Full Text
HIGH COURT OF DELHI
JUDGMENT
8074/2022, CM APPL. 8075/2022, CM APPL. 45780/2022
M/S RAKMAN INDUSTRIES LIMITED ..... Appellant
Advocates who appeared in this case:
For the Appellant : Mr. V. N. Sharma, Adv. For the Respondent : Mr. Nitish Kumar Singh, Mr. Abhishek Raj, Mr. Amit Kumar Thakur and Mr. Alok Ranjan Singh, Advs.
HON’BLE MR. JUSTICE AMIT MAHAJAN
1. The present appeal is filed challenging the judgment and decree dated 30.01.2021 (hereafter ‘impugned judgment and decree’) passed by learned Commercial Court, Shahdara in Civil Suit (Comm) NO. 206/2019 titled as M/s Sumaja Electro Infra Private Limited v/s M/s Rakman Industries Limited.
2. The learned Commercial Court, by way of impugned judgment and decree dated 30.01.2021 decreed the suit in favour of plaintiff (respondent herein) for an amount of ₹22,46,172/- along with pendentelite and future interest at the rate of 18% per annum from the date of filing of the case till the realisation of the amount along with costs of ₹55,000/- and ₹26,306/-.
3. The suit was filed by the plaintiff claiming that a sum of ₹98,87,013.71/- was paid to the defendant as advance between the period 01.05.2014 to 16.12.2015 for supply of electric conductors. The defendant, however, supplied goods for a value of ₹76,40,841/- and illegally withheld the sum of ₹22,46,171/-; it had neither supplied goods against the said amount nor refunded the same.
4. In the suit, defendant was proceeded ex parte on 11.02.2020. The ex parte evidence was, thereafter, led by the plaintiff and the plaintiff tendered the affidavit by way of evidence of one Mr. Raghav Agrawal.
5. The learned Commercial Court accepted the statements affirmed in the affidavit for the reason that the same remain uncontroverted and held as under:
6. The present appeal has been filed on a limited ground that the claim filed by the plaintiff was barred by limitation.
7. It is contended by the learned counsel for the appellant / defendant that even assuming the facts as stated in the plaint to be correct, the claim would still be barred by limitation and the learned Commercial Court erred in passing a decree in such time-barred claim.
8. It is further contended that the facts, which remained uncontroverted, do not indicate that the suit was filed within the period of limitation.
9. It is further argued that admittedly the orders were placed for supply of electric conductors up to December, 2015 and even as per the plaint, the legal notice was issued for the first time on 01.07.2019. It is, thus, contended that the cause of action, if at all arose in December, 2015 and therefore, any suit for recovery of money could have been filed within a period of three years from December, 2015.
10. The learned counsel appearing for the respondent, on the other hand, argued that the cause of action to file a suit, in the present case, does not start from the date of last payment.
11. It is contended that the defendant in an Email communication dated 06.11.2017 has admitted the liability towards the plaintiff and therefore, the period of limitation was required to be reckoned from the said date and not from the last date of payment.
12. The email communication dated 06.11.2017 was admittedly not filed along with the plaint and the respondent has filed an application under Order 41 Rule 27 for placing on record the said Email dated 06.11.2017 and handing over memo dated 22.09.2019 of 33/11kv Substation at Dhanghata Sant Kabir District Uttar Pradesh. The application is filed for treating these documents as additional evidence. It is stated that since a number of communications were exchanged between the parties over a period of time, the present communication could not be traced at the time of filing of the suit even after exercise of due diligence.
REASONING
13. In the plaint, it was specifically pleaded that the plaintiff had paid a sum of ₹98,87,013.71/- for supply of electric conductors between the period 01.05.2014 to 16.12.2015. It was averred as under:
6. That since 01.05.2014 to 16.12.2015 plaintiff has paid defendant Rs.98,87,013.71/-for supply of electric conductors. But defendant have supplied goods of rupees Rs.76,40,841/-only till date. Meaning thereby defendant is illegally holding the goods of Rs.22,46,171/-.That it is pertinent to mention that defendant had always received the payment in advance. In this way defendant has received Rs:22,46,172/-(Twenty two lakh, forty six thousand one hundred seventy two rupees only) in advance and the goods i.e ACSR conductor were not supplied by them. The proof the payment along by way of bank statement and detail of ledger account are Annexed herewith Annexure- P5(colly) and Annexure- P[6].
7. Plaintiff requested defendant to supply the goods on time but they failed to supply it on time. Ultimately my defendant had to purchase the goods at higher rate from market and project of plaintiff got delayed due defendant unprofessional conduct.
