `connecting medium' or `introducer' between the Plaintiff and his
various customers. It is further pleaded that the claim relating to three
invoices is time-barred. It was further claimed that none of the emails
constituted any acknowledgment.
6. The Trial Court on 29th March, 2016 permitted the Plaintiff to place
on record the certified copies of the invoices and emails etc. pursuant to
which the Plaintiff placed on record self-attested copies of all the invoices
and the emails. The attestation was by the Plaintiff Company with the seal of
the Plaintiff along with a certificate under Section 65-B of the Indian
Evidence Act, 1872.
7. The Trial Court, after perusing the records, heard the leave to defend
application and on 29th August, 2016 dismissed the same. Pursuant thereto
the suit was decreed for a sum of Rs.34,55,742/- along with interest @ 12%
per annum.
8. Before this Court the Defendant has raised several grounds to
challenge the impugned judgment. The grounds raised by the Defendant are
as under:
i) That some of the claims are time-barred.
ii) That the suit is based on photocopies.
iii) That the conditions of Section 65B of the Indian Evidence Act have
not been met.
iv) That the suit is against the sole proprietary concern but the sole
proprietor has not been made a party.
v) That the books were actually delivered to the third parties, who have
not been impleaded in the suit.
vi) That there is no privity of contract between the Plaintiff and
Defendant as the supply was made to parties located in different
countries.
vii) That the interest has been granted on the decreed amount without any
agreed terms.
viii) That there are admitted defects in the goods as is evident from email
dated 25th February, 2011
ix) That the Court lacks territorial jurisdiction.
x) That the plaint is not properly verified & the date of the plaint does
not tally with the verification.
Each of the above grounds is dealt with hereinbelow.
Territorial jurisdiction.
9. According to the Defendant, as per the table contained in the plaint,
the delivery of the goods took place abroad, hence, the Trial Court did not
have the territorial jurisdiction. This plea is without any basis, inasmuch as
the documents on record clearly show that the invoices have been raised
from Xact Studio International based in Delhi. In the leave to defend
application, the Defendant admits that he had made arrangements for the
customers to meet the Plaintiff. He also admits that he introduced his
customers to the Plaintiff. He also admits that the material for the books was
prepared by him on various subjects. Thus, he admits that the contents of the
book belong to him, the clients and the customers belong to him. Without
him having passed the content to the Plaintiff, the book could not have been
published. It is, therefore, clear that the Defendant had a major role and
since the Defendant carries on business in Delhi, the Trial Court had
jurisdiction. The question of jurisdiction being a threshold question, the role
of the Defendant, as admitted in the leave to defend application, is sufficient
to hold that the suit as maintainable against him and for the Trial Court to
hold that it has jurisdiction.
Verification in the plaint and date of the plaint
10. The Defendant has raised an issue that the verification of the plaint is
of 19th July, 2013 whereas above the verification, the date of plaint is stated
as 9th October, 2013. Admittedly, the suit was filed on 9th October, 2013 and
was first listed on 11th October, 2013. The date of verification has been
filled (and correctly so) when the plaint was executed and notarized in
Poland i.e. on 19th July, 2013. The filing date is subsequent to the
verification. The date above the verification is filled when the counsels sign
the Plaint for institution. It is very much possible that after the plaint was
verified, documents were collected and the same was sent to the counsels in
India. There could be a time lag between the verification of the plaint and
filing of the suit. This does not create a defect in the plaint as the plaint is
duly and properly verified.
Suit being based on photocopies
11. This is a suit under Order XXXVII CPC. On the directions of the
Court, the Plaintiff has placed on record the various invoices that have been
raised along with the documents and the purchase orders. The invoices are
duly matched with the purchase orders, which have been placed. The
purchase orders have been placed by the Defendant on the Plaintiff and the
Plaintiff has raised invoices after dispatching the books to the various
customers of the Defendant. The invoices in original would at best be with
the Defendant and not with the Plaintiff and the dispatch documents would
be with the customers. The documents are duly self-attested and there is no
reason to disbelieve them. In these days of commercial transactions, which
are carried on across borders, unless and until a doubt is raised as to the
genuinity of the documents, upholding a mere technical objection that the
original documents are not filed especially when there are other documents,
which prove the existence of the transactions and the genuinity thereof,
would be a very pedantic approach. It is also a fact of which judicial notice
needs to be taken of, that business is no longer conducted with original
invoices and carbon copies. Most invoices are transmitted through electronic
means. On most occasions, there are no original invoices. In the present
case, on the direction of the Court the self-attested documents were filed and
apart from raising an omnibus objection that the original documents have
not been filed, there is nothing specific that has been raised by the
Defendant to challenge the existence, genuinity or validity of the documents.
