M/S Salwan Enterprises vs Mr.Nitin Kohli on 5 October, 2016

In the Court of Ms. Kaveri Baweja:Addl. District Judge­03 (West)
                       Tis Hazari Courts: Delhi 
                                     
CS No. 485/14/10 (New No. 9333/16)

In the matter of:

M/s Salwan Enterprises
Through its partner
Mr.Anu Bhushan Salwan and 
Mrs. Arti Salwan
R/o 2/16, Kirti Nagar, WHS,
New Delhi­110015.
                                                                                        ....       Plaintiff
                   Versus

1.       Mr.Nitin Kohli
         S/o Mr.Bhoj Raj Kohli
         Partners of their erstwhile partnership
         Firm M/s Furncraft, having its registered
         office at 125, Shahpur Jat,
         New Delhi­110049
         And R/o D­33, Gulmohar Park,
         New Delhi­110049

2.       M/s MK Furncraft (Pvt.) Ltd.
         Through its Dirctors Mr.Nitin Kohli & 
         Ms.Seetu Kohli, having its registered office
         at 125, Shahpur Jat,
         New Delhi­110049

                                                                                        ....       Defendants



CS No. 485/14/10 (New No. 9333/16)                                               M/s Salwan Enterprises vs.Mr.Nitin Kohli
                                                                                                                (Page 1)
 Date of Institution of Suit                     :         17.09.2010
Judgment reserved on                            :         27.09.2016
Judgment pronounced on                          :         05.10.2016

                                                JUDGMENT

 1. Brief facts of the case are that admittedly the Plaintiff firm is carrying on their business as manufacturers, interior decorators, Government contractors, suppliers and traders having their head office and showroom at 2/16, Kirti Nagar, WHS, New Delhi, whereas the Defendants Sh.Nitin Kohli and Ms.Seetu Kohli have been carrying on their business as partners under the trade, name and style of M/s Furncraft having their registered office at 125, Shahpur Jat, New Delhi.

2. It is the case of the Plaintiff that during the course of business Defendants   Sh.Nitin   Kohli   and   Ms.Seetu   Kohli   have   purchased   various furniture items and other allied materials against their purchase orders placed through their erstwhile partnership firm M/s Furncraft from October, 2008 to June, 2009 from the Plaintiff firm and as per statement of account, a sum of Rs.11,35,701/­ is due and payable by the Defendants.

3. It is also stated that the cause of action arose in favour of the Plaintiff   and   against   the   Defendants   on   revealing   that   all   the   assets   and CS No. 485/14/10 (New No. 9333/16)                                               M/s Salwan Enterprises vs.Mr.Nitin Kohli (Page 2) liabilities of M/s Furncraft the Partnership Firm of Defendants Sh.Nitin Kohli &   Ms.Seetu   Kohli   has   been   taken   over   by   Defendants   Nos.2   M/s   MK Furncraft  Pvt. Ltd., whose Directors  are also    Sh.Nitin Kohli & Ms.Seetu Kohli. It is further averred in the plaint that inspite of issuance of demand notice dated 22.02.2010 as well as 21.05.2010, the Defendants failed to remit the   balance   amount   of   Rs.11,35,701/­,   which   is   due   and   legally   payable. Hence, by way of the present suit, the Plaintiff has sought a decree for the sum of Rs.11,35,701/­ together with pendente­lite interest @ 24% per annum w.e.f. 17.06.2009 till realization in its favour along with the cost of the suit.

4. The Defendant in its written statement claimed that the Plaintiff is not entitled for recovery of any of the amount claimed in the present suit and that the suit is without any cause of action and is liable to be rejected under  Order  VII  Rule  11  CPC.    It is  submitted  that  the  Plaintiff  has  not supplied the furniture worth Rs.11,35,701/­ as per the specifications and that the same were rejected and an intimation was given to the Plaintiff regarding the said rejected material.   It is further claimed by the Defendant that the Plaintiff is claiming the amount for the rejected material to which he is not entitled.

