Orient Packaging vs. Neptune Synthetics

IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINRY ORIGINAL CIVIL JURISDICTION

SUMMONS FOR JUDGMENT NO. 387 OF 2008 IN SUMMARY SUIT NO. 3004 OF 2008

Oriental Packaging .....Plaintiffs V. Neptune Synthetics ......Defendants

Mr. C. M. Kothari for the plaintiffs Mr. G.D. Uttangale i/b M/s Utgangale & Co. for the defendants

CORAM : A.A. SAYED, J DATE : 23 RD JUNE, 2009

P.C.

1 The above Summons for Judgment is taken out by the plaintiffs praying that a Judgment be entered in their favour against the defendants for Rs. 7,63,796/- plus interest @ 24% p.a. on the principal sum of Rs. 5,66,926/- till payment or realization.

2 The case of the plaintiffs is as follows :-

that they have sold and delivered goods to the defendants under their Invoice No. 1262 dated 19.06.2007 valued at Rs. 8,66,925.63 and part payment to the extent of Rs. 3 lacs only were received, leaving a balance of Rs. 5,66,926/-. The said Invoice mentions interest at the rate of 24% per

annum. The defendants' employee Smt. Heena on 02-07-2007, by sending SMS, informed the partner of the plaintiffs that the outstanding amount payable to the plaintiffs was deposited in the Bank of Rajasthan, under Cheque No. 85711 for Rs. 5,00,000/- and Cheque No. 258984 for Rs. 3,66,925/- and that both the cheques dated 02-07-2007 were drawn on ICICI Bank. However, on inquiry with the Bank of Rajasthan, the plaintiff found that no cheques were deposited and accordingly this fact was informed by the plaintiffs to the defendants by letter dated 6-7-2007 sent by RPAD. The defendants thereafter sent a fax dated 09.07.2007 to the plaintiffs and raised unfounded and vague demands for credit notes for Rs. 3,50,000/- for price difference, additional discounts, loyalty bonus and damages. The said fax was replied by the plaintiffs by their letter dated 30th July, 2007 denying the contentions of the defendants. The plaintiffs thereafter sent reminders to the defendants to make payment of outstanding dues under the said Invoice. The defendants thereafter vide their letter dated 25-10-2007 denied their liability. The plaintiffs then sent a demand notice dated 9-1-2008 through their Advocate to the defendants. In response to the said notice, the defendants sent a cheque No. 434847 dated 1.3.2008 for Rs. 1,50,000/- and another cheque No. 434846 dated 5.3.2008 for Rs. 1,50,000/- along with covering letter dated 22.2.2008 and agreed to pay the balance in the 3rd week of March, 2008. Since the balance amount remained to be paid, the plaintiffs, have filed the above suit and have taken out the above Summons for Judgment.

3 The defendants opposed the Summons for Judgment by filing a reply. According to the defendants, this Court has no territorial jurisdiction to entertain and try the suit in view of the fact that the plaintiffs have delivered the goods from their factory at Daman and defendants are carrying on business at Hyderabad and have received the delivery of the goods at Hyderabad. It is further contended in the reply that that a sum of Rs. 1,10,425/- by cheque No. 863180, dated 9-05-2008 drawn on Tamilnadu Mercantile Bank was issued by the defendants in favour of the plaintiffs and the said cheque was also duly debited in the account of the defendants and the said amount has not been shown by the plaintiffs as received in the plaint. It is further stated that the amount of interest is calculated on the amount of Rs.8,66,926/- without giving credit for the amount of Rs. 1,10,425/-. It is further averred in the reply that as per understanding between the plaintiffs and the defendants, the defendants were at the end of financial year entitled to discount amounting to Rs. 4,56,501/- and that debit note was issued by the defendants to the plaintiffs way back on 31-3-2007, and they were specifically informed about the same and according to the defendants, after adjustment of discount of Rs. 4,56,501/- and Rs. 1,10.425/- paid by cheque by the defendants to the plaintiff, nothing remained due and payable by the defendants to the plaintiffs. It is further stated in the reply that the defendants have purchased from the plaintiff and its sister concern M/s Supertex a quantity of 506 tons and as per the Memorandum of Understanding and quantity discount, they are entitled for credit of Rs. 4,56,501/-. The defendants have also annexed a copy of the debit note dated 31-3-2007 at Exh.8 to the reply. It is further stated that Exh. B to the plaint discloses the balance of Rs. 8,72,633.71 as due and payable by the defendants to the plaintiffs, however the present suit is filed on the basis of only the invoice amount of Rs.8,66,926/-.

