Final Order 1

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MHCC010009632020 Presented on : 27/01/2020
Registered on: 27/01/2020
Decided on: 22/12/2021
Duration: Y M D
01 10 26
BEFORE THE CITY CIVIL COURT, MUMBAI
( Court No.14 )
(Presided Over by Sunil U. Hake)
SUMMONS FOR JUDGMENT NO.12 OF 2020
IN
COMMERCIAL SUIT NO.443 OF 2021
(SUMMARY SUIT NO.262 OF 2019)
M/s. Standard Retail Pvt. Ltd.
Having their office at 23,
Ashok Chambers, Devji Ratansy Marg,
Carnac Bunder, Masjid East, Mumbai 400009.
Through Mr.Himanshu K.Sanghvi ..Plaintiff
VERSUS
1. M/s. Bagherwal Electrodes Pvt. Ltd. and Ors.
Registered Office: 71, Usha Ganji, Vaibhav Chambers,
Chhawani, Indore Madhya Pradesh 452001.
Corporate Office: 354/1, 356/3 Nemawar Road,
AsrawadBujurg 44 B, Mangal Udyog Nagar
Palda, Indore Madhya Pradesh 452001.
2. Mrs.Purnima Bagherwal
Adult, 28, Kailash Park Colony, Near Geeta Bhavan,
Indore Madhya Pradesh 452001.
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3. Mrs.Anita Bagherwal
Adult, 28, Kailash Park Colony,
Indore Madhya Pradesh 452001.
4. Mr.Pawan Bagherwal
Adult, 28, Kailash Park Colony, Near Geeta Bhavan,
Indore Madhya Pradesh 452001.
5. Mr.Tarun Bagherwal
Adult, 28, Kailash Park Colony, Near Geeta Bhavan,
Indore Madhya Pradesh 452001.
________________________________________________________
Ld. advocate Shreyas Shrivastava for plaintiff
Ld. advocate Twinkle Khemka i/b Khemka and Associates for
defendant Nos.1 to 3 and 5
________________________________________________________
ORAL ORDER
(22 nd day of December, 2021)
Summons for Judgment is taken out by plaintiff for
an amount of Rs.3,90,448/ alongwith future interest.
Plaintiff's case is as follows :
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 Nos.2 to 5 are directors of defendant No.1company.
They are responsible for day to day affairs of the company. In
pursuance to the purchase orders placed by defendants, plaintiff
supplied goods to defendants on 12/11/2014. Defendants
accepted the goods without raising any issue regarding quality
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and quantity of the goods. Defendants also claimed benefit of
VAT and Excise duty from the concerned departments.
Defendants made part payment of the delivered goods. An
amount of Rs.3,90,448/ is outstanding against defendants.
Plaintiff sent notice dated 20/07/2018 asking defendants to pay
the outstanding amount. Defendants received the notice. By
sending email dated 30/11/2018, defendants accepted receipt
of goods and also acknowledged that the amount mentioned in
the notice is due against them. Defendants failed to pay the
outstanding amount. They have no defence. Appearance is
caused only to delay passing of the decree. By making all these
submissions, plaintiff prayed to allow the Summons for
Judgment.
3. During the pendency of the suit, defendant No.4
Pawan passed away. Plaintiff failed to take further steps,
therefore, suit as against defendant no.4 is abated as per order
dated 21/10/2021.
4. Defendant Nos.1 to 3 and 5 resisted the Summons
for Judgment by filing their reply affidavit. It is submitted that
plaintiff and defendant No.1 are in business relationship since
the year 2000. Defendant No.1 is purchasing material from
plaintiff. As per business practice, defendant No.1 used to make
payment after receipt of the goods. Plaintiff supplied steel wire
rod/coils weighing 20.520 Metric Tonnes. It was difficult to
know Chemical Composition of the received goods until finished
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goods are prepared from the supplied goods.
