Delhi High Court
Delhi Consumers Cooperative ... vs M/S K N R International And Anr on 6 March, 2018
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* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ CS(OS) 3073/2015{CS(COMM) 902/2017}
DELHI CONSUMERS COOPERATIVE
WHOLESALES STORE LIMITED ..... Plaintiff
Through Ms. Madhumeet Kapoor, Advocate
versus
M/S K N R INTERNATIONAL AND ANR .....Defendants
Through None
% Date of Decision: 06th March, 2018
CORAM:
HON'BLE MR. JUSTICE MANMOHAN
JUDGMENT
MANMOHAN, J: (Oral)
I.A. 2572/2018
1. Present application has been filed under Order VIII Rule 10 CPC read
with Order XIII-A of the Commercial Courts, Commercial Division and
Commercial Appellate Division of High Courts Act, 2015. It is pertinent to
mention that the present suit has been filed for recovery of Rs.1,27,37,263/-
along with pendent lite and future interest at 18% per annum. The prayer
clause in the present suit is reproduced hereinbelow:-
"i Pass a decree for a sum of Rs.1,27,37,263/- (Rupees One
Crore Twenty Seven Lacs Thirty Seven Thousand Two
Hundred and sixty Three) against both the defendants.
ii. Pendente lite & future interest @ 18% p.a. till payment
and/or realization, may be awarded in favor of the
plaintiff..
iii. All cost of this suit against the defendants and in favour of
the plaintiff.
iv. Pass such any other relief which this Hon'ble Court deems
fit & proper in the facts & circumstances of the case in
favour of the Plaintiff -Bank and against the Defendants."
2. Since none appeared for the defendants, despite service by way of
publication, they were proceeded ex parte vide order dated 12th December,
2017.
3. The contentions and submissions advanced by learned counsel for the
plaintiff are as under:-
i. The plaintiff is a registered society and an Apex Level Cooperative
organization under Govt. of NCT of Delhi.
ii. The defendant No. 1 is a partnership firm and defendant no. 2 is the
authorized signatory and one of the partners of the defendant no. 1
firm. The defendants are dealers, commission agents, government
suppliers and are engaged in the business of import and export of
pulses, food grains, kirana and dry fruits.
iii. The plaintiff had made an inquiry from various dealers, for
procurement of various items for onward supply to the Army
Purchase Organization, paramilitary and police organizations and
other Government departments.
iv. On 20th March, 1990, the defendant no. 1 sent a proposal to the
plaintiff for registration as the sole supplier of the required items for
the abovementioned organizations. After due compliance, the
defendant no. 1 was taken as the registered supplier of the plaintiff.
v. On 15th June, 1990 the plaintiff and the defendants entered into an
agreement for the supply of pulses. The agreement was valid for a
period of two years and on its expiry it was renewed through letter
dated 16th June, 1992 for one year further.
vi. After renewal, the plaintiff entered into a contract dated 23rd March,
1993, with the Army Purchase Organization, for the supply of 3375
MTS of Dal Chana at the rate Rs. 944/- per Qtls. The contract for
supply of Dal Chana was entered into by the plaintiff on the
assurances of comfortable and undisturbed supply by the defendants
as per the terms and conditions of the agreement.
vii. However, the defendants defaulted in the supply schedule because of
which a request was made to the Army Purchase Organization for
extending the date of supply. The request was accepted by the Army
Purchase Organization and it extended the date of supply up to 31st
August, 1993. The defendants once again failed to supply and due to
non-supply of Dal Channa, the plaintiff could not honour the contract.
This resulted in cancellation of the supply order by the Army
Purchase Organization on 28th September, 1993. Due to previous
default, the plaintiff could not apply for fresh tender floated by the
Army Purchase Organization.
viii. On 06th March, 1997, Sh. Ram Bahadur Addl. Legal Advisor,
Government of India, Ministry of Law was appointed as the sole
arbitrator to arbitrate on the assessment of damages for the non-supply
of goods to the Army Purchase Organization and the arbitration was
initiated. The arbitration matter was defended at the behest, cost and
risk of the defendants, as the defendant no. 2 had submitted an
indemnity bond dated 03rd November, 1995, giving an undertaking to
indemnify the plaintiff for any loss or damage on account of non-
execution of contract with the Army Purchase Organization.
ix. An award was passed on 20th November, 1998, directing the plaintiff
to pay net amount of Rs. 29,88,336.02/- plus interest @ 18% from the
date of the award, after adjustment of earnest money and security
money of Rs. 1 lakh each.
x. After receiving a copy of the award, on 05th March, 1999, the
defendants submitted another undertaking to the plaintiff, to comply
with the terms of the indemnity bond and agreement.
xi. The defendants were under obligation to bear the losses, and vide
letter dated 08th February, 1999, they expressed their desire to file
objection/appeal and also agreed to bear the costs of litigation for
challenging the award. Accordingly an appeal was filed before this
Court vide OMP 63/1999, which was dismissed vide order dated 15th
December, 2009. The defendants filed an appeal against the aforesaid
order vide FAO(OS) No. 386/2010, which was also dismissed vide
order dated 13th December, 2010. The order dated 13th December,
2010 was challenged by filing of an SLP No. 10018/2011, which was
dismissed vide order dated 18th April, 2011.
xii. Since despite requests, the defendants did not pay the award amount
and interest to the Army Purchase Organization, the plaintiff was
forced to pay a sum of Rs. 98,18,493/- to the Army Purchase
Organization, towards the full and final satisfaction of the arbitral
award. The plaintiff paid the amount in five installments and the last
installment was paid on 29th October, 2013.
xiii. Though the plaintiff served the defendants with a legal notice dated
11th February, 2014 and a reminder dated 19 th May, 2014, requesting
the defendants to pay special damages, which include the complete
amount of the award, interest and legal expenses, yet no response was
received and the defendants
xiv. failed to pay the demanded amount till date.
xv. The defendants are liable to pay to the plaintiff a sum of Rs.