4 The plaintiffs have filed a rejoinder wherein they have acknowledged

the receipt of the sum of Rs. 1,10,425/- by them and have stated that they were not ware of this fact as the amounts were directly deposited in the plaintiffs' account by the defendants without their knowledge. The plaintiffs have denied that there was any Memorandum of Understanding and that the defendants were entitled to discount of Rs. 4,56,501/-. The plaintiffs further denied receipt of debit note dated 31-3-2007. It is further stated that there is no mention of debit note dated 31-3-2007 in the defendants' letter dated 5-10-2007 (annexed to the plaint at Exh.H). It is further stated that the letter of the defendants dated 25-10-2007 contains reference to cash payment alleged to have been made to the plaintiffs' employee by the defendants in a sum of Rs.3,50,000/- and demanding credit thereof and this contention was contrary to what is now been pleaded that the defendants demanded credit note for discount of Rs. 4,56,501/-. It is further stated that the suit is based only on the invoice and that the balance amount over and above the same was in respect of balance dues.

5 I have heard the learned Counsel for the plaintiffs and perused the material on record. Insofar as the plea of territorial jurisdiction is concerned, the plaintiffs have obtained leave under Clause XII of Letter Patent and there is no application filed by the defendants for revocation of the leave granted by this Court. The suit is filed on the basis of Invoice which is annexed at Exh. A to the plaint. The receipt of the goods have not been denied by the defendants. The defendants' claim is that they are entitled to certain discounts and that they are entitled to certain damages. In the reply on one hand it is stated that the defendants are entitled to discount of Rs. 4,56,501/- under Memorandum of Understanding and a debit note was sent to the plaintiffs on 31.03.2007. On the other hand, they have stated

in the letter dated 25.10.2007 that Rs. 3,50,000/- in cash has been taken by Mr.Chavan on various occasions. Pertinently there is no mention about the debit note dated 31.03.2007 in the letter dated 25.10.2007. However, so far as the amount of Rs. 1,10,425/-, admittedly no credit has been given for this amount by the plaintiffs to the defendants. Insofar as interest is concerned, the Invoice does not carry the signature of the defendants, therefore, it cannot be said that the interest rate has been agreed to by the defendants. However, so far as the amount of Rs. 4,56,499/- i. e. Rs. 866926/- (Invoice amount) - 3,00,000/- ( part payment) - 1,10,425/- (amount for which no credit given by the plaintiffs), there is no substantial defence raised.

6 Taking an overall view of the matter, in my opinion, the following order would meet the ends of justice.

• (i) Leave to defend is granted to the defendants conditional upon the defendants depositing in this Court a sum of Rs.4,50,000/ within a period of 8 weeks from today.
• (ii) In the event, the defendants deposit the aforesaid amount, the suit to stand transferred to the list of commercial causes. The defendants to file their written statement within 30 days of the aforesaid deposit being made. Affidavit of Documents within 8 weeks thereafter. Discovery and Inspection within 8 weeks thereafter.
• (iii) The plaintiffs shall be entitled to withdraw an amount of Rs.

3,00,000/- from the aforesaid amount without security.

• (iv) In the event, the defendants fail to deposit the aforesaid amount, liberty to the plaintiffs to apply for further orders.
• (v) On the deposit being made, the Prothonotary and Senior Master to invest the balance of Rs. 1,50,000/- in a term deposit of any Nationalized Bank.
• 7 The Summons for Judgment stands disposed of accordingly.

A.A.SAYED, J.