{"id":135148,"date":"2008-11-20T00:00:00","date_gmt":"2008-11-19T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/ms-saveena-enterprises-pvt-ltd-vs-ms-kalatex-and-others-on-20-november-2008"},"modified":"2016-07-18T00:31:50","modified_gmt":"2016-07-17T19:01:50","slug":"ms-saveena-enterprises-pvt-ltd-vs-ms-kalatex-and-others-on-20-november-2008","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/ms-saveena-enterprises-pvt-ltd-vs-ms-kalatex-and-others-on-20-november-2008","title":{"rendered":"M\/S Saveena Enterprises Pvt. Ltd vs M\/S Kalatex And Others on 20 November, 2008"},"content":{"rendered":"
Delhi High Court<\/div>\n
M\/S Saveena Enterprises Pvt. Ltd vs M\/S Kalatex And Others on 20 November, 2008<\/div>\n
Author: Rajiv Sahai Endlaw<\/div>\n
     *IN THE HIGH COURT OF DELHI AT NEW DELHI\n\n\n      +                  I.A.13552\/2007 in CS(OS) 1802\/2001\n\n      %                              Date of decision: 20.11.2008\n\n\n     M\/S SAVEENA ENTERPRISES PVT. LTD ... Plaintiff\n                         Through: Mr. Sanjay Poddar & Mr. Ramesh Ray,\n                                  Advocates\n\n\n                                     Versus\n\n     M\/S KALATEX AND OTHERS                            .... Defendants\n                         Through: Mr. H.S. Phoolka, Sr. Advocate & Ms.\n                                  Sunita Tiwari, Advocate\n\n\n      CORAM :-\n      HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW\n\n      1.    Whether reporters of Local papers may\n            be allowed to see the judgment?   Not necessary\n\n      2.    To be referred to the reporter or not?     Not necessary\n\n\n      3.    Whether the judgment should be reported\n            in the Digest?                        Not necessary\n\n\n\n      RAJIV SAHAI ENDLAW, J.\n<\/pre>\n
1.    The defendants seek leave to defend the suit for recovery of<\/p>\n
Rs.24,75,607\/- instituted under order 37 of the CPC.<\/p>\n
2.    It is the case in the plaint that the plaintiff has, from time to<\/p>\n
time, sold\/supplied goods to the defendant No.1 of which the other<\/p>\n
defendants are the partners.\n<\/p>\n
I.A.13552\/2007 in CS(OS) 1802\/2001                          Page 1 of 10<\/span>\n<\/p>\n
 3.    The plaintiff is stated to have affected the sale on credit. The<\/p>\n
plaintiff claims to have raised the bills for the goods sold from time to<\/p>\n
time and the defendants are stated to have acknowledged the bills in<\/p>\n
token of having received delivery of goods, and made payments from<\/p>\n
time to time. As per the table set out in the plaint, the dates of the<\/p>\n
bills of goods sold and delivered by the plaintiff to the defendants is<\/p>\n
from 20th November, 1997 to 13th February, 1998. The table shows<\/p>\n
transactions thereafter also of issuance of cheques by the defendants<\/p>\n
to the plaintiff and issuance of a debit note by the plaintiff to the<\/p>\n
defendants of the goods returned by the defendants. It is further the<\/p>\n
case in the plaint that as per the agreement, the payment was to be<\/p>\n
made within 45 days of the bill. As per the aforesaid table, as on 13th<\/p>\n
February, 1998, i.e. till the date of the supplies, a sum of<\/p>\n
Rs.20,81,875\/- was due from the defendants to the plaintiff; as on 18th<\/p>\n
August, 1998, a principal sum of Rs.14,24,352 was due and as on 9 th<\/p>\n
August, 2001, after adding interest @24% per annum from July, 1998<\/p>\n
to 9th August, 2001, a sum of Rs.24,75,607\/- was shown due from the<\/p>\n
defendants to the plaintiff.\n<\/p>\n<\/p>\n
4.    It is further the case of the plaintiff that the plaintiff on 21st<\/p>\n
August, 1998 sent a letter to the defendant No. 1 for confirming the<\/p>\n
balance outstanding against the defendant No. 1 and the defendant<\/p>\n
No. 1 sent a balance confirmation to the plaintiff through fax on 22 nd<\/p>\n
August, 1998 and as per which balance confirmation, as per the<\/p>\n
account books of the defendant No.1, as on 31st March, 1998 a sum of<\/p>\n
Rs.21,75,142\/- was due from the defendant No.1 to the plaintiff. In<\/p>\n
this regard, it may be stated that as per the statement of accounts set<\/p>\n
out by the plaintiff in the plaint, as on 23rd February, 1998 a sum of<\/p>\n
Rs.21,75,602\/- is shown due from the defendant.