CS No. 485/14/10 (New No. 9333/16)                                               M/s Salwan Enterprises vs.Mr.Nitin Kohli (Page 3)

5. It   is   submitted   that   the   Defendants   have   placed   the   purchase order with the Plaintiff for crores of rupees and the Plaintiffs have supplied the   furniture   accordingly   and   that   it   is   only   the   payment   of   the   rejected material   supplied   by   the   Plaintiff   is   not   made   by   the   Defendant   as   the Plaintiff is liable to replace the rejected material with the material with the material of correct specification to the Defendant.

6. It is also claimed by the Defendants that the amount claimed by the Plaintiff pertains to the rejected material vide Bill No.6 dated 31.03.2009 for   a   sum   of   Rs.50,400/­,   Bill   No.8   dated   28.04.2009   for   a   sum   of Rs.3,21,750/­, Bill No.10 dated 17.06.2009  for the amount of Rs.1,75,795/­ and Bill No.11 dated 17.06.2009 for a sum of Rs.5,87,756/­, thus totalling to Rs.11,35,701/­.  It is submitted that the Plaintiff was duly informed and the Plaintiff acknowledged the same through his initials regarding the intimation of the rejected material of the above said amount.

7. The Defendant also denied having received any notice from the Plaintiff with respect to the alleged amount of Rs.11,35,701/­ and claimed that the suit is without the cause of action and is liable to be dismissed.

8. The  Plaintiff  in  its  replication  re­affirmed   the  contents   of  the CS No. 485/14/10 (New No. 9333/16)                                               M/s Salwan Enterprises vs.Mr.Nitin Kohli (Page 4) Plaintiff   and   emphatically   denied   having   claim   the   amount   of   rejected material vide bills Nos.6,8,10 & 11 and asserted that the goods supplied vide these bills were in conformity of purchase orders placed by the Defendant and that the Plaintiff is entitled to claim recovery of the amount of his bills claimed   in   the   suit.     The   Plaintiff   also   reiterated   that   the   amount   of Rs.11,35,701/­ as claimed, does not pertain to the rejected material as alleged by Defendant.  It is further denied that the Plaintiff was ever informed or the Plaintiff ever acknowledged the rejected material of the aforesaid amount and that the letters dated 07.04.2009, 11.05.2009, 24.06.2009 & 29.06.2009 were never delivered or received by the Plaintiff.

9. On   the   basis   of   pleadings   of   parties,   following   issues   were framed vide order dated 14.09.2011:­

(i) Whether the goods supplied by the Plaintiff firm to the Defendant   Company   were   defective   and   not   as   per specification as per purchase order? OPD

(ii) Whether the intimation about the goods being defective had been given by the Defendant Company to the Plaintiff Firm? OPD

(iii)   Whether   the   Plaintiff   Firm   is   entitled   to   amount   as claimed? OPP

(iv) Whether the Plaintiff is entitled to any interest, if so, at CS No. 485/14/10 (New No. 9333/16)                                               M/s Salwan Enterprises vs.Mr.Nitin Kohli (Page 5) what rate? OPP

(v) Relief.

10. Plaintiff   examined   Sh.Anu   Bhushan   Salwan   as   PW­1,   who tendered in evidence his affidavit which is Ex.PW­1/A.  PW­1 deposed that the  Plaintiff  firm  is  carrying  on   their  business   as  manufacturers,  interior decorators,   Government   contractors,   suppliers   and   traders   having   their office  and  showroom  at  2/16,   Kirti   Nagar,   WHS  New  Delhi.   He  further deposed that the Defendants Sh.Nitin Kohli and Ms.Seetu Kohli have been carrying on their business as partners under the trade name and style of M/s Furncraft having their registered office at 125, Shahpur Jat, New Delhi and that during the course of business Defendants Sh.Nitin Kohli and Ms.Seetu Kohli   have   purchaed   various   furniture   items   and   other   allied   materials against their purchase orders placed through their erstwhile partnership firm M/s Furncraft.

