Final Order 2

Order Details: Copy of Judgment
Pdf Text: 1 Judgment in Comm. SU 242021
MHCC010106262019 Presented on : 16/10/2019
Registered on : 29/01/2021
Decided on : 12/02/2024
Duration : 04Y/03/27D
Exh.24
IN THE CITY CIVIL COURT AT MAZGAON, MUMBAI.
(COURT ROOM No.32)
COMMERCIAL SUIT No.24 OF 2021
M/s. Coatings and Coatings (India) Pvt. Ltd.,
a private limited company, duly incorporated
and registered under the Companies Act,
1956 and as duly amended, having its
registered office at 104, Hill View, 1st floor,
Siddpura Industrial Estate., L.B.S. Marg,
Ghatkopar(West), Mumbai400 086 Through
its authorized Director Mr. Manish Kantilal
Bhayani, Aged 56 years, Occ: Business.
…PLAINTIFF
VERSUS
M/s. Shri Shankar Sahakari Sakhar Karkhana
Ltd.
A Limited Company, having its Regd. Office
address at Sadashivnagar, Taluka Malshiras,
Dist.Sholapur412 111, Maharashtra. …DEFENDANT
Shri. Yogesh Gandhi, learned advocate for plff.
Shri. Abhinav Tayade, learned advocate for defendant.
CORAM : JUDGE, SHRI VISHAL SADASHIVRAO GAIKE, COURT
ROOM NO.32, CITY CIVIL COURT, MAZGAON, MUMBAI
J U D G M E N T
(Delivered on 12/02/2024)
1. This is a suit for recovery of sum of Rs.10,58,788/
together with further interest @ 19.5% p.a. on the outstanding principal
sum of Rs.4,91,568/ from 18/01/2016 till the date of filing of the suit
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and till realization of entire amount.
2. It is the case of plaintiff that, it is a Private Limited
Company duly incorporated and registered under the Companies Act,
1956 and as amended and duly represented by one of the Directors, Mr.
Manish Kantilal Bhayani who is duly authorized by the Directors of M/s.
Coatings and Coatings (India) Pvt. Ltd. Vide resolution and the
corresponding Letter of Authority both dtd.26/02/2019 and is the
wholesale dealer/trader/manufacturer and has been supplying and
dealing in certain items, such as Ethyl Alcohol based reducer, etc as per
the requirements of its customers whereas the defendant No.1 is the
Limited Company duly incorporated and registered under the provisions
of the Companies Act, 1956.
3. That, the defendant No.1 is a Limited Company duly
incorporated and registered under the provisions of Companies Act,
1956, having its address as mentioned in the cause title (as per ROC
search report and records). That, the advance payment of
Rs.36,00,000/ was paid to the defendant on 19/01/2016 by RTGS for
the purpose to purchase of Denatured Ethy/Alcohol(hereinafter referred
to as 'the said goods') and out of which the defendant has supplied the
goods worth of Rs.31,08,432/ and the delayed supply of Denatured
Ethy/Alcohol of the amount of Rs.4,91,568/. An amount of
Rs.4,91,568/ is not yet received and is recoverable from defendant as
the principal amount.
4. That, on 18/01/2016 the plaintiff was induced to part with
the advance sum of Rs.36,00,000/ through RTGS for the purpose of
purchasing of Denatured Ethy/Alcohol. This payment was against and
towards booking of and purchase of one Lakh liters of S.D.S. (Special D
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3 Judgment in Comm. SU 242021
Natured Spirit) which came to be confirmed vide D.O./Quotation
No.1761 dated 3/12/2016. The S.D.S. was agreed to be supplied @
Rs.33 per liter on the terms as appearing in D.O./Quotation No.1761
dtd.3/12/2016 which came to be confirmed by defendant.
5. That, despite the defendant having agreed to supply the
entire quantity at a time, after great persuasions by the plaintiff, vide
the 4 separate invoices, with the dishonest and malafide intentions
supplied the goods inpart in indefinite intervals. The details of the said
four invoices and delivery challans are as follows.
Sr.
No.
Delivery Challan
Nos. & Date
Debtor
's Tax
Invoic
e Nos.
Dates of
Tax
Invoices
Invoice
Amount
(Rs.)
Goods
received by
Creditor
with dates.
