M/S Mist Avenue Pvt. Ltd vs M/S. Jms Steels & Power Corporation & Another

S. No.,Date,"Particulars of

Bill Raised",Amount

1.,27.03.2015,1629,"Rs.15,08,357/-

2.,29.04.2015,1630,"Rs.14,72,269/-

3.,02.04.2015,02,"Rs.13,34,319/-

4.,27.05.2015,148,"Rs.10,34,103/-

5.,29.05.2015,155,"Rs.10,91,667/-

court also records that the appellant/defendant no.1 does not dispute in its leave to defend application that the two cheques as stated in para 9 of the,,,

plaint were issued by the appellant/defendant no.1. The relevant observations of the trial court in this regard are contained in para 13 to 15 of the,,,

impugned judgment and these paras read as under:-,,,

“13. The arguments advanced by Counsel for defendant no.-1 that defendant no.-1 had no privity of contract with the plaintiff or that defendant,,,

no.-2 was liable to pay for the goods supplied by the plaintiff are also without any merits. Plaintiff has placed on record statement of ledger account,,,

which shows that defendant no.-1 had been making payments to the plaintiff from time to time. Plaintiff has given a number of cheques issued by the,,,

defendant no.-1 in favour of plaintiff from time to time. Statement of account of the defendant no.-1 also show transfer of money by RTGS by,,,

defendant no.-1 in the accounts of the plaintiff on 11.12.2014, 13.12.2014 and 10.02.2015. These payments are besides other payments made through",,,

cheques and demand drafts on 16.12.2014, 13.01.2015, 21.01.2015, 10.02.2015, 11.02.2015 and 03.03.2015. All these transactions clearly indicate that",,,

the material were being supplied by the plaintiff to the site address of defendant no.-1 and defendant no.-1 had been making payments directly to the,,,

plaintiff. Therefore, the defence raised by defendant no.-1 that there is no privity of contract between the parties or that the goods were supplied to",,,

defendant no.-2 are without any substance and does not give rise to any triable issues.,,,

Defendant no.-1 has also not denied in the application for leave to defend about the issuance of two cheques to the plaintiff. If there was no privity,,,

of contract between the parties, why these cheques issued by the defendant no.-1. Defendant no.-1 has failed to give any explanation in this regard.",,,

Rather, defendant no.-1 has taken a stand that the suit under Order 37 is not maintainable as the plaintiff did not present these cheques for",,,

encashment. In my considered opinion, the present case is not merely based on the aforesaid two cheques but is also based on the purchase orders",,,

issued by defendant no.-2 and invoices raised by plaintiff for supply of materials.,,,

In Lohmann Rausher Gmbh Vs. Medisphere Marketing Pvt Ltd.(2004) 117 DLT 95(DB), it was held that invoices are a complete contract within the",,,

contemplation of Order 37 Rule 2 CPC. It is not the case of the defendants that invoices do not confirmed to the purchase orders. All features,,,

pertaining to the contract of sale of goods are reflected in the invoices and these invoices are complete contract, required by law where the contract",,,

pertains to sale of goods.,,,

The invoices issued by the plaintiff have been addressed to the site address of defendant no.-1 and the goods have been received by defendant,,,

no.-2 acting as an agent of defendant no.-1. Therefore, both the defendants are under an obligation to make payments of the goods supplied by the",,,

plaintiffâ€​,,,

In my opinion, no fault can be found in the impugned judgment because the appellant/defendant no. 1 was admittedly the owner of the project. It is",,,

the owner of the project being the appellant/defendant no. 1 who had made itself jointly and severally liable because admittedly various payments have,,,

been made by the appellant/defendant no.1 to the respondent no.1/plaintiff and as detailed in the ledger account of the respondent no.1/plaintiff, with",,,

the fact that two original cheques issued by the appellant/defendant no.1 in favour of the respondent no.1/plaintiff have been filed alongwith the suit,,,

plaint. Clearly therefore, trial court was justified in holding that there was liability of the appellant/defendant no. 1.",,,

9(i) Learned senior counsel for the appellant/defendant no.1 argued by placing reliance upon Clause28 of the Construction Contract entered into in,,,