\nI.A.13552\/2007 in CS(OS) 1802\/2001                           Page 2 of 10<\/span>\n<\/p>\n
 5.    It is stated that the defendants have vide fax aforesaid admitted<\/p>\n
an ascertained amount as due and payable to the plaintiff as on 31 st<\/p>\n
March, 1998. The two cheques for Rs.5 lacs each stated to have been<\/p>\n
issued by the defendants to the plaintiff were dishonoured leading to<\/p>\n
the institution of complaints of offences under section 138 of the<\/p>\n
Negotiable Instruments Act in the year 2000 itself before the court at<\/p>\n
Ghaziabad.\n<\/p>\n<\/p>\n
6.     It is the case in the plaint itself that the defendants were<\/p>\n
acquitted in the said complaint cases vide judgment dated 20th<\/p>\n
December, 2000 against which the plaintiff is stated to have preferred<\/p>\n
revision. The plaintiff after the dismissal of the complaint cases, on<\/p>\n
20th August, 2001 instituted the present suit. Para 13 of the plaint is<\/p>\n
as under:\n<\/p>\n<\/p>\n
               “That the plaintiff is filing the above suit for
\n               recovery of Rs.24,75,607.00 based on the
\n               written agreement between the parties as
\n               contemplated under order 37 of the CPC”.\n<\/p><\/blockquote>\n
7.    In para 16 of the plaint, it is stated that the cause of action for<\/p>\n
the suit accrued to the plaintiff on the dates on which the defendants<\/p>\n
failed to make payment of the outstanding amount of the bills and also<\/p>\n
on 22nd August, 1998 when the defendants admitted the liability in<\/p>\n
writing.\n<\/p>\n<\/p>\n
8.     The defendants seek leave to defend on inter-alia following<\/p>\n
grounds:-\n<\/p>\n
I.A.13552\/2007 in CS(OS) 1802\/2001                          Page 3 of 10<\/span>\n<\/p>\n
       i)                                                              t
\n              hat the suit does not fall within the ambit of and is not
\n              maintainable under Order 37 of the CPC.\n<\/p>\n<\/p>\n
      ii)                                                          t
\n              hat the claim in suit is barred by time, the supply is
\n              alleged between 20th November, 1997 to 13th
\n              February, 1998 and the rejected goods were received
\n              back on 30th July,1998 and the suit filed more than
\n              three years thereafter is ex-facie barred by time.<\/p>\n
      iii)                                                          T
\n              he plaintiff has sought to extend the time by fax
\n              communication dated 22nd August, 1998 original
\n              whereof has not been filed and the photocopy cannot
\n              be the basis of institution of a suit under order 37 of
\n              the CPC and in any case the same has been
\n              fabricated.\n<\/p>\n
      iv)                                                              A
\n              ny agreement for payment of interest is denied<\/p>\n
      v)                                                            I
\n              t is denied that the goods were supplied in time and it
\n              is claimed that the defendants suffered owing to the
\n              same.\n<\/p>\n
      vi)                                                           I
\n              t is stated that post dated cheques were received by
\n              the plaintiffs which were not returned by the plaintiff
\n              in spite of taking back the rejected goods.<\/p>\n
      vii)                                                            T
\n              he statement of accounts set out by the plaintiff in the
\n              plaint is denied and reliance is placed on the
\n              judgment dismissing the complaints under section
\n              138 of the Negotiable Instruments Act.\n<\/p>\n
      viii)                                                          I
\n              t is stated that the plaintiff did not intend to sue for
\n              recovery of money and the suit has been filed with the
\n              malafide intention only after the dismissal of the
\n              complaints.\n<\/p>\n<\/p>\n
9.    The plaintiff has filed reply to the application for leave to<\/p>\n
