JUDGMENT
R.L. Gupta, J.
(1) Plaintiff has filed the present suit against the defendant under Order 37 of the Code of Civil Procedure (hereinafter called ‘Code’) on the allegations that the plaintiff is a registered partner hip firm carrying on business under the name and style of M/s. Punjab Pen House with Sh. Mohan Lal Ghai as one of its registered partaer. The defendant had been purchasing goods on credit from the plaintiff from. time to time and had also been making the payment of the bills. The defendant is then alleged to have purchased goods by three different bills dated 12-9-87, 17-11-87 and 19-11-87 for a total amount of Rs. 6,17,945.80. The defendant made part payment of these bills leaving a balance of Rs. 5,21,294.50 as on 30-7-88. The defendant had also issued a cheque dated 23-7-1988 drawn on the Punjab National Bank, Asaf Ali Road toward further part payment But on presentation the cheque was dishonoured.
(2) While changing and hitting its registered office from the Union Territory of Delhi to the State of Uttar Pradesh, the defendant, acknowledged in writing its liability for payment of the aforesaid bills vide letter dated 20-2-1986. The defendant is also alleged to have issued form ‘H’ under the Sales Tax Act for other bills bat did not issue the. required form in re:pect of the aforesaid thee bils. Therefore he is also alleged to be liable to pay sales tax at the. rat of 10% on the amount of these bills. In addition to the above amounts, the plaintiff also claim interest at the rate of 24% per annum from 19-11-87 to 2-10-8 S and also pending and future interest. The total claim of the plaintiff as detailed in para-6 of the plaint in for Rs. 6,70,479.50 P. It also includes cost incurred in issuing a legal notice to the defendant.
(3) On being served, defendant move present application for grant of un-conditional Leave to defend the suit. It is stated in this application that this suit was not friable under Order 37 of the Coda because it is neither based on any bill of exchange, Hundi or promissory note nor for recovery of any debt or liquidated amount on the basis any written contract or any enactment or any guarantee as provided in Older 37 rule I of the Code. The defendant also claimed that the goods purported to be covered by the aforesaid bills were in fact never received by the defendant at it place of business namely Gauri Ganj where the plaintiff continues to make the supplies. The records of the defendant maintained in this respect did not show if the goods covered by these bill had actually been received. In fact the plaintiff had submitted duplicate bills at it: registered office and had assured the defendant that the goods had been supplied at its factory site. It was on account of such an assurance of the plaintiff that the entry of the hills was made by the defendant at its head office subject to clarification and intimation from the factory site, if the goods’ covered by the aforesaid bills had been received or not. The defendant had contemplated change of registered office from Delhi to Uttar Pradesh and since at that time there were entries of the duplicate bills given to them by the plaintiff that an entry was made in the books wherea. in fact, goods were never received. Thus the defendant denied its liability to pay any amount to the plaintiff including sales’ tax, legal notice charges or interest.
(4) The plaintiff controverter the allegations of the defendant by filing a counter affidavit. It was alleged that defense taken up was absolutely false and the goods covered by the aforesaid bills were actually supplied to the defendant and since the defendant had not disclosed any substantial defense for leave to defend, the application should be rejected.
(5) I have heard arguments advanced by learned counsel for the parties. One of the main contention; raised on behalf of the defendant is that suit is not covered by any of the provisions of Rule I of Order 37 of the Code. He cited a case of M/s. West Bengal Decorating Co. v. M/s. Damodar Das Daga wherein according to the learned counsel it was held that a suit for recovery of price of goods sold and delivered did not come within the meaning of Order 37 of the Code. I have carefully gone through this authority and I am of the view that it does not apply to the facts’ of the present case. Initially, learned Single Judge of that Court had admitted the suit under Order 37 of the Code. The High Court in the revision ultimately held that the suit actually could be deemed to be based on an implied contract, between the parties and not under any express contract and, therefore, it wa- out side the scope of Order 37 of the Code. However, in the present case there is a written contract between the parties upon the basis of which the pods were allegedly supplied to the defendant. The terms of that contract are provided in the bills themselves which are at pages 16, 17 and 18 of the documents file and are as follows:-
“(1)We can demand payment through Hundi, bank draft or Vpp as and when required by us.
(2)ALL the pods are purchased and sent at your entire risk and according to your order.
(3)Interest will be charged from date of purchase at the rate of 24%i per annum on outstanding amount.
(4)We are not responsible for any loss or damages (that occurs in transit of the goods sent by us through any trafinc).
