Order 1

Order Details: Copy of Judgment
Pdf Text: Com. Suit No.934 of 2021 -: 1 :- Judgment
MHCC010052692018 Presented on
: 19.04.2018
Registered on
: 23.08.2018
Decided on
: 15.04.2025
Duration
: YY : MM: DD
06 : 11 : 27
Exhibit No.43
IN THE BOMBAY CITY CIVIL COURT AT MAZGAON, BOMBAY
COMMERCIAL SUIT NO. 934 OF 2021
(OLD SUMMARY SUIT NO.2208 OF 2018)
Shri. Vipul Arvindbhai Shah,
Age 43 Years, Sole Proprietor of Nu Tech
Controls, having its principal place of business at
156, Tribhuvan Industrial Estate, GIDC,
Kathwade, Ahmedabad 382 430. ... Plaintiff.
V/s.
Shripal Metal Limited,
A Company incorporated under the provisions of
the Companies Act, 1956, having its office at 45,
C. P. Tank Road, Mumbai – 400 004. ... Defendant.
CORAM: HIS HONOUR JUDGE
SHRI. A. S. KAZI
(COURT ROOM NO.14)
DATE : 15.04.2025.
-: Appearances: -
The Ld. Advocate Ganesh Badri for the plaintiff.
The Ld. Advocate Bharat Thorat for the defendant.
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J U D G M E N T
By way of present suit, the plaintiff prayed for recovery of
sum of Rs.4,74,650/- towards the balance payment for supply of goods
made to the defendant vide Invoice No.EX/00090/16-17 dated
05.12.2016 together with interest at the rate of 24% per annum with
effect from 6th January 2017, amounting to Rs.1,42,629/- as per
Particulars of Claim till its realization in full.
The present suit was initially filed as a Summary Suit
No.2208 of 2021, later-on on 08.04.2021, upon physical verification,
suit was converted into Commercial Suit No.934 of 2021, as per section
2 (a)(c) of the Commercial Courts Act, 2015.
2) Briefly stated facts of the case are as under: -
The plaintiff is carrying on business in the name and style of
“Nu Tech Controls”, at the address given in title clause. The plaintiff is
engaged in the business of manufacture, trading and supply of
industrial valves, automation valves, ball valves, gate valves, globe
valves, check valve, strainer, SRV, PRV, ACV, pressure reducing stations,
manifold stations, pig launcher and receivers and metering skid.
3) The defendant is a Public Limited Company having its
registered office at the mentioned in the cause title.
Case of the Plaintiff:-
4) It is submitted that, the defendant is a customer of the
plaintiff, who placed an order bearing No. SML/189/16-17 dated
03.11.2016, upon the plaintiff, for supply of Gate, Globe and Check
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Com. Suit No.934 of 2021 -: 3 :- Judgment
Valves (hereinafter referred to as “the said goods”) having total order
value of Rs.33,38,880.30/- on the terms and conditions mentioned in
purchase order. The copy of same is annexed to the plaint and marked
at Exhibit-A.
5) It is further submitted that, accordingly, the said goods were
supplied by the plaintiff to the defendant, which have been dispatched
by the plaintiff vide Sale Challan No.EX/0090/16-17 dated 05.12.2016
on door delivery basis to the defendant at Nhava Sheva through a
common carrier ‘Embee Road Services Pvt. Ltd.’, the true copy of same
annexed wit the plaint at Exhibit-B. The plaintiff has also annexed copy
of Consignment No.AMD 015828 dated 05.12.2016 given by the carrier
‘Embee Road Services Pvt. Ltd at Exhibit-C.
6) It is also further submitted that, after delivery of said goods
for export, they were inspected and certified by the officer of Central
Excise and ARE-1 Form was certified by the plaintiff on 08.12.2016. The
copy of same annexed to the plaint at Exhibit-D. Thereafter, the plaintiff
raised invoice bearing No.EX/00090/16-17 dated 05.12.2016 and
dispatched the same to the defendant. True Copy of above invoice is
annexed to the plaint and marked at Exhibit-E.