defend in which the plaintiff in response to the ground of the claim<\/p>\n
being barred by time has relied upon the confirmation vide fax dated<\/p>\n
22nd August, 1998 of the defendant and further stated<\/p>\n
       “even otherwise, the last transaction took place
\n       between the parties on 18.07.1998 when the debit note
\nI.A.13552\/2007 in CS(OS) 1802\/2001                              Page 4 of 10<\/span>
\n          was issued by the defendants and the period of
\n         limitation would thus start from the close of the year in
\n         the financial year ending 31st March, 1999 and the suit
\n         is admittedly within the period of three years even from
\n         this date”.\n<\/p>\n<\/p>\n
10.          The senior counsel for the defendants and the counsel for<\/p>\n
the plaintiff have been heard. Besides the judgments cited during the<\/p>\n
course of arguments, the counsel for the plaintiff has after the order<\/p>\n
was reserved also filed copies of additional judgments along with<\/p>\n
index. From a reading of the plaint, in my view, the suit would be<\/p>\n
maintainable under order 37 of the CPC only on the basis of the fax<\/p>\n
communication dated 22nd August, 1998 containing an admission of<\/p>\n
liability and not on the basis of the bills. The counsel for the plaintiff<\/p>\n
has relied upon DHL Worldwide Express Vs. Associated Buying<\/p>\n
Service 79 (1999) DLT 168, G.E. Capital Services India Vs. G.<\/p>\n
Neuro Med Diagnostic Centre Pvt. Ltd. 2007 (8) AD (Delhi) 464,<\/p>\n
Rajender Kumar Khanna Vs. Oriental Insurance Co. 41 (1990)<\/p>\n
DLT 176, Lohman Rausher GMBH Vs. Medi Sphere Marketing<\/p>\n
Pvt. Ltd. 117 (2005) DLT 95, KLG Systel Ltd. Vs. Fujitsu ICIM Ltd.<\/p>\n
92 (2001) DLT 88, M\/s. M.D. Overseas Ltd. Vs. M\/s Uma Shanker<\/p>\n
Kamal Narayan            AIR 2006 Delhi, 361 and the order dated 10th<\/p>\n
February, 2006 in I.A. No.11284 of 2003 in CS (OS) 1221 of 2002 of<\/p>\n
this court to contend that a suit under order 37 of the CPC would lie<\/p>\n
on the basis of bills of supply of goods coupled with a statement of<\/p>\n
accounts and on the parameters to be followed in grant of leave to<\/p>\n
defendants and imposition of conditions while granting leave to<\/p>\n
defend and has contended that though the defence of the defendants<\/p>\n
is    ex-facie   false   as   borne   out   from   the   contemporaneous<\/p>\n
correspondence, copies whereof though not referred to in the plaint<\/p>\n
or filed therewith, were subsequently filed and stated to be forming<\/p>\n
part of application for summons for judgment, if at all leave is to be<\/p>\n
I.A.13552\/2007 in CS(OS) 1802\/2001                            Page 5 of 10<\/span>
\n granted, the same ought to be on condition of deposit. The counsel,<\/p>\n
during the course of hearing had also relied upon Ramjan Ali Vs.<\/p>\n
Khawja Meer Ahmed AIR 1940 Patna 6 on section 19 of the<\/p>\n
Limitation Act.\n<\/p>\n<\/p>\n
11.          Per contra, the senior counsel for the defendants has<\/p>\n
relied upon M\/s Sunil Enterprises Vs. SBI Commercial &<\/p>\n
International Bank AIR 1998 SC 2317, State Bank of Saurashtra<\/p>\n
Vs. Ashit Shipping Services Pvt. Ltd. AIR 2002 SC 1993 and John<\/p>\n
Impex Pvt. Ltd. Vs. Surender Singh (2003) 9 SCC 176 (though with<\/p>\n
respect to leave to defend under Rent Act) and urged that in the<\/p>\n
present case, the defence of the defendants cannot be said to be<\/p>\n
frivolous.\n<\/p>\n<\/p>\n
12.          The law is now settled that a suit under order 37 of the<\/p>\n
CPC, would lie on the basis of bills evidencing an agreement of sale of<\/p>\n
goods.   I, however, do not find the plaintiff to have instituted the<\/p>\n
present suit on the basis of the said bills.   A suit under order 37 on<\/p>\n
the basis of bills would be maintainable when the amount of the bills<\/p>\n
is claimed. In the present case, it is not the amount of the bills but<\/p>\n
the amount claimed due after taking into account the payments made<\/p>\n
and the value of the goods returned. Such amount due ceases to have<\/p>\n
a character of the bill amount and upon dispute being raised by the<\/p>\n
opposite party, the suit under order 37 would not be maintainable.<\/p>\n