11. PW­1 further deposed that as per statement of account, a sum of Rs.11,35,701/­  is  due  and  legally  payable  by  the  Defendants  which  they have failed  to  pay. He also  placed the copy  of the  statement  of  account which has been exhibited as Ex.PW­1/2 (later on de­exhibited and marked CS No. 485/14/10 (New No. 9333/16)                                               M/s Salwan Enterprises vs.Mr.Nitin Kohli (Page 6) as   Mark   A2).   PW­1   also   deposed   that   inspite   of   demand   notices   dated 22.02.2010 and 21.05.2010, the Defendants No.1 & 2 have failed to pay the balance sum of Rs.11,35,701/­.

12. Plaintiff also examined PW­2 Sh.Inder Pal  Singh, Record Keeper from the office of Registrar of Firm, Govt. of Delhi.  This witness brought the summoned record i.e. complete file relating to M/s Salwan Enterprises including   its   registration,   duly   certified   forms   A   &   B   showing   the registration   of   M/s   Salwan   Enterprises   on   11.09.2008,   which   is   duly certified by Mr.Sandhu, Registrar of Firms under his signatures at point X and his official stamp at point Y and proved the same as Ex.PX2 (Colly).

13. On the other hand, Defendant examined DW­1 Sh.D.R.Bajwa who tender in evidence his affidavit as Ex.D­1.

14. I have carefully gone through the record of the case in its entirety and   given   my   thoughtful   consideration   to   the   arguments   advanced   by learned counsel for the parties in the light of the case law cited in the course of arguments.

15. In   the   light   of   the   aforesaid,   my   issue­wise   findings   are   as follows:­ CS No. 485/14/10 (New No. 9333/16)                                               M/s Salwan Enterprises vs.Mr.Nitin Kohli (Page 7) Issue Nos. 1 & 2

1.  Whether   the   goods   supplied   by   the   Plaintiff   firm   to   the   Defendant Company   were   defective   and   not   as   per   specification   as   per   purchase order? OPD

2.  Whether the intimation about the goods being defective had been given by the Defendant Company to the Plaintiff Firm? OPD

16. The onus of proving the aforesaid issues was upon the Defendant. The Defendant, as aforesaid, had examined one Sh.D.R.Bajwa, their Special Power   of   Attorney,   who   deposed   by   way   of   his   affidavit   Ex.D­1.     He exhibited the Special Power of Attorney which is executed in his favour as Ex.DW­1/A. He also deposed that the Plaintiff had not manufactured the furniture  ordered  as  per  the  specification  given  with  the  purchase  orders which are Ex.PW­1/D1 to Ex.PW­1/D4.  He also deposed that the furniture items sent by the Plaintiff vide Bill No.006 dated 31.03.2009 were rejected vide letter dated 07.04.2009; the furniture items sent vide Bill No.008 dated 28.04.2009 were rejected vide letter dated 11.05.2009; the furniture items sent   vide   Bill   No.010   dated   17.06.2009   were   rejected   vide   letter   dated 24.06.2009   whereas   the   furniture   items   sent   vide   Bill   No.011   dated 17.06.2009 were rejected vide letter dated 29.06.2009.  He further deposed CS No. 485/14/10 (New No. 9333/16)                                               M/s Salwan Enterprises vs.Mr.Nitin Kohli (Page 8) that the said letters were duly received by Sh.Anu Bhushan Salwan, partner of Plaintiff firm.  The said rejection letters were initially marked as PW1/D1 (Colly.).     However,   during   the   cross­examination   of   PW­1   recorded   on 10.07.2012, the said letters have been directed to be read as Mark PW­1/DA to PW­1/DD, as per court observation during the cross­examination of DW­ 1 dated 03.12.2014 in order to avoid confusion.

17. DW­1   also   deposed   that   the   notices   dated   22.02.2010   and 21.05.2010 were never served upon the Defendants and that the Plaintiff is not entitled to the suit amount since the claim of the Plaintiff is based on rejected goods.

18. It was submitted by learned counsel for the Defendants that the Plaintiff is not entitled to recover the suit amount since the claim is based on goods which stood rejected vide letters mark DW1/D1 (Colly.).