Therefore, cannot be said that it was a case simplicitor of the supply of goods by the plaintiff to the defendant without any written terms and conditions between the parties. In the case of Mrs. Sushila Mehta Vs. Sh. Bansi Lal Arora, I.L.R. (1982) I Delhi page 320(2), this Court dealt with a suit under Order 37 Rule 1 of the Code. based on a receipt given by the payee for allotment of shares in a proposed private limited company. A similar objection was taken as in the present case. While dealing with this argument, this Court held, “The plaintiff paid the application money for allotment of shares. The defendant accepted it. Though it is true that defendant No. 2 came into existence a few months later. The payment of Rs. one lac by the plaintiff as application money and its acceptance by the defendant constitute a contract. It may be labelled as a receipt but that does not mean that it is not. a contract.” Similarly in the present case, goods were supplied by plaintiff to the defendant through the aforesaid three bills. Here even the terms and conditions agreed to between the parties are given in these bills. Moreover, these bills bear endorsement on behalf of the defendant about the receipt of the goods. Therefore, when the goods are supplied through a bill on certain terms and conditions duly agreed to between the, parties, there i no escape from the conclusion that it amounts to a written contract between the parties. Therefore, I am of the view that the suit is covered by clause 1 (2) subclause (b) of Order 37 of the Code according to which the plaintiff seeks to recover a debt or liquidated amount in money payable by the defendant with or without interest arising on a written contract. Learned counsel for the plaintiff also tried to cover the present suit on the clause accordingly to which recovery of a debt or liquidated money, with or without interest is based on an enactment. In view of the aforesaid conclusion by me that the suit is based on a written contract between the parties, I need not deal with this argument in this case.
(6) The second limb of argument of the defendant is that actually goods were never supplied to the defendant and the defendant had made an entry in its books of accounts on an assurance given on behalf of the plaintiff that the goods had actually been supplied in the factory of the defendants. This defense seems to be false on the face of it. The reason is that these bills are dated 12-9-87, 17-11-87 and 19-11-87. There are endorsements made on these bills on behalf of the defendant about the receipt of these goods. The defendant then issued a special notice to the plaintiff under Rule 36(i) & (ii) of the Companies Act to the following detect :-
“TOM/s. Punjab Pen House, 82 , Moti Nagar, Najafgarh Road, New Delhi.
SUB: Special notice to Creditor in pursuance of rule 36(2) of the Company Law Board (Bench) Rules, 1975 regarding proposed alteration of the Company’s Memorandum of Association.
DEARSir,
THE Company proposes to make an application to the Company Law Board (Bench) New Delhi under section 17 of the Companies Act, 1956 (I of 1956) seeking confirmation of the alteration in the Memorandum of Association of the Company in terms of the Special resolution passed by the Company at its General Meeting held on 10th February, 1988, a copy of which is enclosed, to enable the company to shift its Regd. Office from the Union Territory of Delhi to the State of Uttar Pradesh.
“2.The Company owes yon a sum of Rs. 6,14,829.50 (Rupees Six lacs Fourteen thousand Eight hundred twenty nine made up of Rs. 6,14.829.50 (Rupees Six lacs Fourteen thousand Eight hundred twenty nine) as principal as on 20-2-1988 on account of. .. . . .
3.If you desire to oppose the confirmation of [he proposed alteration, please deliver or cause to be delivered or -end by Regd. Post your objections supported by affidavit, original to the Bench Officer (Company Law Board) at Shastri Bhavan, 5th Floor, ‘A Wing. Dr. R. P. Pd. New Delhi-1 and a copy thereof to the Company’s Regd. Office mentioned above, within 21. days from the date of receipt of this notice tailing which please note that you will be deemed to have consented to the alteration and the matter will be disposed of ex- parte accordingly.
YOURSfaithfully, for Samrat Bicycles Limited sd/-
(SUNITAMATHLIR) ASST. Company Secretary
THIS letter is dated 20th February, 1988 i.e. it was written by the defendant after complete three months of the alleged last supply of goods by the plaintiff to the defendants. If actually the goods bad not been received by the defendant, as is now claimed fail to see any earthly reason for the defendant to acknowledges that the defendant owed a sum of Rs. 6,14,S29.50 p. to the plaintiff as on 20-2-1988. The debt is then actually proved by further conduct of the defendant in issuing an account payee cheque dated 23-7-1988 to the plaintiff for a sum of Rs. 25,000 which on presentation was dishonoured. This cheque is also filed by the plaintiff along with other documents. The plaintiff then issued a legal notice to the defendant dated 14th September, 1988 mentioning about the purchase of goods on credit by the defendant and further that as on 30-7-1988 a Sum. of Rs. 5,21,294.50 p. was still outstanding. The plaintiff further mentioned in this notice that the defendant had acknowledged its liability for payment of the amount vide his letter dated 20-2-1988. There was not a whisper from the defendant and defendant preferred to keep silent even to this notice. All these circumstances, therefore, indicate that the defense now raised by the defendant about the non-receipt of goods is merely illusory or moonshine. In fact, the defendant has no defense to the claim made by the plaintiff. The plaintiff claims lesser amount than the one acknowledged in writing by the defendant because the plaintiff says that defendant had made part payments leaving an outstanding balance of Rs. 5,21,294.50 p. In addition to that amount the plaintiff legitimately claims sales tax at the rate of 10 per cent and also interest at the rate of 24 per cent per annum on outstanding amount which is one of the’ terms agreed to between the parties. The claim of Rs. 1100 towards issuance of legal notice is also not on the higher side.
(7) Taking all the circumstances into consideration, therefore, I am of the view that this suit is fully covered by Order 37 Rule I of the Code and the defendant has no plausible defense to the claim made by the plaintiff. Therefore, the application for leave to defend is hereby dismissed and the plaintiff is granted a decree for the recovery of Rs. 6.70,000 with costs and pending and future interest at the rate of 18 per cent per annum.