The suit has been instituted on the basis of a statement of accounts<\/p>\n
coupled with admission of liability. It is the case of the plaintiff itself<\/p>\n
that the bills were payable within 45 days of the date of the bill. As<\/p>\n
aforesaid, the last of the bills alleged is of 13th February, 1998. The<\/p>\n
I.A.13552\/2007 in CS(OS) 1802\/2001                            Page 6 of 10<\/span>
\n suit was instituted more than three years after 45 days of the last bill.<\/p>\n
Article 15 of the Schedule 1 of the Limitation Act prescribes a period<\/p>\n
of three years to institute a suit for the price of goods sold and<\/p>\n
delivered to be paid after the expiry of a fixed period of credit,<\/p>\n
commencing from the date when the period of credit expires. Section<\/p>\n
18 of the Limitation Act extends the period of limitation from the date<\/p>\n
when an acknowledgement of liability is made in writing.               The<\/p>\n
acknowledgement of liability claimed by the plaintiff in the present<\/p>\n
case is not of liability for payment of the amount of any bills but of the<\/p>\n
amount due under the statement of accounts. The fact that the<\/p>\n
plaintiff has not sued on the bills but on a statement of accounts<\/p>\n
coupled with acknowledgment is further borne out from the portion<\/p>\n
earlier set out of the reply of the plaintiff to the application for leave<\/p>\n
to defend whereby also the plaintiff has sought to bring the claim in<\/p>\n
suit within time applying the Articles in Schedule 1 of the Limitation<\/p>\n
Act relating to a suit for accounts. A suit for the balance due on an<\/p>\n
account does not fall within the domain of order 37 of the CPC.<\/p>\n
13.         Thus as aforesaid, the suit under order 37 would lie only<\/p>\n
on the acknowledgment dated 22 August, 1998 alleged by the<\/p>\n
plaintiff. The plaintiff claims to have filed the original fax dated 22nd<\/p>\n
August, 1998 containing admission of liability in the proceedings<\/p>\n
under section 138 of the Negotiable Act and has filed a certified copy<\/p>\n
thereof in this court. The senior counsel for the defendants on<\/p>\n
instructions has denied that the original fax has been filed in those<\/p>\n
proceedings and has argued that only a photocopy has been filed in<\/p>\n
those proceedings also.\n<\/p>\n
I.A.13552\/2007 in CS(OS) 1802\/2001                            Page 7 of 10<\/span>\n<\/p>\n
 14.          Though, the counsel for the plaintiff has on the basis of<\/p>\n
the contemporaneous correspondence argued that the fax dated 22nd<\/p>\n
August, 1998 is in the normal course of the ensuing commercial<\/p>\n
correspondence between the parties and that the said fax ought to be<\/p>\n
believed by this court but the fact remains that the suit was not filed<\/p>\n
basing on the said correspondence and copies thereof were not even<\/p>\n
filed along with the suit. I do not consider it appropriate to consider<\/p>\n
such correspondence at this stage.\n<\/p>\n<\/p>\n
15.          In my view, the defendants are entitled in this case to<\/p>\n
unconditional leave to defend for the following reasons:-<\/p>\n
      A.                                                                   T<\/p>\n
           he plaintiff having for a period of more than three<\/p>\n
           years not instituted the suit for recovery of money and<\/p>\n
           having instituted the same only after dismissal of the<\/p>\n
           complaints under section 138 of the         Negotiable<\/p>\n
           Instruments Act.\n<\/p>\n
      B.                                                                   T<\/p>\n
           he decision whether the claim in suit within time or<\/p>\n
           not is dependent upon the fax dated 22nd August, 1998<\/p>\n
           aforesaid, the existence and dispatch whereof by the<\/p>\n
           defendant is seriously disputed.\n<\/p>\n
      C.                                                                   T<\/p>\n
           he fax being signed by the “authorized representative”<\/p>\n
           of the defendants and not by any of the partners of the<\/p>\n
           defendants.\n<\/p>\n
      D.                                                                   T<\/p>\n