7) It is further submitted that, the sale of goods was made on the
basis of the terms and conditions mentioned in the aforesaid purchase
order issued by the defendant and upon the terms of supply mentioned
in the aforesaid invoice raised by the plaintiff upon the defendant. As
agreed, after supplying of goods the entire payment of the goods was to
be made on the 30th day of supply i.e. on 6th January 2017.
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8) It is also submitted that, the defendant has accepted the
delivery of the goods and has appropriated the goods to the contract by
exporting the goods supplied by the plaintiff to the customer of the
defendant. The defendant has neither returned the goods nor has the
defendant rejected the goods and therefore liable to pay the price sold
of the goods of Rs.32,61,979/- to the plaintiff. The defendant is also
liable to reimburse to a sum of Rs.76,475/- towards inspection charges,
amounting to Rs.33,38,454/-.
9) It is further submitted that, the defendant has made payment
of sum of Rs.28,63,804/- as per details mentioned in para No.10 of the
plaint, leaving behind an amount of Rs.4,74,650/- which is due and
recovered from the defendant. True Copy of the extract of the ledger
account annexed to the plaint and marked at Exhibit-F. It is also
submitted that, despite accepting and further exporting the goods, the
defendant was deliberately not making payments of the goods, despite
many written requests and reminders the defendant avoiding to make
payment of outstanding amount of Rs.4,74,650/-.
10) It is also further submitted that, there is no provision to levy
special damages upon the plaintiff, nor the defendant is entitled to
make unilateral deduction from the amount due to the plaintiff and on
the contrary the terms of the invoice stipulated payment of interest by
the defendant @ 24 % per annum and under the such circumstances,
the plaintiff is an unpaid seller and has become entitled to recovery of
the outstanding dues of the plaintiff from the defendant.
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11) It is also further submitted that, the cause of action of the suit
arose, when the defendant refused to make balance payment by
addressing email dated 23rd March 2017 and stating that, it has decided
to deduct ARE-1 amount and falsely asking the plaintiff to collect
balance amount, but never payment the same. The copy of said Email
dated 23.03.2017 is annexed to the plaint and marked at Exhibit-G.
Therefore, the plaintiff is constrained to file the above suit.
Case of the defendants:-
12) The defendants opposed the suit claim by filling the written
statement at Exh.7. It is admitted that, the plaintiff is engaged in the
business of supply of valves for industrial uses through his sole
proprietorship Firm and the defendant had placed an order for the
supply of gate, globe and check valves under a Purchase order bearing
No.SML/189/16-17. As against the supply of goods, the defendant paid
a total amount of Rs.27,87,329/- to the plaintiff, which are mentioned
in table in para No.5 of the written statement. Thereafter, the plaintiff
incurred the cost of Rs.76,475/- for inspection charges, which were duly
reimbursed by the defendant on 29th March 2017. The said goods were
meant for export outside the country and therefore, same are exempted
from central excise duty upon due submission of an ARE-1 Form. This
ARE-1 Form had to be provided by the plaintiff to the defendant. The
plaintiff deliberately withheld the original ARE-1 Form from the
defendant, as a result, the defendants were forced to bear additional
excise liability of Rs.4,08,407/-, which could have been wholly avoided
but for the plaintiff’s breaches. The defendants are seeking set-off of
this loss from the pending consideration payable to the plaintiff and all
other amounts were duly paid to the plaintiff.
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13) At the outset, the defendant submitted that, the plaintiff is
not entitled for any relief as prayed for the reason that, the plaintiff
deliberately failed to fulfill his duty to provide original ARE-1 Form to
the defendant and suppressed the material correspondence in that
regard from the Court, which took between the parties. The plaintiff has
presented a biased and incomplete picture of the facts. The defendant
required ARE-1 Form on or before 29th March 2017 under any
circumstances and plaintiff had agreed to provide the same in
subsequent communication, however, in vain. Therefore, on 20th March
2017 around 6.16 p.m., the defendant finally called upon the plaintiff
to provide the same failing which it will be liable to make payment of
the pending consideration owed to the plaintiff to Excise Department.
