Final Order 1

Order Details: Other
Pdf Text: 1 Order in S/J No.13/20
MHCC010009622020 Presented on : 27/01/2020
Registered on: 27/01/2020
Decided on: 09/02/2022
Duration: Y M D
2 0 13
BEFORE THE CITY CIVIL COURT, GR. BOMBAY
( Court No.14 )
(Presided Over by Sunil U. Hake)
SUMMONS FOR JUDGMENT NO.13 OF 2020
IN
COMMERCIAL SUIT NO.433 OF 2021
(SUMMARY SUIT NO.522 OF 2019)
M/s. Standard Retail Pvt. Ltd.
Having their office at 2/3, Ashok Chambers,
Devji Ratansy Marg, Carnac Bunder,
Masjid (E), Mumbai – 400 009
Through Mr. Himanshu K. Sanghvi. ..Plaintiff
VERSUS
1. M/s. India Steel Works Limited.
Having its business address at India Steel
Works complex Zenith Compound,
Khopoli, Dist. Raigad.
2. Mr. Ashwinkumar Harbanslal Gupta (Abated)
3. Mr. Sudhir Harbanslal Gupta,
Aged – Major, Having business address at
India Steel Works complex Zenith
Compound, Khopoli, Dist. Raigad.
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4. Mr. Bimal Ramanlal Desai,
Aged – Major, Having business address at
India Steel Works complex Zenith
Compound, Khopoli, Dist. Raigad.
5. Mr. Tilak Bajalia,
Aged – Major, Having business address at
India Steel Works complex Zenith
Compound, Khopoli, Dist. Raigad.
6. Mr. Varun Sudhir Gupta,
Aged – Major, Having business address at
India Steel Works complex Zenith
Compound, Khopoli, Dist. Raigad.
7. Mr. Varun Suhir Gupta,
Aged – Major, Having business address at
India Steel Works complex Zenith
Compound, Khopoli, Dist. Raigad.
8. Smt. Dipti Atish Vartak,
Aged – Major, Having business address at
India Steel Works complex Zenith
Compound, Khopoli, Dist. Raigad.
9. Mr. Anant Badjata,
Aged – Major, Having business address at
India Steel Works complex Zenith
Compound, Khopoli, Dist. Raigad.
10. Smt. Kavita Raju Joshi,
Aged – Major, Having business address at
India Steel Works complex Zenith
Compound, Khopoli, Dist. Raigad.
11. Smt. Riddhi Dipakkumar,
Aged – Major, Having business address at
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India Steel Works complex Zenith
Compound, Khopoli, Dist. Raigad.
12. Mr. Deepak Kumar Gaur,
Aged – Major, Having business address at
India Steel Works complex Zenith
Compound, Khopoli, Dist. Raigad. ..Defendants
________________________________________________________
Ld. Advocate Dishya Pandey for plaintiff.
Ld. Advocate Aastha Golecha i/b. Ragini Singh and Associates
for defendant nos.1, 3 to 8 and 10 to 12.
________________________________________________________
ORAL ORDER
(Delivered on 9th day of February, 2022)
Summons for Judgment is for an amount of
Rs.12,28,144.27/ alongwith future interest.
Briefly stated, plaintiff's case, is as under :
2. Plaintiff is a private limited company. It does the
business of supplying iron and steel goods. Defendant no.1 is a
company registered under the provisions of Companies Act.
Defendant no.2 is the Managing Director of defendant no.1
company and defendant nos.3 to 12 are Directors of defendant
no.1 company. Defendant nos.2 to 12 were incharge of the day
to day affairs of the company and they were dealing with
plaintiff during relevant time. In pursuance to the purchase
orders placed by defendants, plaintiff supplied goods of worth
Rs.12,63,99,282/ to defendants. Defendants made part
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payment of Rs.12,45,47,188/ and an amount of
Rs.12,28,144.27/ is outstanding against defendants.