5. Defendant No.1 received the goods on 12/11/2014.
Due to previous relationship, defendant No.1 made part
payment of Rs.3 lacs on 25/11/2014. Further payment of Rs.3
lacs was made on 31/03/2015. However, before the balance
payment, Quality Assurance Department of defendant No.1
intimated that quality of the supplied goods was not up to the
mark. Defendant No.1's representative raised the issue of
quality of goods with plaintiff. However, plaintiff did not give
any response. Defendants suffered huge losses due to the poor
quality of the supplied goods. Defendants lost their goodwill
and reputation due to the poor quality of supplied goods. Suit is
not maintainable under order 37 of C.P.C. as it is not based
upon a written contract. By making these submissions,
defendants prayed to dismiss the Summons for judgment.
Oral arguments :
6. Ld. Counsel for plaintiff made following
submissions :
(a) In pursuance to the purchase orders placed by defendants,
plaintiff supplied the goods. Defendants accepted the goods
without raising any objection regarding quality of goods.
Defendants made part payment of the goods after four months
of the receipt of goods. At that time also, defendants did not
raise any objection regarding quality of goods. The defence of
inferior quality of goods is after thought. Defendants did not
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return the goods. Defendants did not make any objection
regarding quality of the goods. Onus to prove that the goods
were of inferior quality lies upon defendants. Mere averments
regarding inferior quality of goods would not be sufficient. Such
averments must be supported by cogent material on record. To
buttress these submissions, plaintiff relied upon following
judicial pronouncements :
(a) Naraingarh Sugar Mills Ltd V/s Krishna Malhotra,
MANU/DE/1447/2012
(b) Jatin Koticha V/s VFC Industries Pvt. Ltd.,
MANU/MH/1363/2007
(c) Mechelec Engineers & Manufacturers V/s Basic
Equipment Corporation, MANU/SC/0043/1976
(b) It is further submitted that plaintiff supplied goods
to defendants under invoices. Defendants accepted the goods.
It amounts to a written contract. Hon'ble Bombay High Court in
case of Jatin Koticha (cited supra) held that suit based upon
invoices coupled with supply of goods would be a suit based
upon written contract. Defendants have failed to raise the
triable issue. Defendants in their reply affidavit admit that an
amount of Rs.3,90,448/ was due against them. As per second
proviso to Order 37 Rule 3(5) of C.P.C., leave to defend the suit
cannot be granted unless the amount so admitted to be due is
deposited by defendants in Court.
7. Advocate for plaintiff also relied upon email
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communication dated 30/11/2018. It is submitted that by
sending email dated 30/11/2018, defendant No.4 accepted that
an amount of Rs.3,90,448/ is due against defendants.
Defendant no.4 also assured to clear the dues before November
2011.
8. Plaintiff further relied upon the case of Mechelec
Engineers & Manufacturers (cited supra) wherein Hon'ble Apex
Court laid down the guidelines to deal with application of leave
to defend the suit under Order 37 of C.P.C.
9. Ld. Counsel for defendant Nos.1 to 3 and 5
contravened above arguments with following submissions :
(i) Defendant No.1 received the goods weighing
20.520 metric tonnes. It was practically impossible to know
chemical composition of supplied goods until supplied goods is
used for manufacturing finished goods. Due to previous
relationship between the parties, defendants made part payment
of the supplied goods on 25/11/2014. Defendants also made
further part payment of Rs.3 lacs on 31/03/2015. However,
before the third and final payment of the balance amount of
Rs.3,90,448/, Quality Assurance Department of defendant No.1
intimated that quality of the supplied goods was not up to the
mark. Thereafter, defendants raised said issue with plaintiff and
withheld the balance payment. Due to inferior quality of the
supplied goods, defendants suffered losses.
(ii) It is further submitted that defendants raised the
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issue which requires trial and therefore, they are entitled for
unconditional leave to defend the suit. Defendants also relied
upon following judicial pronouncements :
(a) M/s. Mechelec Engineers & Manufacturers V/s M/s.
Basic Equipment Corporation, 1977(1)SCWR 287.
(b) IDBI Trusteeship Services Ltd. V/s Hubton Ltd., 2017
1 SCC 568.
(c) Sudin Dilip Talaulikar V/s Polycap Wires Pvt. Ltd. and
others, Civil Appeal 5528/2019 dated 15/07/2019.
(d) M/s. Uma Shankar Kamal Narain and Anr V/s M/s.