A Copy of said Email is exhibited at Exh.L. The plaintiff did not respond
to the said Email, nor sent the ARE-1 Form. Again, on 23rd March 2017
similar email was sent but again the plaintiff refused to act, hence, the
defendants have not liable to pay any amount to the plaintiff and are
entitled to set-off the losses suffered from the remaining contract from
the plaintiff. Hence, it is prayed that, the Set-off a sum of Rs.408,407/-
be given from any decree passed in plaintiff’s favour, being
compensation for the loss suffered by the defendant, as a result of
plaintiff failure to abide by the his duly to provide ARE-1 Form to the
defendant and suit be dismissed with costs.
14) Heard Ld. Advocate for both parties at length. The Ld.
Advocate for the plaintiff filed Written Notes of Argument at Exh.41.
Perused the record.
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15) In view of the rival pleadings of the parties, my Ld.
Predecessor framed the following issues below Exh.09 and after hearing
both the sides, the same arise for determination before me and I record
my findings thereon for the reasons enumerated hereinafter:-
Sr. No. Issues Findings
1. Does the plaintiff prove that, an
amount of Rs.4,74,650/- is
oustanding against the defendant
towards supply of goods?
In the Affirmative.
2. Does defendant prove that, plaintiff
was duty bound to supply ARE-1
Form to defendant?
In the Negative.
3. Does defendant prove that, plaintiff
failed to supply ARE-1 Form? In the Negative.
4. Does defendant prove that, due to
non-supply of ARE-1 Form by the
plaintiff it incurred additional excise
liability of Rs.4,08,407/-?
In the Negative.
5. Whether plaintiff is entitled to get
suit amount?
In the Affirmative.
6. What Order and Decree? As per Final Order.
REASONS
As to Issues Nos.1 to 5: -
16) All these issues being interlinked are taken up for discussions
together for the sake of convenience. In order to prove its case, the
plaintiff examined himself as a Sole Proprietor of the plaintiff’s firm as
PW-01 below Exh.04 and filed Evidence Closing pursis at Exh.22. As
against this, the defendant examined Mr. Vikram Mangilal Mehta, the
Key Managerial Person of the defendant Company, as DW-01 below
Exh.11 and filed the Evidence Pursis at Exh.39.
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So far the, documentary evidence is concerned, the plaintiff
filed the compilation of documents vide Exh.12. It included the
purchase order No.SML/189/16-17 dated 03.11.2016 and the said
Challans etc., vide Exhibit Nos. 13 to 20. As against this, the defendants
also filed numerous documents which are Exhibit 23 to 37. Their
evidence is discussed in details below:-
17) PW-01, Mr. Vipul Shah deposed below Exh.04. He deposed the
verbatim as per the contents of the plaint. It has come in his evidence
that, the defendant is a customer of the plaintiff, who placed an order
bearing No. SML/189/16-17 dated 03.11.2016, upon the plaintiff, for
supply of Gate, Globe and Check Valves (hereinafter referred to as “the
said goods”) having total order value of Rs.33,38,880.30/- on the terms
and conditions mentioned in purchase order. The copy of same is
annexed to the plaint and marked at Exhibit-A.
18) He Further deposed that, accordingly, the said goods were
supplied by the plaintiff to the defendant, which have been dispatched
by the plaintiff vide Sale Challan No.EX/0090/16-17 dated 05.12.2016
on door delivery basis to the defendant at Nhava Sheva through a
common carrier ‘Embee Road Services Pvt. Ltd.’, the true copy of same
annexed wit the plaint at Exhibit-B. The plaintiff has also annexed copy
of Consignment No.AMD 015828 dated 05.12.2016 given by the carrier
‘Embee Road Services Pvt. Ltd at Exhibit-C with the plaint.