1. 224 dt.5/2/2016 121 6/2/2016 7,77,108/ 1516/1066
2. 232 dt.11/2/2016 129 13/2/2016 7,77,108/ 1516/1085
3. 242 dt.18/2/2016 139 20/2/2016 7,77,108/ 2516/1109
4. 258 dt.7/3/2016 155 7/3/2016 7,77,108/ 1516/1170
7/3/2016
Total 31,08,432/
6. That, while making the aforesaid supplies at all points of
time, the defendant and its directors and concerned officials including
the C.M.D. falsely represented and appraised interalia to the Creditor
that there was allegedly an attachment and/or Court's intervention of
administration by virtue of which the defendant allegedly were unable
to supply the said goods promptly as the production of the said goods
was in stalled condition, etc.
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7. That, 07.03.2016 the defendant has failed and neglected to
supply balance quantity of 20,000 liters of Special Dnatured Spirit
under one or the other pretext. The defendant has not paid Central
Excise @ 12% and VAT @ 5%. It did not respond to the repeated
requests and reminders to supply the balance quantity of goods. Thus,
an amount of Rs.4,91,568/ from the amount paid by the plaintiff is
fraudulently withheld by the defendant. It fraudulently generated four
invoices at the escalated rates and fraudulently levied the taxes thereon
which resultantly increased the purchase costs of the goods to supply to
the plaintiff. Due to the misconduct of the defendant, the plaintiff's
reputation suffered.
8. That, as on 31/12/2017 an amount of Rs.4,91,568/ is
outstanding with further interests at the agreed @ 19.50 % p.a.
amounting to Rs.3,07,220/ and further business losses @ 4% p.a.
amounting to Rs.2,00,000/. Thus, total amount of Rs.10,58,778/ is
due to the plaintiff from the defendant.
9. That, the debit note bearing No.116/A dtd.01.03.2019 has
fallen due from 19.01.2016. The plaintiff had sent demand notice
dtd.20.01.2018 to the defendant but, no reply was sent by it despite of
its due receipts on 23.01.2018. Hence, the defendant be directed to pay
the claim amount.
10. The defendant appeared and filed its Written Statement at
Exh.10 and contended that the suit is barred by Section 164 of the
Maharashtra Cooperative Societies Act, 1960. Therefore, the suit be
dismissed for non compliance of Section 164. That, the authorized
representative of the plaintiff has no personal knowledge of the alleged
transaction. The contents of plaint pertaining to the date amount
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claimed by the plaintiff are not true and correct. The defendant has
denied all the contentions of the plaintiff regarding the claim amount. It
is also contended that the alleged debt was due from 19/01/2016
therefore the suit is barred by the law of limitation i.e. by Article 13 of
the Limitation Act. That, the suit does not lie under the provision of
Order XXXVII of the Civil Procedure Code, 1908 because apart from the
outstanding amount with interest, the plaintiff company has also
claimed the amount of business loss and rate difference. The suit cannot
be tried in the Commercial Court hence, it be dismissed with costs.
11. That, considering the pleadings of the parties, my learned
predecessor has framed issues at Exh.12. The plaintiff examined PW1
Manish Kantilal Bhayani at Exh.6 in support of its claim and proved
documents filed below list Exh.7. Thereafter, plaintiff filed its evidence
close pursis at Exh.20 on 03/08/2022. Thereafter, as the defendant did
not file its evidence till 13/02/2023 hence, he right of defendant to
adduce evidence was forfeited and matter was adjourned for final
arguments.
12. That, the plaintiff filed its Written Notes of arguments at
Exh.23 and the defendant filed his Written Notes of arguments at
Exh.22. Heard the oral arguments on behalf of the plaintiff and the
learned advocate of the defendant submitted that his Written Notes of
arguments at Exh.22 may be considered as oral arguments on behalf of
the defendant.
13. That, considering the pleadings of the parties, issues
framed, the evidence led by the plaintiff and the Written Notes of
arguments, I have recorded my findings thereon for the reasons stated
thereunder.
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ISSUES FINDINGS
1. Whether the plaintiff proved that, he is
entitled to recover an amount of
Rs.10,58,788/ with interest @ of 19.5 %
p.a. from the date of suit till realization of
the entire amount from the defendant ?
...In the Negative
2. Whether suit is barred by want of
compliance of Section 164 of the
Maharashtra Cooperative Societies Act ?
...In the
Affirmative.
3. Whether suit is time barred ? ...In the
Affirmative.
4. What order and decree? ...As per final
order.