M.D. Overseas Ltd, 2007(2) Apex Court Judgments(SC) 734.
10. Considered the submissions advanced on behalf of
both sides. The cases of M/s. Mechelec Engineers and IDBI
Trusteeship Services Ltd. (cited supra) deal with Order 37 of
C.P.C. and provide guidance for exercising discretion in dealing
with application of leave to defend the suit.
11. Defendants further relied upon the case of M/s.
Umashankar (cited supra) and submitted that the defendants
raised triable issues and therefore, entitled to unconditional
leave to defend the suit. In the cited case also, Hon’ble Supreme
Court directed defendant therein to deposit Rs.20 lacs while
granting leave to defend the suit. In case of Sudin Dilip
Talaulikar (cited supra), defendant therein returned the
defective goods. Considering the facts of that case,
unconditional leave to defend the suit was granted.
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12. Defendants did not dispute receipt of the goods.
Defendants also did not dispute price of the delivered goods.
Defendants contend that goods supplied was of inferior quality.
As per averments made in reply affidavit, defendants received
the goods on 12/11/2014. They have made part payment of
Rs.3 lacs on 25/11/2014. They have further made payment of
Rs.3 lacs on 31/03/2015. Till then, defendants did not raise the
issue regarding quality of the supplied goods.
13. Defendants did not return the supplied goods on the
ground of inferior quality of goods.
14. Defendants claim that they came to know about
quality of goods on being intimated by Quality Assurance
Department of defendant No.1. Defendants have not pleaded as
to when Quality Assurance Department intimated them
regarding quality of supplied goods. They have also not filed on
record said report.
15. Defendants submit that issue regarding quality of
goods was raised with plaintiff formally and informally.
However, no material is brought on record to show that
defendants raised concern over the quality of goods with
plaintiff. The pleadings regarding raising the issue of quality of
goods are vague.
16. Defendants are seeking leave to defend the suit
mainly on two grounds viz. suit is not based upon written
contract and defendants received inferior quality of goods and
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therefore they have withheld the payment.
17. In case of Jatin Koticha (cited supra), Hon’ble
Bombay High Court pleased to hold that suit based upon
invoices coupled with delivery of goods is a suit based upon
written contract. Defendants did not dispute invoices raised by
plaintiff and delivery of goods. Therefore, summary suit based
upon the invoices supported with delivery of goods would be
maintainable.
18. Defendants raised the issue of inferior quality of
goods, however, no material is brought on record to show that
supplied goods were of inferior quality. As per defendants’ reply
only, they have made part payment after four months of the
receipt of goods. But, they have not raised any issue regarding
inferior quality of the goods till said payment. The report of
Quality Assurance Department is not filed on record. It is not
pleaded as to when defendants received said report. There is no
material on record to show that defendants raised issue of
quality of goods with plaintiff. Thus, defendants in their reply
affidavit raised issue regarding inferior quality of goods, but,
failed to substantiate said defence. Therefore, it can be
concluded that issue of inferior quality of goods raised by
defendant is a moonshine defence.
19. During the course of hearing of Summons for
judgment, plaintiff filed on record email alleged to be sent by
defendant no.4, accepting the liability to pay the balance
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amount. Said email was sent by defendant no.4 on
30/11/2018. Ld. Counsel for defendants strongly opposed
reliance upon said email on the ground that said electronic
document is not supported by certificate u/s.65B(4) of The
Indian Evidence Act. Thereafter, plaintiff filed on record copy of
the certificate u/s.65B(4) of The Indian Evidence Act. Ld.
Counsel for defendants submit that said certificate does not
comply the requirements u/s.65B(4) of The Indian Evidence Act
and therefore, it cannot be relied upon.
20. As held in the case of Arjun Khotkar V/s. Kailash
Gorantyal, Civil Appeal No.2082520826 of 2017 , certificate
u/s.65B(4) of Indian Evidence Act is mandatory for admitting
any electronic record in the evidence. Court is now dealing with
leave to defend application filed by defendants as per Order 37
Rule 3(5) of C.P.C. which provides that defendant has to apply
leave to defend the suit by affidavit or otherwise disclosing such
facts as may be deemed sufficient to entitle him to defend the
suit. While considering the Summons for Judgment taken out
by plaintiff, Court has to consider whether defendant by filing
affidavit or otherwise discloses such facts as may be deemed
sufficient to entitle him to defend the suit or not. At this stage,
court is not required to admit any document in evidence,
therefore, the issue of admissibility of electronic record raised
defendants would not be relevant while deciding leave to defend
application.
