Hanil Era Textile Ltd. vs Trident Packaging Pvt. Ltd.

Raj Mohan Singh, J.

CM No. 11243-C of 2012 in RSA No. 4097 of 2012 and CM No. 13283-C of 2012 in RSA No. 4773 of 2012

For the reasons mentioned in the applications, delay in re-filing the appeals is condoned.

Applications stand disposed of accordingly.

CM No. 11242-C of 2012 in RSA No. 4097 of 2012

Application is allowed. Deficiency in filing the appeal is made good.

Main appeals

By this order, the above mentioned two regular second appeals are being disposed of. The facts are taken from RSA No. 4097 of 2012.

Defendant is in second appeal against the concurrent findings recorded by the Courts below. The civil suit No. 99 titled M/s. Trident Packaging Pvt. Ltd. v. M/s. Hanil Era Textile Ltd. was filed for recovery of Rs. 9,23,789/- on the ground that defendant placed an order for supply of corrugated boxes and the same we''re supplied to the defendant. Business transactions and account statements were duly maintained regarding, the material supplied to the defendant. Part payment was made by the defendant but an outstanding amount of Rs. 5,49,417/- was claimed/due and in this context, the plaintiff called upon the defendant vide letter dated 30.9.1999 to confirm the principal and balance amount as per the statement of account, but the defendant, despite receiving the same, did not reply. Hence, the suit was filed, which has been opposed by the defendant thereby taking all customary pleas of jurisdiction, limitation and the suit being barred having not been filed by an authorised person.

On merits, it has been denied that the plaintiff is a private company and Sh. R.K. Talwar is its Managing Director. Learned trial Court, after framing necessary issues, invited evidence from both the parties. Issues No. 1, 2, 5 (a) and 5 (b) were taken together and the learned trial Court discussed the evidence in detail and after lawful appreciation of evidence on record, the learned trial Court held that the plea of the defendant that the material supplied to it was defective is not borne on record for want of evidence to that effect. There is nothing on record to show that the defendant had ever rejected the material so supplied or had intimated the plaintiff regarding rejection of the material supplied by the plaintiff and the defendant could not bring any evidence to show that the material supplied was not utilised by the defendant. The material supplied was never objected to or rejected nor any communication was ever served upon the plaintiff. In view of this, it has been observed by the learned trial Court that the defendant cannot be absolved from its liability to make payment against the goods supplied to it by the plaintiff. Secondly, the learned trial Court on the aspect of plaintiff not being a private company as alleged, has observed that the memorandum of articles of the association, Ex. P-23, includes the certificates of incorporation, wherein, name of Virender Kumar Mehta is mentioned as one of the founder director. Therefore, Virender Kumar Mehta had the authority to file the suit and depose before the Court as PW-1.

PW-2 has proved the resolution, authorizing Sh. R.K. Talwar, Managing Director to file the present suit against the defendant. Learned trial Court has appreciated the evidence and ultimately come to the conclusion that the suit has been filed by the authorised person and decreed the suit with future interest of 6%, after placing reliance upon Section 5 of Interest on Delayed payments to Small Scale and Ancillary Industrial Undertakings Act, 1993. According to which the supplier is entitled to compound interest being paid on delayed payment.

The defendant also claimed that the Court at Faridabad has got no jurisdiction to try the present suit as the defendant is carrying on his business in Mumbai. The fact remains that the cause of action accrued to the plaintiff in Faridabad as the entire consignment was being delivered to the transporter from Faridabad and invoices were also being prepared from Faridabad. Therefore, the Court at Faridabad has got the jurisdiction and the objection raised by the defendant was duly met in this regard also and the learned trial Court decreed the suit of the plaintiff thereby directing the defendant to make payment of Rs. 9,23,789/- along with pendente lite and future interest of 6% per annum within a period of one month, failing which, the plaintiff was held entitled to recover the same through the process of court.

Feeling aggrieved against the aforesaid judgment and decree, two appeals have been filed. Civil appeal No. 75 of 8.6.2011 has been filed by the plaintiff-appellant to claim enhanced interest as per Section 5 of the Act. Second appeal bearing No. 79 of 15.6.2011 has been field by the defendant-appellant against the judgment and decree on merits. Learned lower appellate Court dismissed the appeal filed by the defendant-appellant, whereas, the appeal filed by the plaintiff has been partly accepted, thereby, enhancing the rate of interest from 6% to 18%. Hence, the present two regular second appeals have been filed.

Learned counsel for the appellants has repeated the same arguments as were raised before the Courts below. The contention raised by the learned counsel for the defendant-appellant is with regard to improper institution of the suit and the territorial jurisdiction. Apparently, the plaintiff is a private limited company and Sh. R.K. Talwar is its Managing Director, who is fully conversant with the facts of the case and is authorised by the Board of Directors of the plaintiff-company to institute and represent the cause of the plaintiff. Therefore, in the plaint in the suit, it has been mentioned that the suit has been filed by the plaintiff through Sh. R.K. Talwar, its Managing Director and, therefore, omission in the title of the suit has no legal consequence because the court has to take into consideration entire pleadings of the plaint and not only title of the suit in part. Moreover in the suit by or against the corporation, the pleadings are to be signed and verified on behalf of the corporation by the secretary or by any director or principal officer of the corporation, who is able to depose in respect of the facts of the case. Recital in the plaint in para No. 1 is conclusive to the effect that Sh. R.K. Talwar is the Managing Director of the company and is fully conversant with the facts of this case. Resolution Ex. PW-2/1 also shows that Sh. R.K. Talwar was Managing Director of the company and was duly authorised to institute the present suit. He was authorised to verify the pleadings and defend the case. Memorandum and Articles of association of the plaintiff-company viz. Ex. P-23 and P-24 are proved on record, wherein Sh. R.K. Talwar has been shown to be the scriber of the company. Therefore, Sh. R.K. Talwar, being the director of the company, was fully competent to institute the suited sign and verify the pleadings on behalf of the company.

