Full Text
HIGH COURT OF DELHI
JUDGMENT
M/S A V INDUSTRIES ..... Petitioner
Advocates who appeared in this case:
For the Petitioner: Mr. Deepak Bashta, Advocate.
For the Respondent: Mr. Gaurav Puri, Advocate.
HON'BLE MR. JUSTICE TUSHAR RAO GEDELA
[ The proceeding has been conducted through Hybrid mode ]
1. This is a Regular First Appeal under Section 96 read with Order XLI Rule 1 of the Code of Civil Procedure, 1908 (hereinafter referred to as “CPC”) and Section 13 of the Commercial Courts Act, 2015 (hereinafter referred to “CC Act”) by the appellant/defendant challenging the impugned judgement and decree dated 21.09.2020 passed by District Judge (Commercial Court) - 01, South-East District, Saket Courts, Delhi in CS (Comm.) No. 253/2019 titled “M/s Neo Neon Electrical Pvt Ltd V M/s A.V.Industries”.
2. The facts in brief, germane to the present lis and as culled out from the impugned judgement are as under:- 2.[1] Respondent/plaintiff contends that it is a private company and running its business for the last 20 years involved in manufacturing and trading of LED light etc., since January 2018. 2.[2] The appellant/defendant approached the respondent/plaintiff at his registered office stating that he was involved in making LED bulbs and other accessories and on his representation and assurance of timely deliverance, the respondent/plaintiff provided the appellant/defendant the job work for making LED bulbs and paid Rs 6,00,000/- by way of cheque and started maintaining its running account with the appellant/defendant. 2.[3] In the month of February 2018, the appellant/defendant purchased the material/flood lights on credit basis from the respondent/plaintiff of Rs.26,992/- against the invoice no. NN/17- 18/244 dated 07.02.2018. 2.[4] That due to the utter default on the part of the Appellant/Defendant in completion of the job work given, the respondent/plaintiff asked for the refund of advance paid for the said job work and despite repeated demands, the appellant/defendant paid only Rs. 2,00,000/- to the respondent/plaintiff through cheque dated 09.03.2018 and failed to pay the remaining balance amount of Rs.4,26,992/- which is outstanding as per the statement of account maintained by the Respondent/Plaintiff. 2.[5] Thereafter, the suit for recovery was filed under the provisions of CC Act by the Respondent/Plaintiff for an amount of Rs. 4,26,992/alongwith interest @ 24% per annum seeking the following reliefs: a. Pass a decree for Rs. 4,26,992/- (Rupees Four Lakhs Twenty Six Thousand Nine Hundred and Nine Two Only) against the defendant and in favour of the plaintiff and b. Pass Order and decree for payment of interest at the rate of 24% on Rs.4,26,992/- (Rupees Four Lakhs Twenty Six Thousand Nine Hundred and Nine Two Only) calculated from the date of institution of the Suit till the actual institution of the Suit till the actual realization, of the decreetal amount, against the Defendant and in favour of the Plaintiff, and c. Pass a decree for the cost of the Suit and litigation charges may also pass against the defendant and in favour of the Plaintiff. 2.[6] The summons of the said suit was served on the appellant/defendant through registered post on 23.09.2019 as also through WhatsApp on 20.09.2019 respectively. However, the appellant/defendant was proceeded ex-parte on 09.10.2019 due to his non appearance. 2.[7] Thereafter, the respondent/plaintiff has lead ex-parte evidence by examining PW[1], Director of the company by way of affidavit (Ex. PW1/1) and PW[2], Branch Manager of Kotak Mahindra Bank was also examined to prove the statement of account (Ex. PW2/1) in order to prove the payment of Rs.6,00,000/- had been made to the appellant/defendant through cheque (Ex. PW1/F). 2.[8] Finally, the learned Trial Court on the basis of the evidence on record held that the respondent/plaintiff is entitled to the recovery of Rs.4,26,992/- @ 12% interest per annum from the date of filing of the suit till the realization of the decreetal amount.
