Ramesh Co. Vs Imperial Tubes Private Limited

Debangsu Basak, J

In a suit for recovery of price of goods sold and delivered, the plaintiff by this application, seeks a judgment and decree for admission for a sum of Rs.5,79,58,608/- and an order of injunction on the defendant.

Learned senior advocate appearing for the plaintiff submits that, pursuant to orders placed by the defendant from time to time the plaintiff sold and delivered diverse goods to the defendant. The plaintiff from time to time raised invoices upon the defendant. The goods and the invoices of the plaintiff were accepted without any demur. The defendant made on account of payments from time to time to the plaintiff. The parties prepared statement of accounts of the transactions and confirmed the outstanding at the end of the Financial Year. He draws the attention of the Court to the confirmation of accounts executed by the parties dated April 1, 2016, April 1, 2017 and April 1, 2018. He submits that, by the confirmation of accounts stated in April 1, 2018, the defendant acknowledged a sum of Rs.5,88,06,294/- to be due and payable to the plaintiff. Subsequent thereto, the plaintiff sold and delivered goods and raised two invoices for the same. The defendant made a part payment of Rs.30 lakhs. Taking into account those transactions subsequent to April 1, 2018, a sum of Rs.5,79,58,608/-became due and payable by the defendant to the plaintiff as on August 11, 2018. He submits that, although the statement of account dated August 11, 2018 is not signed by the parties, the transactions reflected therein are not denied by the parties and that, the same inures to the benefit of the defendant in as much as it gives credit to the amount paid by the defendant subsequent to April, 2018 as well. He points out that, taking the account position as on August 11, 2018, the liability of the defendant stands reduced.

Referring to the affidavits filed by the parties, learned senior advocate appearing for the plaintiff submits that, although the defendant seeks to raise an issue of inferior supplies being effected by the plaintiff, the same was not raised contemporaneously. The defendant did not point out contemporaneously the portions of the supplies that were inferior. The defendant continued to place orders and make part payments despite the supply of the so-called inferior quality goods. He submits that, the defence of inferior quality supply is moonshine. Even in the affidavit in opposition, the defendant did not specify the portions of the supplies that were of inferior quality. Therefore, he submits that, the defence sought to be taken by the defendant should not be countenanced.

Learned advocate appearing for the defendant submits that, the plaintiff initiated a proceeding under Section 9 of the Insolvency and Bankruptcy Code, 2016 before the National Company Law Tribunal, Kolkata against the defendant on the basis of the selfsame transactions. The same is yet to be finally adjudicated.

Learned counsel appearing for the defendant referring to the balance acknowledgements, submits that, the admission can be explained by the defendant. In an application for judgment on admission, the defendant is entitled to explain the admissions. He relies upon 2018 OnLine Cal 456 (Scope Vincom Industries Private Limited versus

Sitaram Sultania) in support of his contentions. He submits that, there are trialable issues raised in the suit. The Court, therefore, should not pass a judgment and decree on admission.

Expanding on his contention of trialable issues, raised learned advocate appearing for the defendant submits that, there are at least three letters emanating out of defendant claiming that, the goods were of inferior quality. He draws the attention of the Court to such letters as also some of the response given by the plaintiff with regard thereto. He points out that, contemporaneously the defendant corresponded with one Mr. Pankaj Sharma of the plaintiff. In the supplementary affidavit sought to be relied upon by the plaintiff, such Mr. Pankaj Sharma claims that he did not write those letters and that, they are forged. He submits that, therefore, the issue of forgery is raised. Till such an issue is decided a judgment on admission should not be passed.

The Court is considering an application for judgment on admission.

The Division Bench in Scope Vincom Industries Pvt. Ltd. (supra) is of the following view with regard to the parameters that are to be taken into consideration while deciding an application for judgment on admission:

"8. It is elementary that when a suitor seeks a judgment on admission, there is no real adjudication that is undertaken by the Court. There has to be a clear admission to begin with, which the defendant has a chance to explain away. The extent of the adjudicatory exercise undertaken by a court is to assess whether the explanation is good enough for the admission to be doubted or displaced. However, the admission has to be evident from a document or the like issued by the person against whom the judgment is sought."