19) Again he deposed that, after delivery of said goods for export,
they were inspected and certified by the officer of Central Excise and
ARE-1 Form was certified by the plaintiff on 08.12.2016. The copy of
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Com. Suit No.934 of 2021 -: 9 :- Judgment
same annexed to the plaint at Exhibit-D. Thereafter, the plaintiff raised
invoice bearing No.EX/00090/16-17 dated 05.12.2016 and dispatched
the same to the defendant. True Copy of above invoice is annexed to the
plaint and marked at Exhibit-E.
20) It has further come in his evidence that, the sale of goods was
made on the basis of the terms and conditions mentioned in the
aforesaid purchase order issued by the defendant and upon the terms of
supply mentioned in the aforesaid invoice raised by the plaintiff upon
the defendant. As agreed, after supplying of goods the entire payment
of the goods was to be made on the 30th day of supply i.e. on 6th
January 2017.
21) In his evidence, he further deposed that, the defendant has
accepted the delivery of the goods and has appropriated the goods to
the contract by exporting the goods supplied by the plaintiff to the
customer of the defendant. The defendant has neither returned the
goods nor has the defendant rejected the goods and therefore liable to
pay the price sold of the goods of Rs.32,61,979/- to the plaintiff. The
defendant is also liable to reimburse to a sum of Rs.76,475/- towards
inspection charges, amounting to Rs.33,38,454/-.
22) He further deposed that, the defendant has made payment of
sum of Rs.28,63,804/- as per details mentioned in para No.10 of the
plaint, leaving behind an amount of Rs.4,74,650/- which is due and
recovered from the defendant. True Copy of the extract of the ledger
account annexed to the plaint and marked at Exhibit-F. It is also
submitted that, despite accepting and further exporting the goods, the
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defendant was deliberately not making payments of the goods, despite
many written requests and reminders the defendant avoiding to make
payment of outstanding amount of Rs.4,74,650/-.
23) According to him, there is no provision to levy special
damages upon the plaintiff, nor the defendant is entitled to make
unilateral deduction from the amount due to the plaintiff and on the
contrary the terms of the invoice stipulated payment of interest by the
defendant @ 24 % per annum and under the such circumstances, the
plaintiff is an unpaid seller and has become entitled to recovery of the
outstanding dues of the plaintiff from the defendant.
24) Per-Contra, on behalf of the defendant DW-01 Mr. Vikram
Mangilal Mehta deposed as per the contents of the written statement.
The main thrust of his deposition is that, the defendant had placed an
order for the supply of gate, globe and check valves under a Purchase
order bearing No.SML/189/16-17. As against the supply of goods, the
defendant paid a total amount of Rs.27,87,329/- to the plaintiff, which
are mentioned in table in para No.5 of the written statement.
Thereafter, the plaintiff incurred the cost of Rs.76,475/- for inspection
charges, which were duly reimbursed by the defendant on 29th March
2017. The said goods were meant for export outside the country and
therefore, same are exempted from central excise duty upon due
submission of an ARE-1 Form. This ARE-1 Form had to be provided by
the plaintiff to the defendant. The plaintiff deliberately withheld the
original ARE-1 Form from the defendant, as a result, the defendants
were forced to bear additional excise liability of Rs.4,08,407/-, which
could have been wholly avoided but for the plaintiff’s breaches. The
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defendants are seeking set-off of this loss from the pending
consideration payable to the plaintiff and all other amounts were duly
paid to the plaintiff.
25) He further deposed that, the plaintiff is not entitled for any
relief as prayed for the reason that, the plaintiff deliberately failed to
fulfill his duty to provide original ARE-1 Form to the defendant and
suppressed the material correspondence in that regard from the Court,
which took between the parties. The plaintiff has presented a biased
and incomplete picture of the facts. The defendant required ARE-1 Form
on or before 29th March 2017 under any circumstances and plaintiff had
agreed to provide the same in subsequent communication, however, in
vain. Therefore, on 20th March 2017 around 6.16 p.m., the defendant
finally called upon the plaintiff to provide the same failing which it will
be liable to make payment of the pending consideration owed to the
plaintiff to Excise Department. A Copy of said Email is exhibited at
Exh.L. The plaintiff did not respond to the said Email, nor sent the ARE-
1 Form. Again, on 23rd March 2017 similar email was sent but again the
plaintiff refused to act, hence, the defendants have not liable to pay any
amount to the plaintiff and are entitled to set-off the losses suffered
from the remaining contract from the plaintiff. Hence, it is prayed that,
the Set-off a sum of Rs.408,407/- be given from any decree passed in
plaintiff’s favour, being compensation for the loss suffered by the
defendant, as a result of plaintiff failure to abide by the his duly to
provide ARE-1 Form to the defendant and suit be dismissed with costs.