           he name of the said authorized representatives of the<\/p>\n
I.A.13552\/2007 in CS(OS) 1802\/2001                          Page 8 of 10<\/span>
\n            defendants having not been disclosed anywhere, even<\/p>\n
           though    the     plaintiff   has    in    contemporaneous<\/p>\n
           correspondence shown another letter purportedly<\/p>\n
           signed by the same authorized representative.<\/p>\n
      E.                                                                            T<\/p>\n
           he complaint under section 138 of the Negotiable<\/p>\n
           Instruments Act with respect to the cheques given by<\/p>\n
           the defendants for payment of nearly the entire<\/p>\n
           principal amount claimed to be due having been<\/p>\n
           dismissed by the first court. Even though, the copy of<\/p>\n
           the said judgment has not been placed on the file but<\/p>\n
           the factum is admitted. On further inquiry, it has been<\/p>\n
           revealed that the complaints have been dismissed on<\/p>\n
           merits   after    recording    of    evidence     and   cross-<\/p>\n
           examination of witnesses. The fax forming the basis of<\/p>\n
           claim of the plaintiffs in the present suit and denied by<\/p>\n
           the defendants was admittedly before that court also.<\/p>\n
           That court has after trial not found offence U\/s 138<\/p>\n
           Negotiable      Instruments    Act    to   have    been     not<\/p>\n
           committed by the defendants. Thus in the face of one<\/p>\n
           court after trial having disbelieved the principal<\/p>\n
           amount to have been due from the defendants to the<\/p>\n
           plaintiff, even though the revision against the same is<\/p>\n
           stated to be pending, the defence of the defendants is<\/p>\n
           not found to be such as to deprive the defendants of<\/p>\n
           an opportunity to lead evidence.\n<\/p>\n<\/p>\n
16.          In Babbar Vision India Pvt. Ltd. Vs. Rama Vision Ltd.<\/p>\n
99 (2002) DLT 556 Division Bench of this court has held that when<\/p>\n
I.A.13552\/2007 in CS(OS) 1802\/2001                                   Page 9 of 10<\/span>
\n defence raises a triable issue, leave must be granted unconditionally,<\/p>\n
whether the defence is legal or equitable and even though it may not<\/p>\n
ultimately turn out to be a good defence.     The Apex Court also in<\/p>\n
Milkhi Ram India Pvt. Ltd. Vs. Chaman Lal Brothers AIR 1965<\/p>\n
SC1698 held that only when the court comes to the conclusion that<\/p>\n
the defence is a sham one or is a fantastic or highly improbable,<\/p>\n
would the court be justified in putting the defendant upon terms<\/p>\n
before granting leave to defend. In the present case in the light of the<\/p>\n
judgment of the court first trying the offence under section 138<\/p>\n
Negotiable Instruments Act in favour of the defendants and in the<\/p>\n
light of the claims in suit but for the alleged acknowledgement being<\/p>\n
barred by the time, the defence is not found to be a sham or a<\/p>\n
fantastic defence.\n<\/p>\n<\/p>\n
17.         The application of the defendants is thus allowed, the<\/p>\n
defendants are granted unconditional leave to defend.<\/p>\n
                                            RAJIV SAHAI ENDLAW
\n                                                     JUDGE
\nNovember 20, 2008
\nPP<\/p>\n
I.A.13552\/2007 in CS(OS) 1802\/2001                          Page 10 of 10<\/span>\n <\/p>\n","protected":false},"excerpt":{"rendered":"
Delhi High Court M\/S Saveena Enterprises Pvt. Ltd vs M\/S Kalatex And Others on 20 November, 2008 Author: Rajiv Sahai Endlaw *IN THE HIGH COURT OF DELHI AT NEW DELHI + I.A.13552\/2007 in CS(OS) 1802\/2001 % Date of decision: 20.11.2008 M\/S SAVEENA ENTERPRISES PVT. LTD … Plaintiff Through: Mr. Sanjay Poddar & Mr. Ramesh Ray, […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[14,8],"tags":[],"class_list":["post-135148","post","type-post","status-publish","format-standard","hentry","category-delhi-high-court","category-high-court"],"yoast_head":"\nM\/S Saveena Enterprises Pvt. 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