Delhi High Court
Flow Cool India Pvt. Ltd. vs Flow Tech Air Pvt. Ltd. on 9 November, 2021
$~J-
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Judgment Reserved on: 24.02.2021
% Judgment Pronounced on: 09.11.2021
+ CS(COMM) 691/2019
FLOW COOL INDIA PVT. LTD. ..... Plaintiff
Through Mr.Naveen Sharma, Adv.
versus
FLOW TECH AIR PVT. LTD. ..... Defendant
Through Mr.Vikas Sharma, Advs.
CORAM:
HON'BLE MR. JUSTICE JAYANT NATH
JAYANT NATH, J. (JUDGMENT)
IA Nos. 17787/2019 & 1954/2020
1. IA No.17787/2019 is filed under Order 38 Rule 5 read with Order 39
Rules 1 and 2 CPC seeking an ex-parte injunction to direct the defendant not
to dispose of or alienate or encumber or part with possession of any assets,
current, fixed, intangible, tangible including moveable and immoveable
properties etc. to the tune of Rs.3,47,18,402.80 except in the ordinary course
of business. Other reliefs regarding the bank accounts of the defendant are
also sought.
2. IA No.1954/2020 is filed under Order 39 Rule 4 CPC seeking to
vacate the order dated 16.12.2019.
3. The accompanying suit is filed by the plaintiff seeking a decree for an
amount of Rs.3,47,18,402.80.
4. It is the case of the plaintiff that the plaintiff company entered into an
arrangement for supply of cooling towers and its components with the
IA Nos.17787/2019 & 1954/2020 in CS(COMM) 691/2019 Page 1 of 5
defendant company, to be subsequently installed by the defendant in
pursuance of its contract with its various customers. It is stated that the
defendant was to provide for the timely release of the amount due and
payable on account of the invoices vide which the goods in question were
supplied. It is urged that despite repeated demands, the defendant has been
dilly dallying and avoiding making payment of the balance due on account
of the invoices. There is an apprehension that the defendant would siphon
off the funds upon receipt from its customers. It is further urged that the
defendant is in the habit of not making payment to its creditors and
systematically siphoning off funds from its bank accounts received from the
debtors.
5. It is further reiterated that the plaintiff has supplied cooling towers in
question to the defendant on the assurance to release the amount forthwith.
Now, with a view to defraud and cheat the plaintiff, the defendant has not
disclosed the receipt of the amounts and avoided making payments on some
pretext or the other. It is further stated that the plaintiff has also deposited
Goods and Services Tax (hereinafter referred to as the 'GST')
corresponding to the invoices raised. The defendant has also confirmed the
receipt and supply of the goods in terms of the invoices by filing a return
under GSTR 2A online on the GST portal. It is urged that the factum of
receipt and supply of goods in question is admitted. Hence, the present suit.
6. The defendant has filed a written statement. In the written statement,
it is stated that the defendant is one of the only four Indian Companies and
approximately 50 world-wide holding a world standard certification in
cooling towers. It is stated that the plaintiff is not a manufacturer of cooling
towers and is engaged in the business of supply and trading of the raw
IA Nos.17787/2019 & 1954/2020 in CS(COMM) 691/2019 Page 2 of 5
materials required for manufacturing of cooling towers. The plaintiff has
been a supplier of certain raw materials, i.e., resin, fiber, cobalt etc. to the
defendant since 2017. The plaintiff has neither the expertise, nor any
facilities for manufacturing cooling towers. It is stated that till 2019, the
defendant made payments to the plaintiff on an "on account" basis and no
invoices were raised by the plaintiff. The defendant and the plaintiff had a
common accountant i.e. Mr.Sabal Singh Rawat, who was responsible for
handling their inter-se transactions and the plaintiff colluded and conspired
with Mr.Rawat to fudge and inflate the account to siphon money out of the
defendant company. In 2019, in the course of an internal review, it came to
the light that there were serious discrepancies in the amounts being claimed
by the plaintiff. The defendant with the help of a reputed chartered
accountant conducted an internal verification and following discrepancies
were identified in the plaintiff's account:
"i. The Plaintiff Company had heavily overstated the value
of the stocks supplied to the Answering Defendant. This was
verified from the purchase invoices from vendor(s) of the
Plaintiff.
ii. The invoices submitted by the Plaintiff were not in line
with the actual materials supplied by the Plaintiff to the
Answering Defendant."