26) Now, in the light of the above evidence, I have minutely
perused the record of the case and I find that, the plaintiff has
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substantiated his case about supply of goods to the defendants vide
purchase Order No. SML/189/16-17 dated 03rd November 2016
(Exh.13). He further substantiate his case by filing the Sale Challan
dated 05th December 2016 at Exh.14 on Door Delivery basis at ‘Nhava
Sheva’ through Transporter Embyee Road services Private Limited vide
Consignment Note dated 05th December 2016 at Exh.15. This fact is not
disputed by the defendants. The real disputes appears to be about non
supply of ARE-1 Form, which I will discuss herein after:-
27) First of all, if the cross-examination of PW-01 Vipul Shah is
perused, it pertains to the procedure for exporting the goods and about
inspection of the same. So far as the ARE-1 Form is concerned, the
witness admitted it is used at the time exporting the goods and that the
supplier used to obtain the form the Government and supplied to the
defendant. His accountant used to fill up the details in the said form
and used to obtained endorsement of the government on it. The original
ARE-1 Form needs to be handed over to the buyer when he was going
to export the goods. The defendant has asked him to supply the form
when he was going to export the goods. He denied that, inspite of
demand from the defendant, he had not supplied it. On the contrary, he
affirmed that the original ARE-1 Form was handed over to the
defendant, though he did not remember, when it was handed over to
defendants. He further admitted that ARE-1 Form is used to obtain
rebate from the custom duty and if buyer failed to submit the same with
the Customs Officer, that he will not get benefit of rebate. He does not
know whether the ARE-1 Form was dispatch from his office or not. He
denied that in spite of receiving entire amount from the defendant, he
had not given original ARE-1 Form to the defendant.
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28) As against this, in the cross-examination of DW-01 Vikram
Mehta below Exh.11, it is elicited that, he has brief knowledge about
the ARE-1 Form. He does not know whether ARE-1 Form is in triplicate.
He does not know, whether one copy of the same is kept with the buyer,
one with the seller and one with the consignment. Again he admitted
that, he has not signed the purchase order at Exh.13 and before
exporting the goods, they have not issued a legal notice to the plaintiff.
They accepted the goods and exported the same. He was shown Exh.16
and identified that, his father signature there on and the seal of excise
department on the back side. This is the ARE-1 Form dated 05th
December 2016 and the seal thereon the dated 08th December 2016. He
was shown the copy of Sale Challan along with Commercial Invoice,
Packing list, Excise Gate Pass etc., at Exh.14 Colly., but he denied that,
there is no condition giving the company unilateral right to deduct
money, if ARE-1 Form is not submitted. He denied knowledge whether
any documents is filed by the defendant to show whether they suffered
any loss, penalty on account of non-submission of ARE-1 Form. They
have not issued a legal notice to the plaintiff about taking back the
goods due to non submission of ARE-1 Form. He admitted that, today
he cannot return the goods supplied by the plaintiff. He has not raised
any debit note on the plaintiff till today claiming the loss allegedly
caused to his company due to non supply of ARE-1 Form.
