Spx Flow Technology Singapore Pte Ltd. vs Sanjay Jain

The Court: This is an application for judgment upon admission, in the alternative attachment before judgment. By an earlier order dated 20th August,

2018, the time to file an affidavit in answer to the show cause was extended till he adjourned date. The respondent is represented and filed an affidavit

disputing the claim of the plaintiff. The judgment upon admission is based on a communication dated 18th September, 2017 by which respondent has

requested the plaintiff to address a letter to its banker namely Bank of India, Kolkata Main Branch to the effect that the defendant owes US$

1,97,719.72.

The claim is arising out of International Distributor Agreement in relation to Fluid Power Products specifically mentioned in Schedule “A†to the

agreement dated 15th July, 2005 by which the defendant was appointed an exclusive distributor of the products in the territory mentioned in the said

agreement. The agreement was initially for a period commencing from 15th July, 2005 to 31st July, 2009 and thereafter the said relationship continued.

The plaintiff has stated that the respondent continued to place purchase orders on the petitioner after the expiry of the said period and the same was

done on a principal toprincipal basis. The claim is arising out of the products supplied to the respondent after the expiry of the agreement. The plaintiff

has relied upon the email dated 18th September, 2017 in which the respondent while admitting its dues have requested the plaintiff to issue a letter to

its Branch Manager. The said email as is appearing at page 180 of the petition dated 18th September, 2017 is reproduced.

“From: Jain Trading Company [mailto:jtc@cal2.vsnl.net.in] Sent: Monday, 18 September, 2017 7:17PM To: Di Lieto, GiuseppeG iuseppe.Di-

Lieto@spxflow.com Subject: LETTER REQUIRED BY BANK FOR MAKING THE PAYMENT [External Email] Dear Mr. Giuseppe, Refer to

the discussions have had with you, we require the following letter on SPX, Singapore Letter Head addressed to our Bank.

TO

THE BRANCH MANAGER,

BANK OF INDIA,

KOLKATA MAIN BRANCH,

23A N.S ROAD,

KOLKATA â€" 700 001

INDIA

We SPX Hydraulic Technologies, Singapore is having a Due Payment of US$ 1,97,719.72 with M/s. Jain Trading Company, Shangri-la, 119A, Ripon

Street, Kolkata â€" 700 016 against the materials supplied to M/s. Jain Trading Company, Kolkata. You are requested to please allow M/s. Jain

Trading Company, Kolkata to clear our payment. No interest will be applicable.â€​

The plaintiff has accordingly requested the banker to remit the said amount. The said amount was, however, not remitted as a result whereof a notice

of demand was issued on 8th March, 2017 followed by letters dated 27th March, 2018 and 8th May, 2017. It appears that by an electronic mail dated

3rd April, 2017 the defendant alleged that payment is stuck up because of non response of supply by the plaintiff and is due to sudden holding of the

shipment it had caused a huge jam of their stock for power team products in their warehouse which the defendant could not sell and liquidate the

money and pay to the plaintiff immediately. The defendant assured that the defendants are in the process of releasing the payments.

The defendants are selling their stock and would start paying to the plaintiff from April 2017. It is stated in the petition that in spite of such assurance,

however, no amount has been paid after April, 2017 for which final letter of demand was issued on 8th May, 2017. Although it appears from the

correspondence disclosed in the petition that on 29th March, 2017 the defendant raised a dispute that the certain despatches from the plaintiff have

caused huge loss to the defendant but it appears that such claim was not pursued letter and not reiterated in any of their future correspondence instead

at a much later dated on 18th September, 2017 they have acknowledged that the defendant owed US$ 1,97,719.72 to the plaintiff and assured to clear

the said amount as early as possible.

In the affidavit there is no plausible explanation as to why the email dated 18th September, 2017 was issued. Insofar as the respondent is concerned,

the respondent has admitted that US$ 1,97,719.72 is due and payable to the plaintiff and accordingly has instructed its banker to remit the said amount.

This email has not been explained. Instead it has now been argued that by a subsequent email dated 20th September, 2017, the respondent requested

the plaintiff to take back stock of US$ 200 Thousand of Power Team materials and square off the account. It is submitted that such offer was also

given earlier. This submission is based on interpretation of Clause 20(a) of the distribution agreement.

It is significant to note that the distribution agreement expired on 2007 but the relationship between the parties continued under the distribution

agreement. Although it is argued on behalf of the plaintiff that it was on a principal to principal basis and not under the distribution agreement but the

letter dated 8th May, 2017 prima facie shows that the plaintiff has asserted its right for payment of US$ 1,97,719.72 in terms of the distribution

agreement. The defendant wants to take advantage of the termination clause of an expired agreement to show that upon termination within a period of

thirty days the defendant can offer for repurchase from the distributor, at the net price paid by the distributor, plus actual transportation charges and

import duties paid by distributor thereon, any or all saleable products and/or parts held in stock by distributor, and distributor shall return to Fluid Power

free of charge all such products, but the fact remains that during the continuation of the relationship the defendant had acknowledged its liability and

have unequivocally admitted its liability for US$ 1,97,719.72.

Mr. Abhrajit Mitra, learned Senior Counsel has referred to a communication dated 10th September, 2018 to show that the agreement has been

terminated and accordingly in terms of Clause 20(a) of the said agreement of the distribution agreement it is the duty of the plaintiff to repurchase

from the distributor the unsold stocks which the defendant had offered on 20th September, 2017 at least one year prior to the notice dated 10th

September, 2018. The communication dated 10th September, 2018 is a cease and desist notice for infringing POWERTEAM which is a registered

trademark of the business of the plaintiff and has no relevance to the agreement under which the goods were supplied. In any event there is an

unequivocal admission of liability in the letter dated 18th September, 2017.

However, as rightly pointed out by Mr. Mitra the plaintiff has offered a credit of US$ 37,011.56 and the defendant is entitled to an adjustment of the

said sum against US$ 1,97,719.72. Accordingly, there shall be a judgment upon admission for US$ 1,97,719.72 - US$ 37,011.56 = US$ 1,60,708.16

together with interest @ 10% P.A. from the date of filing of the suit until realization. The balance claim is relegated to the suit. The conversion rate

shall be as on the date of filing of the suit. Since no affidavit in reply to the opposition filed by the defendant is called for, the allegations made in the

said affidavit in opposition is deemed to have been denied. The department shall draw up the decree for US$ 1,60,708.16 as expeditiously as possible.

Ms. Iram Hassan, Advocate of M/s. Fox & Mandal, Solicitors and Advocates have waived service of the writ of summons on behalf of the

defendant. A duplicate copy of the writ of summons along with a copy of the plaint shall be served upon the respondent within a week from date. The

defendant shall enter appearance in the suit within a week thereafter and shall file written statement on or before 30th November, 2018.