In fact, as will be evident from the emails, which have been placed on
record, the Defendant admits to the existence of the liability and hence the
insistence of original documents is merely an eye wash objection raised to
delay the proceedings. Moreover, there could be an impossibility for
production of original documents as the commercial invoices would be in
the custody of the Defendant. The documents, showing transport of the
goods, could be with the various carriers or the customers. Under these
circumstances, this Court is of the opinion that insistence on production of
original documents lacks any basis.
Emails not sufficiently proved under Section 65B of the Indian Evidence
Act
12. The Plaintiff has filed on record a certificate under Section 65-B of
the Indian Evidence Act, which reads as under:-
"It is certified that documents/photograph
placed on record i.e. CC No.77487116 is a
computer print out and the same has been
provided to me by the client. The same has
been obtained/developed from my printer
installed at his office at Poland in routine
manner for the purpose of printing. The said
computer was under his lawful control. It is
further certified to the best of my knowledge
that no addition or alteration has been made
with the copy of documents provided from the
extract of electronic record."
13. The same is not signed, however, each of the emails attached with the
certificate duly bear the sign and seal of the Plaintiff Company. The
Defendant does not challenge the fact that his email address is
[email protected] It was also not contended that he did not write these
emails. His argument is that it is not adequately supported by a Section 65-B
certificate. A perusal of the emails on record shows that the original
printouts have been taken by the Plaintiff from their computers in Poland
and each page of the emails has been duly attested by the authorized
signatory. As held in Shafhi Mohammad v. The State of Himachal
Pradesh (2018) 2 SCC 801 (hereinafter „Shafhi‟), the requirement under
Section 65-B is relaxable. The Supreme Court held as under:-
"......................
Accordingly, we clarify the legal position on
the subject on the admissibility of the electronic
evidence, especially by a party who is not in
possession of device from which the document
is produced. Such party cannot be required to
produce certificate under Section 65B(4) of the
Evidence Act. The applicability of requirement
of certificate being procedural can be relaxed
by Court wherever interest of justice so
justifies.
................."
14. Recently, in ICICI Bank Ltd. v. Kamini Sharma & Anr. RFA
297/2016 dated on 31st January, 2018, this Court has held, following
Shafhi (supra) and Anvar P.V. v. P.K. Basheer & Ors. (2014) 10 SCC 473
as under:
"16. There is however some serious re-thinking
required on the manner in which electronic
documents are to be proved. In each case
where electronic documents are involved, it
would be impractical to expect the parties to
produce the primary evidence which would be
the medium on which the document is stored,
considering that electronic documents could be
stored on hard drives, hard disks, CPUs,
micro-processors, cameras, telephones, etc.
Certificates under Section 65B accompanying
the printouts have simply become standard
formats.Cross examination on these certificates
can involve debates on model of computer,
printer, questions as to who took printouts etc.
Courts, therefore, need to take a pragmatic
attitude in these cases. Unless there is a serious
challenge to the electronic documents i.e.,
tampering, forgery, hacking, misuse of an email
address, change in contents etc., usually
printouts of electronic documents ought to be
allowed to be read in evidence. The complex
procedure laid down for proving of electronic
documents can prove to be extremely
cumbersome and can have enormous impact
especially in commercial transactions, as it has
had in the present case.
17. The Code of Civil Procedure, 1908 and the
Evidence Act though have undergone several
amendments over the years, in the area of
production of documents, they continue to insist
on primary evidence being the admissible
evidence. This can result in enormous
injustice, due to delay, in commercial cases. It
is for this reason that in several jurisdictions
the production of original documents is
dispensed with unless there is challenge raised
to the authenticity and existence or contents of
a document. One such example is the Civil
Evidence Act, 1995 in the United Kingdom
which reads as under:
"1995 Chapter 38
8. Proof of statements contained in
documents
(1) where a statement contained in a
document is admissible as evidence in a
civil proceedings, it may be proved -
(a) by the production of that document, or
(b) whether or not that document is still in
existence, by production of a copy
authenticated in such manner as the court
may approve.
(2) It is immaterial for this purpose how
many removes there are between a copy
and the original.
9. Proof of records of business or public
authority.
(1) A document is shown to form part of
the records of a business of public
authority may be received in evidence in
civil proceedings without further proof.