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21. Plaintiff is claiming recovery of the amount towards
the goods supplied to defendants on 12/11/2014. Suit is filed
on 18/12/2018. Plaintiff has not stated as to when goods were
delivered to defendants. He has also not stated as to when he
has received part payment of the supplied goods. Defendants
submit that he has made part payment of the goods on
25/11/2014 and 31/03/2015. Thus, plaintiff has received last
payment from defendants on 31/03/2015. Although defendants
did not raise the issue of limitation, Sec.3 of The Indian
Limitation Act casts duty upon the Court to see as to whether
suit is within limitation or not, although limitation has not been
set out as a defence. Plaintiff in para.18 of the plaint, pleads
that payment became due from the date of last payment and suit
is within limitation from the date of last payment. Last payment
was made on 31/03/2015 and as stated above, suit is filed on
18/12/2018.
22. Plaintiff has filed on record, email sent by
defendant no.4 dated 30/11/2018. Said email is also not sent
within three years of the date of last payment. Therefore, it
cannot be construed as an acknowledgement in writing as per
Sec.18 of The Indian Limitation Act. Plaintiff is not coming with
the case that by sending the email dated 30/11/2018,
defendants promised to pay time barred debt. Thus, considering
all these aspects, although defendants have not set up a defence
of limitation, issue of limitation may arise.
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23. Next consideration would be whether contesting
defendants are entitled to unconditional leave to defend the suit
or conditional leave to defend the suit. Issue of limitation goes
to the root of the matter. Therefore, contesting defendants
would have got unconditional leave to defend the suit.
However, as discussed supra, defendants admits that an amount
of Rs.3,90,448/ was outstanding against them and they have
withheld the payment due to inferior quality of supplied goods.
As discussed supra, defendants would not substantiate their
defence regarding inferior quality of goods. In view of
defendants’ admission regarding due amount, a reference with
profit can be made to second proviso to Order 37 Rule 3(5) of
C.P.C. which provides where a part of the amount claimed by
the plaintiff is admitted by defendant to be due from him, leave
to defend the suit shall not be granted unless the amount so
admitted to be due is deposited by the defendant in the court.
Thus, Court will be well justified in directing defendant Nos.1 to
3 and 5 to deposit an amount of Rs.3,90,448/ in the Court
while granting them leave to defend the suit. In the result,
following order.
ORDER
1. Defendant Nos.1 to 3 and 5 shall deposit a sum of
Rs.3,90,448/ (Rs. Three Lacs, Ninety Thousand, Four Hundred
and Forty Eight only) in Court within a period of 12 weeks from
today. If this condition is compiled with, defendant nos.1 to 3
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and 5 are granted leave to defend the suit and they shall file
Written Statement within a period of 30 days from the date of
deposit.
2. If aforesaid condition of the deposit is not followed by
defendant nos.1 to 3 and 5 within stipulated time, plaintiff shall
be at liberty to apply for an exparte decree against defendant
nos.1 to 3 and 5.
3. There shall be no order as to costs.
4. S/J No.12/2020 is disposed of accordingly.
22/12/2021 S.U.HAKE
JUDGE,
CITY CIVIL COURT,
GR.MUMBAI.
Dictated on : 22/12/2021
Transcribed on : 23/12/2021
Signed on : 24/12/2021
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CERTIFIED TO BE TRUE AND CORRECT COPY OF THE
ORIGINAL SIGNED JUDGMENT/ORDER”.
24/12/21 at 04.30 pm.
Mrs.Tanushree C.Kamble
Name of the Judge HHJ SHRI SU Hake
Date of Pronouncement of
judgment/order 22/12/21
Judgment and order signed by P.O. 24/12/21
Judgment/order uploaded on 24/12/21
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