November, 2004 between the appellant/defendant no. 1 and the respondent no.2/defendant no. 2 to argue that the relationship between the appellant",,,

and respondent no. 2 were of ‘principal to principal basis’ and therefore material purchased in question was only the liability for payment by the,,,

respondent no.2/defendant no.2 and not the appellant/defendant no. 1.,,,

(ii) I however cannot agree with this argument urged by the appellant/defendant no.1 because if there was no liability of the appellant/defendant no.1,,,

then there was no reason why appellant/defendant no.1 would have repeatedly issued various cheques from time to time for making payment to the,,,

respondent no. 1/plaintiff, and as discussed in detail by the trial court in paras 13 and 14 of its impugned judgment.",,,

I may note that an appeal was filed by the respondent no. 2/defendant no. 2 in the suit against the self same impugned judgment of the trial court,,,

dated 18.9.2017, and that appeal of defendant no.2 in the suit, respondent no. 2 herein, being RFA 402/2018, was dismissed by a detailed judgment",,,

dated 11.5.2018. In the judgment dated 11.5.2018 it is observed that liability of both the defendants in the suit i.e. appellant/defendant no.1 and the,,,

respondent no.2/defendant no.2 is joint and several.,,,

The principles with respect to grant of leave to defend have been recently summarized by the judgment of the Supreme Court in the case of IDBI,,,

Trusteeship Services Ltd. Vs. Hubtown Ltd., (2017) 1 SCC 568, and the relevant paras of this judgment read as under:-",,,

Accordingly, the principles stated in paragraph 8 of Mechelec's case will now stand superseded, given the amendment of Order XXXVII Rule 3,",,,

and the binding decision of four judges in Milkhiram's case, as follows:",,,

17.1. If the defendant satisfies the Court that he has a substantial defence, that is, a defence that is likely to succeed, the Plaintiff is not entitled to",,,

leave to sign judgment, and the Defendant is entitled to unconditional leave to defend the suit.",,,

17.2 If the defendant raises triable issues indicating that he has a fair or reasonable defence, although not a positively good defence, the Plaintiff is not",,,

entitled to sign judgment, and the Defendant is ordinarily entitled to unconditional leave to defend.",,,

17.3 Even if the Defendant raises triable issues, if a doubt is left with the trial judge about the Defendant's good faith, or the genuineness of the triable",,,

issues, the trial judge may impose conditions both as to time or mode of trial, as well as payment into court or furnishing security. Care must be taken",,,

to see that the object of the provisions to assist expeditious disposal of commercial causes is not defeated. Care must also be taken to see that such,,,

triable issues are not shut out by unduly severe orders as to deposit or security.,,,

17.4 If the Defendant raises a defence which is plausible but improbable, the trial Judge may impose conditions as to time or mode of trial, as well as",,,

payment into court, or furnishing security. As such a defence does not raise triable issues, conditions as to deposit or security or both can extend to the",,,

entire principal sum together with such interest as the court feels the justice of the case requires.,,,

17.5 If the Defendant has no substantial defence and/or raises no genuine triable issues, and the court finds such defence to be frivolous or vexatious,",,,

then leave to defend the suit shall be refused, and the Plaintiff is entitled to judgment forthwith.",,,

17.6 If any part of the amount claimed by the Plaintiff is admitted by the Defendant to be due from him, leave to defend the suit, (even if triable issues",,,

or a substantial defence is raised), shall not be granted unless the amount so admitted to be due is deposited by the Defendant in court.""",,,

In terms of the ratio of the judgment of the Supreme Court in the case of IDBI Trusteeship Services Ltd. (supra) once the defences are frivolous,,,

and vexatious and do not raise any genuine triable issues, application seeking leave to defend has to be dismissed. The defence of the",,,

appellant/defendant no. 1 was clearly frivolous or vexatious, and it did not raise a genuine triable issue, because if there was no liability of the",,,

appellant/defendant no.1, then, where was the question of making payments regularly by the appellant/defendant no.1 to the respondent no.1/plaintiff.",,,

There is no merit in the appeal. Dismissed.,,,