REASONS
AS TO ISSUE No.1 :
14. The claim of plaintiff, in brief, is that it had paid advance
amount of Rs.36,00,000/ to the defendant on 19/01/2016 by RTGS for
the purpose of purchasing Denatured Ethyl Alcohol and out of which
the defendant supplied the goods worth Rs.31,08,432/ only and
delayed the supply of goods of Rs.4,91,568/. The claim of plaintiff also
includes agreed accrued interest @ 19.5% p.a. on the balance unpaid
amount from 18/01/2016 till the date of filing of the suit and its
alleged business loss to the tune of Rs.2,00,000/ and rate difference of
Rs.60,000/ in the value of goods. The said balance goods were not
supplied hence, its amount is recoverable from the defendant. The
present issue No.1 pertains to the claim of recovery of the said amount
from the defendant. To prove its claim, the plaintiff has examined
Manish Kantilal Bhayani, its Authorised Director. He filed his affidavit in
lieu of examinationinchief at Exh.6 alongwith list of documents Exh.7.
The PW1 has repeated and reiterated in his evidence affidavits, the
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contents of the plaint. He has relied upon the following documents.
Exh.13 True copy extract of the resolution dtd.26/02/2019 passed in
the meeting of the Board of Directors, by which the plaintiff authorized
the deponent who filed the present suit, Exh.14 letter of authority
dtd.26/02/2019, Exh.15 Original delivery order/purchase
order/quotation confirmation No.1761/20162017 dtd.03/12/2016
sent by the defendant vide email dtd.05/12/2016 from the email id of
the defendant sadashivmis2@gmail.com on the email of the plaintiff
purchase@coatingsandcoatings.co.in, Exh.16 Four original invoices by
which the defendant sold, supplied and delivered the goods to the
plaintiff alongwith the respective original delivery challans thereof,
which includes the respective original confirmation of weight slips,
requisition slip for SDS, Excise formalities including the transportation
details thereof, Exh.17 original officer copy of the debit note No.66
dtd.16/12/2017, Exh.18 original officer copy of the revised debit note
bearing No.116/A dtd.01/03/2019 alongwith the calculation sheet as
narrated hereinabove, Exh.19 original officer copy of the plaintiff's
Notice of demand company under is rubber stamp and date.
15. Admittedly, the plaintiff has received 80,000 thousand
litres of the said goods worth Rs. 31,08,432 for which four different
invoices raised by the defendant are proved by the plaintiff at Exh. 16
collectively. But, to prove its claim of advance payment of Rs. 36 Lakhs
through RTGS to the defendant, plaintiff has not placed on record any
document in the nature of its bank statement. The defendant has denied
the receipt of the said amount of Rs. 36 lakhs from the plaintiff
therefore the burden was on the plaintiff to prove the said advance
payment made to the defendant.
16. That, though the plaintiff has alleged deficit in supply of
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goods but the contents of notice Exh. 19 issued by the plaintiff to the
defendant shows that, the plaintiff has alleged fraudulently engineering
of four invoices at escalated rates by the defendant. The said alleged
fraudulent invoices are not placed on record by the plaintiff and it has
relied upon the four invoices Exh. 16 collectively. That, if the agreed
rate of supply of said goods was Rs. 33.00 per liter, as per the plaintiff,
then what were the escalated rates by the defendant, as alleged in
notice Exh. 19. Thus, in absence of evidence of advance payment of Rs.
36 lakhs, the plaintiff has not proved that is received less goods worth
of Rs. 4,91,568/.
17. That, there is no evidence regarding alleged business loss
to the tune of Rs. 2,00,000/ by the plaintiff and there is also no proof
regarding later on purchase of the goods from the open market by the
plaintiff with a total rate difference of Rs. 60,000/ thousand hence, I
answer issue No.1 in the Negative.
AS TO ISSUE No.2 :
18. It is the contention of the defendant that the suit is barred
for want of issuance of notice under Section 164 of the Maharashtra Co
operative Societies Act, 1960 (hereinafter referred to as 'the said Act'.
The defendant has contended that it is a Cooperative Sugar Factory
and as per the provision of said Section 164, no suit shall be instituted
against a Society, or any of its officers, in respect of any act touching
the business of the society, until the expiration of two months next after
notice in writing has been delivered to the Registrar of left at his office,
stating the cause of action, the name, description and place of residence
of the plaintiff and the relief which he claims, and the plaint shall
contain a statement that such notice has been so delivered or left.
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19. The expression “touching the business of the society”,
which is used in Section 164 has also been used in Section 91 of the
said Act. Section 91, it would be material to note, false in Chapter IX of
the Act which is entitled “statement of disputes”. Section 91 provides
that notwithstanding anything contained in any other law for the time
being in force, any dispute touching the constitution, elections of the
committee or its officers other than elections of committees of specified
societies including its officers conduct of general meetings, management
or business of a society shall be referred by any of the parties to the
dispute to a Cooperative Court if the parties thereto are one or the
other of the parties specified in clauses (a) to (e) of the Section.