ARGUMENTS ON BEHALF OF THE APPELLANT/ DEFENDANT
3. Mr. Deepak Bashta, learned counsel appearing for the appellant/defendant, at the very outset being conscious of the fact that the appellant/defendant was proceeded ex-parte, contends that the arguments on behalf of the appellant/defendant would squarely be concerning the legal issues only and not the factual matrix revolving around the transactions in questions.
4. With such prologue, Mr. Bashta, learned counsel appearing for the appellant/defendant, challenges the impugned judgement and had basically raised three fold arguments on the basis of the legal infirmities with which impugned judgement suffers from and accordingly put forth his submissions. In that, Learned Counsel for the appellant/defendant majorly argues that the learned Trial Court had gravely erred in entertaining and deciding the suit without having the competent territorial jurisdiction to try the plaint in the first place itself. Learned counsel further submits that, that apart, the plaint so filed is itself lacking from conforming to the mandatory compliances as laid down by the CC Act. Lastly, learned counsel further contends that the documents supporting the pleadings are in itself dehors of any shred of evidence which forms the basis of cause of action of the grant of job work and payments made thereto, premised on which the suit was filed.
5. Learned counsel appearing for the appellant/defendant, in furtherance of the said submissions, laid emphasis, firstly, on the aspect of Court of competent territorial jurisdiction to try the suit in question. In that, learned counsel submits that the learned trial court is bereft of the territorial jurisdiction, on the basis that the statement made by the respondent/plaintiff is false. Learned Counsel submits that the documents filed alongwith the plaint before the learned Trial Court clearly demonstrate that the entire transaction took place between the appellant/defendant and the respondent/plaintiff at Noida and not at Delhi. Learned counsel invites attention of this Court to the Authorization Letter dated 19.02.2019 wherein the address of the respondent/plaintiff is shown as A-151, Sector-83, Phase II, Noida. He further points out to invoices, bank account statement of the respondent/plaintiff to show that documents attached with plaint are clearly without any doubt, evidenced that the respondent/plaintiff operates from Noida, Uttar Pradesh and being conscious of the same had deliberately and intentionally tried to invoke the jurisdiction of the Court at Delhi on the basis of false and patently incoherent pleadings, which led the learned Trial Court to erred gravely while assuming the jurisdiction to entertain the present suit in question.
6. Secondly, learned counsel appearing for the appellant/defendant laid emphasis on the fact that the respondent/plaintiff has not exhausted the remedy of pre-institution mediation in terms of Section 12A of the CC Act, which is a mandatory compliance to conform to while filing the commercial suit. Learned counsel further submits that such default in compliance of a mandatory provision would make the suit non est since its inception.
7. Learned counsel further submits that the respondent/plaintiff did not file the Statement of Truth as per Order VI Rule 15A of CPC as amended by the CC Act and the learned Trial Court ought to have struck off the pleadings which have not been verified by a Statement of Truth in accordance with Order VI Rule 15A (5) of CPC as amended by the CC Act. He also submits that according to the provisions of the CC Act, pleadings, particularly the plaint, if not supported with the Statement of Truth, cannot be read in evidence and can be struck off too. Thus, he submits that there being no plaint laid in accordance with law, decree as passed is nullity in law.
8. Thirdly and lastly, learned counsel further contends that the cause of action for filing the present suit stems from the fact of payment made for job work of manufacturing of LED Lights and noncompletion/default thereof, raised the grievance for refund of the said amount paid to the appellant/defendant by the respondent/plaintiff. Learned counsel without going into the merits of the case, submits that no document worth the name in the nature of job work order has at all been filed by the respondent/plaintiff alongwith the plaint or anytime later. In that, he further submits that there is no way of ascertaining the nature, conditions and specifications of the job work being granted which could atleast, prima facie, show the basis of cause of action. He submits that in absence of the same, the grounds so raised are utterly flimsy and imaginative and the learned trial court should have been cautious while decreeing the suit as to how the respondent/plaintiff has assumed that the courts at Delhi have the territorial jurisdiction to adjudicate the dispute.