8. That thereafter the Plaintiff sent a legal demand notices dated
10.07. 20 19 through his counsel at the above said given address of the Defendant by way of speed post. In the said notice, the Plaintiff has requested the Defendant to make the payment of above said advance payment made by them within a period of 07(seven) days from the receipt of the legal notice. The said notices were duly served to the defendant. That on receipt of legal notice defendant kept quiet and even do not bother to reply the same or refund the advance money given to them. The copy of legal notice, speed post receipts and tracking report are Annexed herewith as Annexure-P[7] (Colly.), Annexure-P[8] and Annexure-P[9] respectively.
9. That however on 05.08.2019 defendant company representative called plaintiff through his mobile and admitted the claim of the plaintiff and assure them to repay the amount. But lapse of more than a month defendant failed to make recoverable amount, plaintiff requested the defendant telephonically to repay the advance money given to them for supply of ACSR conductor the representative of the defendant company not only flatly refused to pay the same but also threatened the plaintiff for dire consequences.
14. In paragraph 15 of the plaint, in relation to cause of action, it averred as under:
15. That the cause of action for filing the present suit arose in favour of the plaintiff when the defendant admitted the claimed amount on number of occasions and. It further arose when the when defendant fail to supply the goods on the time. further arose on various dates when the Plaintiff requested the Defendant to repay his entire amount of Rs.22,46,172/- (Twenty two lakh, forty six thousand one hundred seventy rupees only) but to no avail. It further arose when the Plaintiff sent a legal notice to the Defendant to repay the amount of the amount. It further arose when defendant called the plaintiff in July 2019 and admitted the pending amount. It further arose when plaintiff called the defendant for pending the amount on august 2019 and defendant flatly refuse the refund and threatened the dire consequences. The cause of action is still continuing and subsisting one as the defendant did not pay the recoverable amount till date.
15. Therefore, the plaintiff for the purpose of cause of action and limitation, pleaded that it arose, firstly, when the defendant failed to supply the goods on time. It is pleaded that it further arose on various dates when the plaintiff requested the defendant to repay the entire amount and further arose when plaintiff sent a legal notice for repayment of the amount. It is claimed that it further arose when defendant called the plaintiff in July, 2019 and admitted the pending amount and in August, 2019 when defendant flatly refused to refund and threatened the dire consequences.
16. In terms of the order placed by the plaintiff on the defendant, dated 23.04.2014, marked as “Mark P1/2” it was mentioned in Clause 2.[6] that the material was to be delivered within four weeks of manufacturing clearances. The plaintiff in the entire plaint has not pleaded as to the specific dates or months of a year when goods were required to be delivered. The limitation in respect of suits for recovery of balance amount paid in advance for goods to be delivered is governed by Article 13 of the Limitation Act, 1963. In terms of the said Article, the period of limitation is three years from the date when the goods ought to have been delivered. In the absence of any pleadings, it can thus be presumed that in terms of the order placed by the plaintiff, the goods were to be delivered within four weeks of manufacturing clearance. It is significant to note that the plaintiff in the entire plaint has not pleaded anything about the date when the goods were required to be delivered, so as to calculate the period of limitation but only mentions that the defendant failed to supply it on time and the plaintiff had to purchase the same from market at a higher rate. Again, no date or period has been mentioned about such purchase at a higher price from market has been mentioned in the plaint.
17. It is settled law that mere demand for the repayment of does not extend the period of limitation. It is also equally well settled that merely sending a legal notice to repay the amount does not assist the plaintiff for the purpose of calculation of the period of limitation. Even if it is to be presumed that a statement made in the plaint is correct as a matter of evidence, the same would still be beyond the period of limitation. The plaintiff pleaded that he had communicated with the defendant in July, 2019, and the defendant had admitted the pending amount. The said month of July, 2019, is after five years of placing the order for supply which is, 23.04.2014. The last invoice placed by the plaintiff on record is dated 18.11.2015. Thus, even if we take the averment that the defendant had called the plaintiff in July, 2019, and had admitted its liability to pay the pending amount, the same would not extend the period of limitation for claiming the outstanding amount as the said acknowledgement, if any, is beyond the period of three years from the cause of action which, in the present case, would be the date when the goods ought to have been delivered. The plaintiff has also pleaded that cause of action also arose on various dates when the plaintiff requested the defendant to repay the entire amount. The said averment, however, will not extend the period of limitation since making a demand does not extend the period of limitation, which commence on a date in terms of the provisions of Limitation Act. Further, it is not the case of the plaintiff that the goods were to be supplied over the period of next few years and, therefore, the cause of action would start after the expiry of the said period.