20. In the present case, as can be seen from the invoices
Exh.16(colly.) the defendant is a Cooperative Sugar Factory situated in
Sadashiv Nagar, Taluka Malshiras, DistrictSolapur. Its Distillery
Division has issued the said invoices consequent to the supply of
Denatured Ethyl alcohol. The dispute between the present parties is
touching the business of the society regarding supply of the said goods.
That, though the plaintiff has claimed in its pleadings that the
defendant is a Limited Company, duly incorporated and registered
under the provisions of the Companies Act, 1956 but, the documents on
which the plaintiff has relied upon proves that the defendant is a Co
operative Society governed under the provisions of the Maharashtra
Cooperative Societies Act, 1960. Hence, the mandatory notice under
Section 164 of the said Act ought to have been issued in writing by the
plaintiff and delivered to the Registrar of Cooperative Societies and
pleadings to that effect ought to have been made in the plaint by the
plaintiff and after the expiry of two months from the date of issuance of
said notice, the plaintiff was entitled to institute a suit against the
defendant.
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21. It is apposite to note here that, in the matter of Suprabhat
Cooperative Housing Society V/s. Span Builders and Anr. decided
on 27/03/2002 reported in 2002 (3) Mh.L.J. 837; Hon'ble Bombay
High Court had decided the issue of non service of mandatory notice to
the defendant under Section 164 of the Maharashtra Cooperative
Societies Act, 1960. It was held by the Hon'ble Bombay High Court that,
the suit in the said matter was clearly one regarding a dispute which
touched the business of the said society. It was further held that as no
notice under Section 164 of the said Act was served upon the defendant
hence, the suit was not maintainable. The ratio of the said Judgment
laid down by the Hon'ble Bombay High Court in the matter of
Suprabhat (Supra) is squarely applicable to the facts of the present case.
Hence, the present suit is not maintainable/barred for non compliance
of Section 164 of the said Act. Consequently, I answer point No.2 in the
Affirmative.
AS TO ISSUE No.3 :
22. This point is regarding the issue of the suit not being filed
within the period of limitation. The four invoices relied upon by the
plaintiff at Exh.16 are from 6.2.2016 to 7.3.2016. According to the
plaintiff the alleged advance payment of Rs.36,00,000/ was paid to the
defendant for purchase of the said goods at a time but, the defendant
supplied less quantity of goods in four different batches. Thereafter,
plaintiff repeatedly requested to supply the remaining quantity of goods
but, the same was not supplied. The last transaction took place between
the plaintiff and defendant on 7.3.2016 and the plaint was lodged on
16.10.2019 for the recovery of balance amount of Rs.4,91,568/from
the defendant as per Article 13 of the Limitation Act, 1963, the period
of limitation to file suit for the balance of money advance in payment of
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goods to be delivered, is of three years from the date when the goods
ought to have been delivered. In the present case, the said goods were
supposed to be delivered in the month of February or March 2016 but,
insufficient goods were delivered and the plaint was lodged on
16.10.2019. There is no proof of acknowledgment of debt or
acknowledgment of supply of less goods by the defendant therefore, the
period of limitation to sue the defendant had expired in the month of
March 2019. Hence, the present plaint filed in the month of October
2019 and registered in the year 2021 is barred by the period of
limitation prescribed in the abovementioned provision of the Limitation
Act, 1963. Hence, I answer Issue No.3 In the Affirmative and proceed to
pass the following order.
ORDER
Commercial Suit No.24 of 2021 is hereby dismissed with costs.
Date : 12/02/2024.
(VISHAL SADASHIVRAO GAIKE )
Directly dictated on Computer: 12/02/2024 JUDGE, CR NO.32
Checked on : 12/03/2024 CITY CIVIL COURT, MAZGAON
Signed on : 12/03/2024 MUMBAI.
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CERTIFIED TO BE TRUE AND CORRECT COPY OF THE ORIGINAL
SIGNED JUDGMENT/ORDER”
UPLOAD DATE AND TIME NAME OF STENOGRAPHER
12/03/2024 at 5.00 p.m. Mrs.Rupali S. Bhor
Name of the Judge(with CR
No.)
HHJ SHRI. VISHAL
SADASHIVRAO GAIKE(C.R.No.32)
Date of pronouncement of Order 12/02/2024
Order signed by P.O. on 12/03/2024
Order uploaded on 12/03/2024
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