(2) A document shall be taken to form part
of the records of a business or public
authority if there is produced to the court
a certificate to that effect signed by an
officer of the business or authority to
which the records belong.
For this purpose -
(a) a document purporting to be a
certificate signed by an officer of a
business or public authority shall be
deemed to have been duly given by such
an officer and signed by him; and
(b) a certificate shall be treated as signed
by a person if it purports to bear a
facsimile of his signature.
......................."
18. A perusal of the above provisions shows
that copies of documents are acceptable in
Courts and are to be authenticated in the
manner which the Court may approve. Courts
in U.K. can prescribe the manner in which a
document is to be proved, if the copy which is
filed is challenged or questioned. If the records
relied upon are part of the records of a
business or part of the records of a public
authority, the same can be filed along with the
certificate signed by a responsible officer
belonging to the business or the public
authority. Thus, discretion has been vested with
the court to entertain copies of documents and
whether originals need to be insisted upon in
each case."
15. In view of the above legal position, the emails, which have been
placed on record along with the certificate as filed, are held to be sufficient
to prove the genuinity of the emails. The Defendant has not filed any other
version of the emails to show that the emails either have been distorted
manipulated or tempered with. Thus, there is no reason to doubt the contents
of the emails.
The suit is against a sole proprietary concern but the sole proprietor has
not been made a party.
16. The Defendant has raised an objection on the framing of the suit i.e.
that it has been filed against the sole proprietary concern without naming the
proprietor. A perusal of the documents on record shows that in none of the
documents, the Defendant is described as a sole proprietary concern. In
most international jurisdictions, even a sole proprietary concern is a legal
entity on its own and hence it would not be inapposite to state that the
requirement of law in India that the sole proprietor ought to be made a party
to the suit could be in that sense - unusual. Moreover, the trading name of
the sole proprietary concern is Xact Studio International and the memo of
parties says Xact Studio International through its director. Since the exact
constitution of Xact Studio was not known, the term `director' as used in the
memo ought to be construed in wider terms. The Defendant has also placed
on record an amended memo of parties to overcome this objection. This
being a curable defect, the amended memo of parties having been filed, the
defect stands cured. The amended memo of parties is taken on record.
The goods have been delivered to the third party and there is no privity of
contract.
17. A perusal of the pleadings and the documents as also the emails
placed on record show that the Defendant's conduct has been completely
dishonest. The emails placed on record admitted to the liability. One such
email dated 23rd December, 2010 from the Defendant reads as under:
"We hv also v ery hard times
Due to snowing no body is making d payment
Nd wht ur company did with greek and turkish
company s
They r complaining too much nd they r not
making d payment, I m helpless when they will
make d payments than only I can do ur pay
ments
All books frm greek publshr r wet nd not
straight they r shouting ev ry time they got
return ev ry book from christmas sale nd same
wid turkish publisher first u delay ed d
shipment nd u put same pages in the book like
12 nd 13 page r same, they missed there season
nd now they both r deducting 50 percent our
bill nd they will pay next year, u people spoiled
our company image
I can‟t do any thing, I didn‟t know earliear tht
u don‟t know how to make books
SURPRISE!!!!!!!
Rahul"
18. The Defendant actually claimed that his clients were not making
payments to him and they had raised issues about the delayed shipment and
same objections on the books not being the same. He also dishonestly
claimed that they had held back 50% of the bills. The Plaintiff has placed
on record the various communications sent by him to the Defendant calling
upon the Defendant to pay the same, all of which remain unanswered. One
of the envelopes which contain such notice was returned back to the Plaintiff
with the information that the Defendant is travelling abroad and that there is
no information as to when he would be returning. The Plaintiff, upon
receiving such emails from the Defendants, confirmed from the Defendant's
customers that in fact there was no fault in the supplied books and the
supply was made as per the specifications. Four emails received from the
Defendant's customers i.e. Bellona SA of Poland and another customer by
the name Pyramid, read as under:
"I hereby declare, that books of series
"Biografie", 12 titles were produced by
company LIWONA Sp. z o.o. in the year 2010
for publisher Bellona SA according to the
specification within contract with company
XACT. No faults were observed on the supplied
books. Settlement of receivables took place in
October 2010 directly to the company XACT."
.......................
"Dear Sylwia, good morning,
Our publishing house doesn‟t own not even 1
euro to Xact. After the books you mention
below we have published more titles and it‟s all
with full payment.