Defendants promised to make payment of supplied goods within
90 days of raising the invoices. They also agreed to pay interest
at the rate of 18% p.a. for delay in payment. Defendants made
part payments to plaintiff and the same has been duly credited
in the defendant’s account maintained by the plaintiff in the
regular course of business.
3. Defendants have not raised any objection regarding
quality, quantity, rates, terms and conditions of the invoices.
However, defendants failed to make the payment of outstanding
amount. Therefore, plaintiff sent legal notice dated 06.03.2018
asking defendants to make the outstanding payment. Inspite of
service of demand notice, defendants failed to make the
payment. Defendants do not have defence. Defendant nos.1, 3
to 8 and 10 to 12 have caused their appearance only to delay
hearing of the suit. By making these submissions, plaintiff
prayed for making the summons for judgment absolute.
4. Defendant no.2 is reported to be dead. Suit as
against defendant no.2 stands abated as per order dated
15.09.2021. Suit proceeded without appearance of defendant
no.9 as he failed to tender his appearance inspite of service of
writ of summons.
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5. Defendant no.1, 3 to 8 and 10 to 12, by filing their
reply affidavit, strongly resisted the summons for judgment. It is
submitted that this Court has no territorial jurisdiction to try and
entertain the suit. Suit is not filed within limitation. Defendant
nos.3 to 12 are Directors of the company. Defendant no.1
company is a separate legal entity. Defendant nos.3 to 12 are
not responsible for the dealings of the defendant no.1 company.
Suit is bad for misjoinder of parties. By making these
submissions, defendants prayed for unconditional leave to
defend the suit.
6. Heard both sides. I have also gone through written
notes of arguments submitted by plaintiff.
7. Ld. Counsel appearing for plaintiff made following
submissions :
(a) Plaintiff carries on business in Mumbai. Defendants
placed orders for supply of goods at Mumbai. Goods were
supplied from Mumbai. Thus, part of the cause of action
took place within jurisdiction of this Court. Therefore, as
per section 20(c) of C.P.C., this Court has jurisdiction to
try and entertain the suit. As per terms of the invoices
also, Courts at Mumbai have jurisdiction to try the suit.
Therefore, the issue of territorial jurisdiction raised by
defendants is frivolous.
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(b) Suit is based upon credit note dated 11.09.2015.
Plaintiff sent notice dated 06.03.2018 asking defendants
to pay outstanding amount. Defendants, by their reply
dated 14.05.2018, illegally denied payment of outstanding
amount. Right to sue accrued after denial of defendant.
Therefore, present suit is well within limitation as per
Article 113 of the Indian Limitation Act. To buttress this
submission, plaintiff relied upon the case of Shakti Bhog
Food Industries Ltd. V/s. The Central Bank of India and
Anr. ( In Civil Appeal No.2514 of 2020 arising out of
SLP (C) No.30209/2017) dated 05.06.2020.
(c) Directors of defendant no.1 company were dealing
with the plaintiff at the relevant time. Therefore, they are
necessary parties to the suit.
(d) Defendants have not denied receipt of goods under
the invoices. Defendants have also not stated that they
have made payment of the supplied goods. Their defence
is based upon frivolous technical issues. Defendants do
not have defence. Their defence is illusory and practically
moonshine. Therefore, plaintiff is entitled for leave to
sign the judgment. Plaintiff relied upon the case of
Mechelec Engineers and Manufacturers V/s. Basic
Equipment Corporation, AIR 1977 SC 577.
8. Ld. Counsel for defendants submits that defendants
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have settled the account and no amount is outstanding against
defendant no.1. Plaintiff contends that suit is based upon credit
note dated 11.09.2015, but, said credit note is not signed by
defendants. Therefore, suit cannot be based upon credit note.