In Scope Vincom Industries Pvt. Ltd. (supra), the Division Bench, after noticing the facts in that case, found that, there was no unconditional acknowledgement of liability to pass a judgment and decree on admission. It found that documents disclosed by the plaintiff itself destroyed the so-called admission of the defendant.

In the facts of the present case there are three acknowledgements of accounts dated April 1, 2016, April 1, 2017 and April 1, 2018. The fact that the accounts are signed by the parties are not disputed. The entries in the confirmation of accounts are not disputed. What the defendant dispute is the quality of the supplies effected by the plaintiff. The defendant contend that the supplies were of inferior quality and, therefore, the defendant suffered loss and since the loss are yet to be adjudicated, a judgment and decree on admission need not be passed.

The letter in support of the issue of inferior quality raised by the defendant contemporaneously is dated March 2, 2017. Such letter, or any letter of the defendant however, does not specify the quantity of the inferior supplies. They do not furnish any particulars as to the alleged inferior supply such as the invoice in which the inferior supply was made. In fact, the affidavit-in-opposition of the defendant and the subsequent affidavits of the defendant, as rightly pointed out on behalf of the plaintiff, do not contain any statement quantifying the nature and extent of the inferior supplies. Subsequent to the letter dated March 2, 2017, the defendant placed diverse orders on the plaintiff and received materials from the plaintiff. The defendant made various part payments to the plaintiff subsequent to March 2, 2017. Therefore, without the defendant itself quantifying and pinpointing the so called inferior supplies, the stand taken by the defendant cannot be accepted as sacrosanct or to raise a trialable issue. There is overwhelming evidence in favour of the plaintiff to establish that, the supplies were received unconditionally, the invoices raised by the plaintiff were also received unconditionally and that, the defendant made part payments to the plaintiff in part discharge of their liability. Unlike the facts in Scope Vincom Industries Pvt. Ltd. (supra) there is no contemporaneous document on record to discredit the claim of the plaintiff or destroy it. It is the contention of the defendant that there is an issue of forgery which is required to be decided before a judgment and decree on admission can be passed. In a suit for recovery of price of goods sold and delivered and in an application for judgment and decree on admission therein, a defendant can set up a defence of forgery. Such defence is required to be evaluated so as to arrive at a finding whether such defence is one of moonshine or of substance. In the facts of the present case, the defendant claims that one Mr. Pankaj Sharma issued certain letters to the defendant. Such Mr. Pankaj Sharma by way of an affidavit denies having issued such letters. These letters apparently relate to the alleged loss that the defendants suffered by way of the inferior supplies effected by the plaintiff. Again as noted above neither contemporaneously nor in the affidavits filed by the defendant, did the defendant point out any part or portion of the supplies effected by the plaintiff to be of inferior quality resulting into the loss and damages to the defendant. Therefore, the defence sought to be raised by the plaintiff on such score cannot be accepted.

The pendency of the proceedings under the Insolvency and Bankruptcy Code, 2016 is no bar to the present suit being heard and decided. The jurisdiction of the two fora are different.

The plaintiff seeks a decree for a sum of Rs.5,79,58,608/-. The three confirmation of accounts dated April 1, 2016, April 1, 2017 and April 1, 2018 are signed by the parties. Signatures are not disputed. Contents are not disputed. There is a confirmation of accounts dated August 11, 2018 which is not signed by the parties. It reflects transactions subsequent to the confirmation of account dated April 1, 2018. The transactions subsequent to confirmation of account dated April 1, 2018 as reflected by the confirmation of account dated August 11, 2018 are not denied and disputed by the parties. In such circumstances, it would be appropriate to take into account the transactions reflected in the confirmation of account dated August 11, 2018 while deciding the issue on the quantum of decree that may be passed in favour of the plaintiff.

The confirmation of account dated August 11, 2018 shows an outstanding amount of Rs.5,79,58,608/-due and payable by the defendant to the plaintiff.

In such circumstances, there will be a judgment and decree upon admission for a sum of Rs.5,79,58,608/- as against the defendant. There being no prayer for interest, the same is kept open to be decided at the suit.

Learned advocate appearing for the defendant waives service of writ of summons. A copy of the plaint is served upon the learned advocate-on-record for the defendant in Court. The defendant is at liberty to file written statement within four weeks from date.

Old GA No.2598 of 2019, New GA No.1 of 2019 in CS No.254 of 2019 is disposed of without any order as to costs.