1,27,37,263/- including principal, interest including litigation
expenses, described hereinbelow:-
Principal Amount : Rs. 98,18,493/-
Interest @ 18% : Rs. 27,98,270/-
(1.11.13 to date of filing)
Legal Expenses paid : Rs. 1,20,500/-
4. This Court while dealing with an application under Order VIII Rule
10 CPC in CS(OS) 873/2015 Samsung Electronics Company Limited &
Anr. Vs. Mohammed Zaheeer Trading As M/s. Gujarat Mobiles & Ors.
has culled out the relevant law as under:-
"10. The Supreme Court in C.N. Ramappa Gowda Vs. C.C.
Chandregowda, (2012) 5 SCC 265 has interpreted the Order VIII
Rule 10 CPC as under:-
"25. We find sufficient assistance from the apt observations of
this Court extracted hereinabove which has held that the effect
[Ed.: It would seem that it is the purpose of the procedure
contemplated under Order 8 Rule 10 CPC upon non-filing of
the written statement to expedite the trial and not penalise the
defendant.] of non-filing of the written statement and
proceeding to try the suit is clearly to expedite the disposal of
the suit and is not penal in nature wherein the defendant has
to be penalised for non-filing of the written statement by trying
the suit in a mechanical manner by passing a decree. We wish
to reiterate that in a case where written statement has not
been filed, the court should be a little more cautious in
proceeding under Order 8 Rule 10 CPC and before passing a
judgment, it must ensure that even if the facts set out in the
plaint are treated to have been admitted, a judgment and
decree could not possibly be passed without requiring him to
prove the facts pleaded in the plaint.
26. It is only when the court for recorded reasons is fully
satisfied that there is no fact which needs to be proved at the
instance of the plaintiff in view of the deemed admission by the
defendant, the court can conveniently pass a judgment and
decree against the defendant who has not filed the written
statement. But, if the plaint itself indicates that there are
disputed questions of fact involved in the case arising from the
plaint itself giving rise to two versions, it would not be safe for
the court to record an ex parte judgment without directing the
plaintiff to prove the facts so as to settle the factual
controversy. In that event, the ex parte judgment although may
appear to have decided the suit expeditiously, it ultimately
gives rise to several layers of appeal after appeal which
ultimately compounds the delay in finally disposing of the suit
giving rise to multiplicity of proceedings which hardly
promotes the cause of speedy trial."
11. A Coordinate Bench of this Court in Nirog Pharma Pvt. Ltd.
Vs. Umesh Gupta and Ors., 235 (2016) DLT 354 has held as
under:-
"11. Order VIII Rule 10 has been inserted by the legislature
to expedite the process of justice. The courts can invoke its
provisions to curb dilatory tactic, often resorted to by
defendants, by not filing the written statement by
pronouncing judgment against it. At the same time, the
courts must be cautious and judge the contents of the plaint
and documents on record as being of an unimpeachable
character, not requiring any evidence to be led to prove its
contents.
xxxx xxxx xxxx xxxx
28. The present suit is also a commercial suit within the
definition of the Commercial Courts, Commercial Division
and Commercial Appellate Division of High Courts Act,
2015 and it was the clear intention of the legislature that
such cases should be decided expeditiously and should not be
allowed to linger on. Accordingly, if the defendant fails to
persue his case or does so in a lackadaisical manner by not
filing his written statement, the courts should invoke the
provisions of Order VIII Rule 10 to decree such cases."
12. Another Coordinate Bench of this Court in Satya
Infrastructure Ltd. and Ors. Vs. Satya Infra & Estates Pvt. Ltd.,
2013 III AD (Delhi) 176 has held as under:-
"4. I am of the opinion that no purpose will be served in
such cases by directing the plaintiffs to lead ex
parte evidence in the form of affidavit by way of
examination-in chief and which invariably is a repetition of
the contents of the plaint. The plaint otherwise, as per the
amended CPC, besides being verified, is also supported by
affidavits of the plaintiffs. I fail to fathom any reason for
according any additional sanctity to the affidavit by way of
examination-in-chief than to the affidavit in support of the
plaint or to any exhibit marks being put on the documents
which have been filed by the plaintiffs and are already on
record........."
5. This Court is of the opinion that despite receipt of the legal notice dated
11th February, 2014 and a reminder dated 19th May, 2014, the defendants
have failed to pay the plaintiff the amounts as demanded by the said legal
notice. This Court is further of the view that under the agreement dated 15th
June, 1990 and subsequent indemnities and undertakings executed by the
defendants, the defendants have failed to remit to the plaintiff the complete
amount of the arbitral award and interest due as well as legal expenses.
6. In any event, as the averments in the plaint have not been rebutted by
the defendants nor did they bother to put forth their stand in spite of ample
opportunities given by this Court, they are deemed to have been admitted.
7. Accordingly, the present application is allowed and the suit is decreed
in favour of the plaintiff and against the defendants for Rs.1,27,37,263/-
along with pendent lite and future interest @ 6% per annum. The plaintiff is
also held entitled to actual costs of litigation including lawyer's fees. The
plaintiff is given liberty to file on record the exact cost incurred by it in
adjudication of the present suit. Registry is directed to prepare a decree
sheet accordingly.
MANMOHAN, J
th
MARCH, 06 2018
KA