9. Ld. Counsel for defendants further submits that suit
would be governed by Article 15 of the Indian Limitation Act
and not by Article 113 of the Indian Limitation Act. As per copy
of invoice filed on record, plaintiff supplied the goods to
defendants on 13.12.2014. Invoice provides credit limit of 90
days. Suit is not filed within three years after the expiry of
period of credit. It is further submitted that directors of the
company are not personally liable for the breach of contract
unless personal guarantee is involved. Defendants relied upon
the case of Tristar Consultants V/s. Vcustomer Services India
Pvt. Ltd., 2007 SCC OnLine Del 359.
10. It is further submitted that defendants are entitled
for unconditional leave to defend the suit if they raise triable
issue or a reasonable defence. Defendants relied upon the case
of B.L. Kashyap and Sons Ltd. V/s. JMS Steels and Power
Corporation and Anr., 2022 SCC OnLine SC 59.
11. Considered the submissions advanced on behalf of
both sides. Defendants submit that suit is bad for misjoinder of
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parties. They further submit that plaintiff does not have cause
of action to file suit as against defendant nos.3 to 12.
12. Order 1 Rule 9 of C.P.C. provides that no suit shall
be defeated by reason of misjoinder or nonjoinder of parties
and the Court may in every suit deal with the matter in
controversy so far as regards the rights and interest of the
parties actually before it. Thus, suit would not be bad for
misjoinder of parties. Therefore, at this stage, the issue raised
by defendants regarding misjoinder of parties is not required to
be delved into.
13. Defendants submit that this Court has no territorial
jurisdiction to try the suit. Plaintiff relied upon invoice dated
13.12.2014. Address of the plaintiff is mentioned as ‘Carnac
Bunder, Masjid (East), Mumbai’. Thus, goods were supplied
from Mumbai to defendants. Part of the cause of action arose
within the jurisdiction of this Court. Invoice contains a specific
stipulation that all transactions are subject to Mumbai
jurisdiction. Defendants have not disputed receipt of this
invoice. Therefore, this Court would be having territorial
jurisdiction to try the suit.
14. Defendants submit that suit is not filed within
limitation. Plaintiff contends that suit would be governed by
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Article 113 of Indian Limitation Act. Plaintiff relied upon the
case of Shakti Bhog Food (cited supra). This suit was for a
decree for rendition of true and correct account in respect of the
interest charged by the defendant bank. In said suit, application
under Order 7 Rule 11 of C.P.C. was allowed on the ground that
suit was not filed within limitation. Hon’ble Supreme Court
extensively dealt with the scope of Order 7 Rule 11 of C.P.C.
Hon’ble Apex Court considered the averments made in the plaint
for the purpose of deciding the issue of limitation. In said suit,
plaintiff wrote one letter to bank for taking corrective steps
regarding charging of interest amount. Regional office of
defendant bank, by letter dated 09.07.2001, informed the
plaintiff therein that appropriate decision would be taken at the
earliest. Thereafter, defendant bank informed the plaintiff
therein on 08.05.2002 that it has charged the interest amount as
per prevailing rates. Hon’ble Supreme Court pleased to hold
that considering the averments made in the plaint, cause of
action arose on 08.05.2002 and suit would be governed by
Article 113 of Indian Limitation Act.
15. With due respect, facts of the cited case are
different from present case. Article 113 of Indian Limitation Act
is a residuary clause. It is included in PartX of the first division
suit under the heading, ‘Suit for which there is no prescribed
period’. Thus Article 113 of the Indian Limitation Act is a
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provision intended to provide for the omission of any other kind
of suit and it can be invoked only when Limitation Act does not
provide specific period of limitation for the suit. Suit is filed
claiming price of goods sold and delivered to defendants.
Article 15 of the Indian Limitation Act specifically provides three
years period of limitation for the suit claiming price of goods
sold and delivered to be paid for after the expiry of a fixed
period of credit. Plaintiff relied upon invoice dated 13.12.2014.
Said invoice provides credit period of 90 days. Thus, limitation
as provided in Article 15 of the Indian Limitation Act would
begin to run after the credit period provided in the invoice i.e.
after 90 days of 13.12.2014.