18. Thus, apart from contending that some correspondences were exchanged between the parties in relation to refund of money, nothing else has been pleaded. It is settled law that the correspondence exchanged between the parties cannot extend the limitation period for institution of a suit. Once the right to sue had accrued, the limitation to file cannot be extended by sending reminders or other communications. If the said proposition is accepted, then the limitation to file a suit will never end and will be extended by sending repeated demand notices. The law requires a litigant to be vigilant of its rights and avail remedies before expiry of the stipulated period of limitation within the four corners of Civil Procedure Code and other applicable laws. CM APPL. 45780/2022 (under Order XLI, Rule 27, Code of Civil Procedure (CPC), 1908 -for production of additional evidence)
19. Order 41 Rule 27 permits a party to produce additional evidence in Appellate Court in case he is able to establish that notwithstanding the exercise of due diligence, such evidence was not within his knowledge or could not, after the exercise of due diligence, be produced by him at the time when the impugned judgment and decree appealed against was passed.
20. The plaintiff, in the supporting application, has only reproduced the language of Rule 27 which in our opinion does not establish why such evidence was not filed along with the suit.
21. The plaintiff contends, on the strength of the emails exchanged on 06.11.2017, that the defendant has accepted that the payments were to be made to the plaintiff and, therefore, the period of limitation would start running from the said date. This contention is erroneous.
22. We have also perused Emails which are now sought to be produced in support of the contention that the cause of action arose on 06.11.2017. For the ease of reference, the Emails are reproduced as under:
1. 06.11.2017 12:46 PM Sumaja Electroinfra Rakman Sub.: Pending payment Dear Sir, As discussed many times regarding our pending payment Rs 10 Lac approx.. against conductor supply. Pls return the above amount by RTGS/DD at the earliest. Regards, Sumaja Electroinfra Pvt. Ltd.
2. 06.11.2017 03:52 PM Rakman Sumaja Dear Sir, In reference to your mail, we shall bring to your kind attention that the PO was placed by you for the supply of material and the material was not lifted in time by you despite our repeated reminders and requests. Further, we had also informed you to lift the balance material after paying the differential increase in prices of material till date, as considerable time has passed since the placement of PO. Awaiting your reply. Thanks and Regards, Rakman Industries Limited
3. 06.11.2017 06:07 PM Sumaja Rakman Dear Sir, Pls provide materials as per on going order already given advance to you. If you feel any problem to provide materials so please return our balance amount. Regards,
4. 06.11.2017 06:07 PM Sumaja Rakman Sub.: Re: Pending Payment 4 attachments: [SUMAJA REPLY NOVEMBER 2016.pdf] [CCMAI CIRCULARS.pdf] [PRICE VARIATION OF ACSR DOG. pdf] [Rakman.pdf]
5. 07.11.2017 01:22 PM Dear Sir, With reference to your mail, it is brought to your kind notice that you had placed the order in September, 2015 and as per Clause 2.[6] of your Purchase Order (copy enclosed), the complete material was to be lifted by you with in 06 weeks and we had always insisted on delivery of material but it was your goodself who failed to lift the material from time to time, which is also evident in the previous orders placed on us and subsequent deliveries. We had requested you to lift material from us numerous times but of no avail whereas we have come to know that you had lifted the material from other suppliers in the mean time and not from us despite our reminders and requests, for reasons best known to you only. We are enclosing copy of mail of mail of November 2016 in which we had already informed you that since you have failed to lift the material with in the delivery period, we cannot bear the price increase in the basic cost of raw materials. As you have mentioned that you want to lift the balance material. We hereby encloses the copy of worksheet for the prices applicable as on today along with the copy of CCMAI circulars applicable for the price variation applicable. You are requested to kindly take note of the same and do the needful accordingly at the earliest possible.
6. 07.11.2017 02:23 PM Sumaja We have given order on fixed price. No any variation in price. Pls resolve this matter. Regards,
7. 07.11.2017 02:44 PM Dear Sir, Kindly note that the prices were fixed till the expiry of delivery period mentioned in the PO i.e. for 6 weeks only and not for more than TWO YEARS. Further, it is brought to your kind attention that in the previous order you had reduced the prices substantially, at the time of delivery, even though the prices were fixed till the expiry of contract, on account of reduction in prices of raw material citing that we won’t be able to pay the contract value as we are getting the material at lower prices. Its very strange that when there is reduction in the prices of raw material, then you shall pay the current prices but when the prices have increased then you will opt for the PO prices, even after the time lapse of TWO years. Kindly take note and do the needful.
8. 15.12.2017 01:06 PM Sumaja Pls provide the following documents for IT case. Details are given below:-
1. Bank Statement year- 2014-2015
2. Confirmation of a/c
3. ITR copy 2014-2015 & 2013-
4. Payment received details for 2014-2015 Kindly confirm, Thanks & Regards
9. 26.12.2017 07:29 PM Rakman Raghav Agrawal (Sumaja Electroinfra) Dear Sir, As discussed, PFA