7. It is stated that it was discovered that the plaintiff had been acting in
collusion and conspiracy with Mr.S.S.Rawat and Mr.Biju Joseph (Senior
Production Manager of the defendant) to over bill the defendant and thereby
siphoning off money. The said Mr.S.S.Rawat and Mr.Biju Joseph are said to
have made false entries in the defendant's record in collusion with the
IA Nos.17787/2019 & 1954/2020 in CS(COMM) 691/2019 Page 3 of 5
proprietor of the plaintiff company. It is stated that Mr.Biju Joseph admitted
his part of the conspiracy and tendered his resignation on 04.09.2019. The
defendant has terminated the service of Mr.S.S.Rawat on 10.11.2019. A
police complaint was also filed on 10.09.2019. Para 18 of the written
statement spells out the detailed comments as to the invoices, delivery note
etc. of the plaintiff are wrong. The defendant has also denied that they have
confirmed the receipt and supply of goods in terms of the invoices by filing
a return under GSTR 2A online on the GST portal.
8. I may note that when the matter came up before this court on
16.12.2019 this court recorded that the plaintiff is prima facie entitled to
recovery of a sum of Rs.3,47,18,402.80 and passed an interim order
directing Manager, HDFC Bank, Charmwood Plaza, Upper Ground Floor,
Charmwood Village, Faridabad, Haryana not to release any amount to the
defendant lying in the account except for the payments of salaries and
statutory dues in the ordinary course of business. A similar direction was
also passed to the Manager, Bank of India, Chitranjan Park, New Delhi.
9. On 26.02.2020, the interim order granted on 16.12.2019 was kept in
abeyance.
10. I may also note that the plaintiff had earlier also filed a suit for same
relief being CS(COMM) 555/2019. On 30.09.2019, this court noted as
follows:
"7. Though from a reading of the plaint, it appears that the
claim subject matter of the suit is with respect to specific
invoices but from the documents filed by the plaintiff, it appears
that the claim is for the balance amount due at the foot of the
account.
IA Nos.17787/2019 & 1954/2020 in CS(COMM) 691/2019 Page 4 of 5
8. Such dichotomy cannot be permitted and if overlooked at
this stage, is the root cause for the suits remaining pending
endlessly. Moreover, the plaintiff has instituted this suit as a
commercial suit. I have in Vifor (International) Ltd. Vs Suven
Life Sciences Ltd. 2019 SCC OnLine Del 7514 observed that a
change of attitude at the end of the advocates is required to
make the Commercial Courts Act, 2015 workable. Alas, none
appears to be reading the judgments also."
11. The plaint was rejected. It was clarified that the plaintiff shall be
entitled to sue afresh on the same cause of action.
12. Even now in the present suit, the plaint completely lacks details of
invoices, proof of delivery of goods, and further details. No facts are
narrated specifying as to why the plaintiff has arrived at the figure of
Rs.3,47,18,402.80. A statement of account is filed alongwith list of
documents which seems to be an extract from the ledger account of the
plaintiff. As per the statement of account, a sum of Rs.3,47,18,402.80 is
pending. The statement of account is not signed by the defendant. The same
will have to be proved by the plaintiff.
13. There is nothing to suggest that a prima facie case is made out in
favour of the plaintiff or to suggest that the defendant is seeking to dissipate
the assets to defeat any decree that is likely to be passed in favour of the
plaintiff.
14. There is no merit in IA No.17787/2019. The same is accordingly
dismissed.
15. As far as IA No.1954/2020 is concerned, there is no interim order in
favour of the plaintiff. The same is also disposed of.
JAYANT NATH, J.
NOVEMBER 09, 2021/v