29) In the background of the above admissions, as rightly
submitted on behalf of the plaintiff, the defendants have admittedly
exported the goods purchase from the plaintiff. A cursory look at the
Exh.16 would show that, the ARE-1 Form dated 05th December 2016
was given to the defendant, whereby he could export the goods to the
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Com. Suit No.934 of 2021 -: 14 :- Judgment
foreign country after obtaining certification dated 08th December 2016
from the Excise Officers. The DW-01 Vikram Mehta is incidently the son
of Mangilal Mehta, who was the key managerial Person of the
defendant’s company. When confronted with Exh.16, he admitted that,
the copy of ARE-1, bears the signature of Mangilal Mehta and that there
is a seal of Excise Department on the back side. Hence, it is rightly
argued that, though, he identified his father signature on the ARE-1
Form, he falsely deposed that, the form was not received by the
defendant. Unless the form was received by the defendant company,
one fails to understand, how Mangilal signed the same and how the
excise department put his seal thereon. Hence, the witness is falsified in
his cross-examination.
30) Now, if the purchase Order below Exh.13 is perused, it
contains conditions given below the said Purchase Order. If the
conditions written below the purchase order are seen they do not entitle
the defendant nor do they give the defendant any unilateral right to
deduct money if ARE-1 Form is not submitted. Hence, defendant
cannot content that they have right to deduct money on that count.
31) Apart from this, admittedly no documents is produced by the
defendant that, they suffered any loss / penalty on account of non
submission of ARE-1 Form. Hence, it is rightly argued on behalf of the
plaintiff that, unless and until damages are proved, relief of damages
cannot be granted.
32) Moreover, DW-01 Vikram Mehta admitted that, he is not
ready to pay balance amount due to the plaintiff nor, he can return the
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Com. Suit No.934 of 2021 -: 15 :- Judgment
goods today to the plaintiff. No debit note is raised till today on the
plaintiff by the defendant for the alleged loss caused to it, due to non
submission of ARE-1 Form. It is also submitted that, there is no
supporting evidence such as actual loss entry reflected in Audit
conducted in the defendant Public Limited Company. Thus, in my
opinion, defendant failed to produce any concrete evidence about loss
allegedly caused to it due to non submission of ARE-1 Form. The
correspondence i.e. emails produce on record are all signed by one Mr.
Avinash Kadam. He is admittedly fit and fine and working in the
company, but he is not produced before the court by giving the reason
that, he is a part time employee. Thus, the said correspondence is not
property proved before the court. No notice is issued to the plaintiff, to
take back the goods, due to non submission of ARE-1 Form. So, on a
balance of probabilities no case is made out to set off any amount
against the outstanding dues owed to the plaintiff by the defendant, and
the case of the plaintiff can proved. Hence, I answer issue Nos.1 and 5
in the Affirmative and Issue Nos.2 to 4 in the negative. Before parting
with the case, it needs to be mentioned here that, apart from claiming
the principal amount of Rs.4,74,650/- the plaintiff has also prayed for
interest @ 24 % p.a. from the date, when it became due, till realization
in full. However, in my opinion, it would be proper to award interest at
the prevailing rate of 9 % p. a. Hence, I proceed to pass the following
order:-
ORDER
1) Commercial Suit No.934 of 2021 is partly decreed with costs.
2) The defendant do pay an amount of Rs.4,74,650/- together with
interest at the rate of 9 % per annum from the date, when it became
due, till its full realization.
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3) Decree be drawn up accordingly.
4) Commercial Suit No.934 of 2021 stands disposed off accordingly.
(A. S. Kazi)
Addl. Sessions Judge,
City Civil & Sessions Court,
Date: 15.04.2025. Mazgaon, Gr. Mumbai
(C. R. No.14)
Direct Typed On : 15.04.2025.
Signed on : 15.04.2025.
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“CERTIFIED TO BE TRUE AND CORRECT COPY OF THE ORIGINAL
SIGNED JUDGMENT/ORDER.”
UPLOAD DATE: 15.04.2025 NAME OF STENOGRAPHER
TIME: 04.00 p.m. Mr. Ashok Sudhakar Patil
Name of the Judge (With Court
room no.)
HHJ Shri. A. S. Kazi.
(Court Room No.14)
Date of Pronouncement of
JUDGEMENT/ORDER
15.04.2025
JUDGMENT/ORDER signed by P. O.
on
15.04.2025
JUDGEMENT/ORDER uploaded on 15.04.2025
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