9. Learned counsel also submits that there is no document worth its salt to even remotely indicate that the courts at Delhi have any territorial jurisdiction at all. Thus, according to learned counsel, the learned trial court could not have entertained the suit of the respondent/plaintiff and the decree as such is yet again susceptible to be declared non est.
ARGUMENTS ON BEHALF OF THE RESPONDENT/ PLAINTIFF
10. Per contra, Mr. Puri, the learned counsel appearing for the respondent/plaintiff at the very outset submits that vide order dated 07.01.2020 though being at that point of time the appellant/defendant has already proceeded ex-parte on 09.10.2019, appellant/defendant has appeared before the learned Trial Court and the learned Trial Court has given an opportunity to file an appropriate application, but the appellant/defendant choose not to file any application before the learned Trial Court and choose to file the present appeal. Learned counsel has argued having chosen not to appear before the learned trial court, the appellant/defendant is now precluded from raising the aforesaid contentions.
11. On that basis, the learned counsel requests that considering the nature and facts as presently available, the present appeal is liable to be dismissed.
12. Learned counsel for the respondent/plaintiff, so far as the legal objections raised by the appellant/defendant is concerned, further submits that the respondent/plaintiff had duly annexed the Board Resolution dated 19.02.2019 in which it was clearly stated the meeting was held at Delhi alongwith the Certificate of Incorporation of respondent/plaintiff having registered office at Delhi and submits that since the its inception of the Respondent/Plaintiff company has been operating from the Delhi address only.
13. Learned counsel for the respondent/plaintiff further submits that since the said job work was initiated from Delhi address only, in the form of board resolution meeting and subsequently by the issuance of payment through the cheque from Delhi, the territorial jurisdiction rests with the competent courts at Delhi and therefore, the learned Trial Court was very much in its power and has the jurisdiction to try and deal with the present matter and had even rightly done so.
14. Learned counsel while inviting attention of this Court to page 93 of the paper book had directly targeted the argument of noncompliance of Section 12A of the Act, and submits that the appellant/defendant itself in the appeal has filed the Non-Starter Report issued by District Legal Services Authority, South-West District, Saket Courts as per Section 12A of CC Act, and therefore the respondent/plaintiff had duly complied with the mandatory provision of Section 12A of CC Act.
15. Learned counsel further submitted that the respondent/plaintiff filed the suit for recovery of money and the same was filed in the Court of competent ordinary civil jurisdiction, due to non establishment of the Commercial Courts as per CC Act, in the Saket Court Complex and it was only later in the time, that the Commercial Courts were established and the matter was transferred to the concerned District Judge (Commercial Courts) vide order/notification No. 316 dated 07.12.2019 and by that point of time the appellant/defendant was already proceeded ex-parte on 09.10.2019.
16. Learned counsel had very vehemently put forth his submission in this regard that even learned Trial Court did not direct the respondent/plaintiff to file the Statement of Truth after such transfer to the designated Commercial Court from the ordinary civil court. Learned counsel thus submits that respondent/plaintiff cannot be held at fault for non-compliance even when the concerned commercial courts as per the CC Act was itself not established in the concerned territorial jurisdiction. Learned counsel further argues that filing of statement of truth is a procedural irregularity and a curable defect and arguments so raised at the stage of appeal cannot render the decree passed a nullity when the appellant/defendant though proceeded exparte had appeared and was duly provided with the opportunity for filing an appropriate application. Learned counsel thus finally argued, failure of taking such procedural objections at the stage of trial and now raising the same, should not be considered at this stage as neither the same could render the decree a nullity nor they are in the interests of justice and equity.
ANALYSIS OF THE COURT
17. We have considered the submissions of the counsel for the parties as also the pleadings of the learned Trial Court and render our findings and conclusions as under.