Learned counsel for the appellant has based his submission primarily on the ground of incompetency of the person to file the suit being not authorised person, whereas, the facts on record have been corroborated by way of evidence to show that R.K. Talwar was duly authorised and was competent to represent the cause of the company.

From the evidence of the plaintiff, it is established that the goods were sent to the defendant-appellant from Faridabad and defendant was required to make the payment at Faridabad. Therefore, the cause of action substantially accrued to the plaintiff at Faridabad. Section 20 CPC makes Faridabad to be the place where territorial jurisdiction of the suit is to be conferred upon. Resultantly, the suit at Faridabad is maintainable.

As regards defective supply of the goods, there is nothing on record to show that any complaint was made by the defendant since the time of supply in 1996-97. For the first time, the defendant company has mentioned in Ex. P-17-A dated 28.12.1999 that the goods were rejected and the plaintiff-company has failed to lift the same. Except this solitary letter, there is no documentary evidence to show that the goods were ever rejected by the defendant or any intimation to the same was ever conveyed to the plaintiff. In the cross-examination of DW-1 Prabhakar Shukla, General Manager (Legal) of the defendant-company, admission has been recorded that the goods were received from the plaintiff vide 7-8 bills, but the witness has no knowledge about the goods. The witness has admitted that the invoice and the goods received vide Ex. P-3 to Ex. P-9 were duly received by them, but he cannot tell that how much goods were received and when the same were received by the defendant. The witness has also showed his ignorance with regard to any letter written by the defendant to the plaintiff before receiving legal notice for rejecting the goods. The defendant has miserably failed to prove that consignments were ever rejected being defective.

Lastly, the learned counsel has vehemently argued that the interest levied upon the defendant-company is not on legal basis as there was no agreement between the parties to pay interest on the delayed payment. Since the invoices Ex. P-1 to P-6 have already been placed on record. In the invoice Ex. P-1, there is a recital to the effect that interest @ 24% per annum shall be charged on all overdue amounts, whereas, in the remaining invoices i.e. Ex. P-2 to Ex. P-6, the rate of interest has been shown as 36% per annum. Since the goods have been supplied by the plaintiff-company to the defendant-company on the basis of terms and conditions incorporated in the invoices, the terms and conditions, as shown in the invoices in respect of payment of interest on the delayed payment or on overdue amount is arisen out of contractual/bilateral agreement between the parties and each of the party is bound by the terms and conditions of the agreement. The defendant company is liable to pay the interest as per terms and conditions, as mentioned in the invoices on the over due amount. In the invoice Ex. P-1, the rate of interest is mentioned as 24% per annum and in the remaining invoices, it is mentioned as 36% per annum but the plaintiff has already claimed compound interest @ 18% per annum, which is already on the lower side. Therefore, the learned lower appellate Court is justified to grant interest @ 18% per annum. Learned counsel for the appellant ultimately put strenuous effort to argue that the plaintiff company is not the small scale unit and, therefore, is not entitled to the relief as has been granted by the Courts below by making reference to Ex. P-18 i.e. Permanent Registration Certificate, which is claimed to be that of 1992. Learned counsel argues that the same cannot be presumed to be in existence thereafter when the transaction took place between the parties in the year 1996 or even thereafter. Learned counsel could not pin point as to whether Permanent Registration Certificate Ex. P-18 was ever cancelled or withdrawn later on or whether there was any substantial change in the configuration and nomenclature of the company or the company ceases to be a small scale unit at any subsequent time. In view of this, the bald statement of the learned counsel for the appellant does not advance the case of the appellant in any manner. Learned lower appellate court has rightly granted interest @ 18% per annum on compound basis on monthly rests, thereby modifying the judgment and decree of the trial Court on that premise. Learned lower appellate Court has also held in affirmative that as per Section 7 of the Act, no appeal against the decree shall be entertained by any court or authority unless the appellant has deposited with it 75% of the decretal amount. Admittedly, this amount had not been deposited by the defendant company, therefore, the appeal filed by it is not held to be maintainable on this score also. Looking into the entirety of the facts and circumstances, this Court also feels that the findings recorded by the lower appellate court are on true appreciation of material on record which could not be shown by the defendant-appellant to be perverse or by way of misreading of any evidence. The findings of fact recorded by the courts below are germane of the issue, which cannot be nullified just on the asking of the defendant in the absence of the evidence on record. No law point worth cognizance could be pointed out by learned counsel for the appellant warranting interference of this court in regular second appeal. Hence, the appeals filed by the defendant are devoid of merits and are dismissed.