16. Plaintiff, in para no.17 of the plaint, pleaded that
payment became due from the date of last repayment of invoice
raised by plaintiff to defendants i.e. on 06.03.2018. Thus,
plaintiff claims that defendants made part payment on
06.03.2018. Plaintiff filed on record ledger account of
defendants. Said ledger account shows that defendants made
last payment on 19.03.2015. Thus, the averments in the plaint
regarding repayment of invoice amount on 06.03.2018 are not
supported by the ledger account filed by plaintiff.
17. As discussed above, tax invoice provides 90 days
credit period for the payment. Defendants were supposed to
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make payment within 90 days of 13.12.2014. As per ledger
account, last payment is made on 19.03.2015. Record shows
that suit is filed on 18.12.2018. Thus, suit is neither filed within
three years of the period of expiry of credit provided under
invoice dated 13.12.2014 nor within three years of the last
payment. Plaintiff in written notes of arguments contended that
defendants replied the legal notice dated 06.03.2018 by their
reply dated 14.05.2018. However, said fact is not pleaded in
the plaint. So also, copy of the reply dated 14.05.2018 is not
filed on record.
18. Plaintiff relied upon the case of Mechelec Engineers
(cited supra). In this case, Hon’ble Supreme Court laid down
the principles applicable to the cases covered by Order 37 of
C.P.C. Defendants also relied upon the case of B.L. Kashyap
(cited supra). This case also deals with the scope of Order 37 of
C.P.C. In this case, Hon’ble Supreme Court also relied upon the
case of ‘Mechelec Engineers’ cited by plaintiff. Hon’ble
Supreme Court pleased to hold,
“Therefore, while dealing with an application seeking
leave to defend, it would not be a correct approach to
proceed as if denying the leave is the rule or that the
leave to defend is to be granted only in exceptional
cases or only in cases where the defence would
appear to be a meritorious one. Even in the case of
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raising of triable issues, with the defendant indicating
his having a fair or reasonable defence, he is
ordinarily entitled to unconditional leave to defend
unless there be any strong reason to deny the leave.
It gets perforce reiterated that even if there remains a
reasonable doubt about the probability of defence,
sterner or higher conditions as stated above could be
imposed while granting leave but, denying the leave
would be ordinarily countenanced only in such cases
where the defendant fails to show any genuine triable
issue and the Court finds the defence to be frivolous
or vexatious.”
19. As held in the case of ‘Mechelec Engineers’ (cited
supra), if defendants satisfied that they have a good defence to
the claim on merits, plaintiff is not entitled to leave to sign the
judgment and defendants are entitled to unconditional leave to
defend the suit. As discussed above, defendants have raised the
issue of limitation. Defendants have a good defence to the claim
on merits as issue of limitation is very much relevant in
determining liability of defendants. Therefore, defendants are
entitled for unconditional leave to defend the suit. In the result,
following order.
ORDER
1. Summons for Judgment No.13 of 2020 is dismissed.
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2. Unconditional leave to defend the suit is granted to
defendant nos.1, 3 to 8 and 10 to 12.
3. Defendant nos.1, 3 to 8 and 10 to 12 shall file their
written statement within 30 days from today.
4. No order as to costs.
5. Summons for Judgment No.13 of 2020 is disposed of
accordingly.
09/02/2022 ( S.U. HAKE )
JUDGE,
CITY CIVIL COURT,
GR. BOMBAY.
Directly dictated on computer : 09/02/2022
Signed on : 11/02/2022
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“CERTIFIED TO BE TRUE AND CORRECT COPY OF THE ORIGINAL
SIGNED JUDGMENT/ORDER”
11.02.2022 at 02.30 p.m.
UPLOAD DATE AND TIME
(AMIT DATTATRAY SHINDE)
COURT TYPIST, COURT NO.14
Name of the Judge HHJ SHRI S.U. Hake
(COURT NO.14)
Date of pronouncement of
judgment/order
09.02.2022
Judgment/order signed by P.O. on 11.02.2022
Judgment/order uploaded on 11.02.2022
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