Of course we have confirmations because we
pay through the bank system but we can‟t send
you anything if the Xact will allow us. We have
sent already an email to them
And we are waiting their reply. If they can Yes
we are in a goodwill to proceed with your
request
Kind Regards,
Dimitris Tziampiris"
19. In fact, the Defendant, in his other emails repeatedly admitted to the
payment and suggested a schedule for the payment in his email dated 17 th
March 2011. The said emails are set out below:
..............................................
"From:[email protected]
Date: 2010-11-24 10:54 GMT+01:00
Subject: Re: Payment for Liwona.
To: Marcin Zysk <[email protected]>,
Iwona ZAJAC <[email protected]>,Sahni
saheb
<[email protected]>,Sahni saheb
<[email protected]>
Its nt like tht my dear tht wht papuga said is d
final words he is nt d king ok
He nd me decided payment terms before
starting printing nd tht was 120 days, ask him
its correct or nt
Nd its his willll he can write whatever he wants
I can‟t stop him, I m just watching my words
So sorry
Rahul
...........................
From: Marcin Zysk
To: rahul singal
Subject: Re: Payment for Liwona.
Sent: Nov 24,2010 3:14 PM
Dear Rahul,
i wish you good trip and safe way home. I
understand well your last e-mail, but I must
write words that come frome mr.Papuga.
Mr. Papuga said:
"90 days ago I gave you invoices. You don‟t
reported any comments and any corrections for
payment terms. I demand immediate payment of
overdue invoices. Zbigniew"
I am sorry for his word "demand".
Best Regards
Martin
............................
2010/11/24 <[email protected]>:
>Hi marcin
>I m on traveling nd I chd d delvry dates of d
goods nd we talked abt 120 days credit nd ur
invoices started due by dec nd than we will
start paying
>Bye
>Rahul
.........................................
From: <[email protected]>
Date: 2011-03-17 12:33 GMT+01:00
Subject: Re: Xact payment schedule
To: Liwona <[email protected]>
Cc: Iwona ZAJAC <[email protected]>
Hi
As discussed wid iwona
We can send you
1000 Euro-end of April 2011
5000 Euro-end of May 2011
5000 Euro-end of June 2011
5000 Euro-end of July 2011
Nd at present I m in abudhabi
Nd more will discuss in may last how to
proceed further
Rahul"
20. The last email above shows that the Defendant agreed to make the
payments in instalments on a monthly basis. The two certificates issued by
the buyers also go to show beyond any pale of doubt that the Defendant was
taking a false stand with the Plaintiff that he had not received the payments
from his customers. Emails of the Defendant go beyond any doubt that he
owed the payment to the Plaintiff and he was giving such reasons only to
avoid making payment. In commercial transactions, of this nature, timely
payment is the essence. The frustration of the Plaintiff is evident from the
emails wherein the Plaintiff wrote to the Defendant that, if overdue payment
is not made, he may go bankrupt. Conduct of the Defendant deserves to be
seriously viewed. The stand that there is no privity of contract between the
Plaintiff and the Defendant is absolutely false as is borne out from the
record. Thus, it is held that the Defendant has clear privity of contract with
the Plaintiff and admitted that he owed money to the Plaintiff.
Claims are barred by limitation
21. All the invoices are of 2010. Within the period of limitation there is a
clear acknowledgment in the email of the Defendant dated 23rd December,
2010 and again on 17th March 2011. Repeated notices have been sent by the
Plaintiff in 2011 i.e. 1st January, 2011 and 13th October, 2011. The suit has
been filed on 9th October, 2013 which is within the three year period from
the date of the email dated 17th March 2011. Thus, all the claims are within
the limitation period.
Defect in goods
22. This is another dishonest defence raised by the Defendant. The
customers of the Defendant have confirmed that the books have been
received as per the specifications and hence there is not even a semblance of
any defect in the books. Except for the bald statement, there is no evidence
to claim that there was a defect in the books.
Interest granted
23. The Plaintiff, which is a Polish Company, has been unnecessarily
made to litigate in India for its legitimate dues for more than almost five
years. The decree passed by the Trial court is upheld with the modification
of interest rate as 8% instead of 12% granted by the Trial Court. The
Defendant is directed to make payment within 8 weeks. If the payment is not
made within the said period, interest would be payable at 12% per annum. In
addition, the Plaintiff is awarded Rs. 1 lakh as costs. The additional court
fees, if any, be deposited by the Plaintiff within 10 weeks. The impugned
judgement and decree is modified. Decree sheet be drawn accordingly.
24. The appeal is, accordingly, dismissed.
PRATHIBA M. SINGH
JUDGE
JUNE 01, 2018/dk