18. Some undisputed facts that may be noted are: a. That the respondent/plaintiff filed a Commercial Suit for recovery of Rs. 4,26,992/- from the appellant/defendant before the District Courts at Saket under the CC Act. Though, the suit was indeed filed under the provisions of CC Act, yet no Statement of Truth as stipulated thereunder was filed alongwith the plaint, or anytime later till the ex-parte judgement and decree was passed. b. From the perusal of the certified copy of the order sheet dated 07.01.2020 annexed at page 74 of the present petition, it can be seen one of the partner of the appellant/defendant had appeared before the learned trial court and was duly apprised of the proceedings. Even thereafter, the appellant/defendant had not taken any steps to pursue the suit, whence he was already proceeded ex-parte much prior in time, vide the Order dated 09.10.2019. Be that as it may, an ex-parte judgement and decree dated 21.09.2020 was passed by the learned Trial Court allowing the reliefs sought for in the suit of the respondent/plaintiff which is assailed in the present appeal.
19. At the outset we had indicated to the learned counsel for the appellant/defendant that since no written statement or any other pleading on behalf of it was filed before the learned Trial Court, we would permit the counsel to raise only pure questions of law.
20. The learned counsel for the appellant/defendant argues precisely the following issues: a. That the learned Trial Court had no territorial jurisdiction to try and adjudicate the suit and therefore the judgement and decree are a nullity in law and not enforceable. b. That no Statement of Truth, as envisaged under Order VI Rule 15 (4) & (5) of CPC as amended by the CC Act, was filed with the suit plaint, thus the said plaint was no plaint in the eyes of law and consequently, the impugned ex-parte judgement and decree could not have been validly passed.
21. That in respect of the first issue, learned counsel painstakingly took us through the pleadings and the documents filed therewith. According to the learned counsel, it is not disputed that the appellant/defendant is not situated within the territorial jurisdiction of the local limits of Delhi and is admittedly at Ghaziabad, Uttar Pradesh. That apart, according to the learned counsel, the respondent/plaintiff itself is located at Noida and not Delhi and thus could not have maintained the suit at Delhi.
22. We have given our thoughtful consideration to the said submission and find force in the same. This is for the reason that the documents placed before the learned Trial Court by the respondent/plaintiff, like the Certificate of Incorporation apparently establish that it was incorporated at Noida, Uttar Pradesh and not Delhi. A contrary submission to this was made by the learned Counsel for the respondent/plaintiff that the said certificate also referred to its office at Delhi. The same ought to be rejected for the reason that the address at Delhi is referred to as the address for correspondence. By no stretch of imagination can the address of correspondence confer jurisdiction upon a particular Court when the actual place of its incorporation is distinct.
23. That apart, we also considered the statement of account of the Bank of the respondent/plaintiff, relied upon by the learned counsel for the respondent/plaintiff to attempt to show that the money was transferred to its account at Delhi. However, on a closer scrutiny, it is clear that the said statement of account is of the Bank located at Noida too. Learned counsel for the respondent/plaintiff had insisted that the suit was filed on the basis of sub section (c) of section 20 of CPC on the premise that part cause of action had arisen within the local limits of the territorial jurisdiction of the Delhi Courts and not the location of the appellant/defendant.
24. That apart, learned counsel for the respondent/plaintiff also submitted that the claim in the suit was based on the job work issued by the respondent/plaintiff to the appellant/defendant and laid stress that the said order of job work was issued at Delhi. However, learned counsel was unable to show even a single document in the nature of order for job work on record. Even the pleadings on this aspect were vague, lacking in material particulars. The absence of any documentary evidence also does not lend credence to the version of the respondent/plaintiff regarding part cause of action having arisen in Delhi, resulting in our holding that the Delhi Courts had no territorial jurisdiction to adjudicate upon the lis.
25. Thus, the issue of part cause of action having arisen is wholly untenable for the reason that the learned counsel for the respondent/plaintiff was unable to show even one instance of any cause of action having arisen at Delhi at all.
26. That so far as the second issue regarding the non filing of the Statement of Truth alongwith the suit plaint is concerned, the learned counsel for the respondent/plaintiff unequivocally admitted that no Statement of Truth was at all filed along with the plaint. Having regard to this admission, this Court needs to examine whether the judgement and decree could at all have been passed, and if so, whether the judgement and decree is at all valid and not a nullity.
27. For appreciating this argument, we need to consider the provisions of both, Order VI Rule 15 (4) & (5) of CPC as amended by the CC Act, whereby filing of the Statement of Truth is mandatory. The said provisions are extracted hereunder: “Order 6 Rule 15-A. Verification of pleadings in a Commercial Dispute 15-A. Verification of pleadings in a Commercial Dispute. — (4) Where a pleading is not verified in the manner provided under subrule (1), the party shall not be permitted to rely on such pleading as evidence or any of the matters set out therein (5) The court may strike out a pleading which is not verified by a Statement of Truth, namely, the affidavit set out in the Appendix to this Schedule.”
28. A perusal of the aforesaid provisions, particularly Order VI Rule 15A of CPC as amended by CC Act, would bring to fore that the Legislature had, in its wisdom, intentionally laid great stress on the filing of the Statement of Truth along with the plaint, in support thereof, to reduce the time spent in the litigation by parties. The delay in filing of the same may be considered as a procedural irregularity, however, the filing of the same, in our view, would be mandatory. Moreover, the filing of the Statement of Truth and the limitation thereafter provided for filing of the same, in our view is restrictive in nature and cannot be extended endlessly nor can the plaint and the documents annexed thereto be read in evidence. This has great significance since sub rule (4) and (5) of Rule 15A of Order VI of CPC as amended by CC Act mandate the filing of the Statement of Truth and also prescribe the effect of such non filing. It is clear that the parties are not permitted to rely upon the said pleadings by virtue of sub rule (4) and simultaneously the Court is empowered to strike out a pleading which is not supported by the statement of truth, prescribed by sub rule (5) of Rule 15A of Order VI of CPC as amended by CC Act. Our endeavour in the present case is only to consider the effect of non filing of the Statement of Truth, since the facts obtaining in the present case do not give rise to any other question and thus, our views are restricted only to the said issue.
29. In the present case, it is admitted by the learned counsel for the respondent/plaintiff that the Statement of Truth indeed, was never filed either with the plaint or any time later at all. Keeping this fact in view, we are of the opinion that the same would fall within the purview of issue of law and hold that the plaint itself is non est and could not have been read in evidence either.
30. The arguments of the learned counsel for the respondent/plaintiff based on the Non Starter Report, issued by the DLSA South East, in respect of the suit in question, is concerned, the same does not discharge the respondent/plaintiff of the legal obligation to file the Statement of Truth. Moreover, the respondent/plaintiff cannot feign ignorance of the fact that the suit, even though originally proceeded with by the learned ADJ dealing with ordinary suits, was subsequently registered under the CC Act and numbered as such. Thus, the respondent/plaintiff was under a legal obligation to file the Statement of Truth in accordance with Order VI sub-rule (4) and (5) of Rule 15 A CPC as amended by the CC Act while conforming to the mandatory procedural formalities contained therein. Therefore, the respondent/plaintiff now cannot be permitted to contend that no such directions were issued for filing the Statement of truth after the transfer of suit from ordinary court to designated commercial court. Thus even this argument of the respondent/plaintiff fails.
31. Resultantly, we allow the appeal and set aside the judgement and decree dated 21.09.2020 passed by the District Judge (Commercial Court) - 01, South-East, Saket Courts, Delhi in CS (Comm.) No. 253/2019, however, with no orders as to costs.
32. Pending application also stands disposed of.
TUSHAR RAO GEDELA, J. YASHWANT VARMA, J.