19. On   the   other   hand,   learned   counsel   for   the   Plaintiff   drew   my attention towards the cross­examination of DW­1, wherein he deposed that along with purchase order, they had given designs, material specification and the measurement specification to the Plaintiff.  Learned counsel for the Plaintiff argued that DW­1 also deposed in the same breath that he has not CS No. 485/14/10 (New No. 9333/16)                                               M/s Salwan Enterprises vs.Mr.Nitin Kohli (Page 9) placed on record the said specifications.  He further deposed that he does not have any knowledge about the purchase orders Ex.PW­1/D1 to Ex.PW­1/D4 and   the   same   were   placed   by   the   proprietors   in   consultation   with   the designer and the Accounts Department.   Learned counsel for the Plaintiff contended   that   the   Defendants   have   not   examined   either   the   concerned accountant or the designer who had placed purchase orders in consultation with   the   proprietors,   as   deposed   by   the   DW­1.   Learned   counsel   for   the Plaintiff   also   pointed   out   that   despite   the   fact   that   the   purchase   orders Ex.PW­1/D1 to Ex.PW­1/D4 bear the signatures of the designer Ms.Preeti, as   deposed   by   DW­1   in   his   cross­examination,   the   said   designer   of   the Defendants has not been brought into the witness box.

20. More importantly, DW­1 admitted in his cross­examination that “It is correct that on  Ex.PW­1/D1 to Ex.PW­1/D4, the specification of the measurement of the goods to be manufactured is not mentioned.”  Although DW­1 further deposed that the Defendant used to give the sample of the wood,  cloth,  mica  etc. required  for  manufacturing  of  goods,  however  no evidence whatsoever has been brought on record to establish this contention.

21. It is also pertinent to mention that though the Defendants claimed CS No. 485/14/10 (New No. 9333/16)                                               M/s Salwan Enterprises vs.Mr.Nitin Kohli (Page 10) that the Plaintiff were intimated about the goods being defective vide letters Mark PW­1/DA to PW­1/DD, however, the said fact has not been proved on record by the Defendants. As deposed by DW­1 himself, the signatures of the person who signed the said letters at point ‘A’ namely Sh.Rajiv Bhalla was not produced into the witness box by the Defendants.

22. Further, as per DW­1, the said letters were delivered to Sh.Anu Bhushan by one field boy, namely Sh.Ramesh who was still stated to be in the employment of the Defendant Company.   It is also deposed by DW­1 that Sh.Ramesh told him that Sh.Anu Bhushan after signing the letters kept the original with himself and gave him the photocopies.   Despite this the Defendants have not bothered to examine Sh.Ramesh, the said office boy who   alleged   delivered   the   letters     Mark   PW­1/DA   to   PW­1/DD   to   the Plaintiff.  Thus, in these circumstances, the Defendants have failed not only to  prove  the  said   letters  as   per  law,   but   also   the  delivery  thereof   to   the Plaintiff.

23. It   is   also   pertinent   to   note   that   PW­1   Sh.Anu   Bhushan categorically   denied   in   his   cross­examination   that   any   specifications   or drawing had been supplied to the Plaintiff along with purchase orders by the CS No. 485/14/10 (New No. 9333/16)                                               M/s Salwan Enterprises vs.Mr.Nitin Kohli (Page 11) Defendants.  He also denied having received letters Mark PW­1/DA to PW­ 1/DD.

24. In the light of the above evidence on record, it is apparent that the Defendants have failed to prove that the goods supplied by the Plaintiff firm were either defective or not as per specifications.   Rather, the Defendants have   even   failed   to   establish   that   any   specification   were   given   to   the Plaintiff   to   manufacture   the   good   in   question   according   to   such specification.

25. Moreover, no evidence whatsoever has been led on record by the Defendants   to   also   establish   that   the   intimation   about   the   goods   being defective was given to the Plaintiff by the Defendant Company at any point of time.

26. As   discussed   hereinabove,   neither   the   execution   of   the   letters Mark PW­1/DA to PW­1/DD has been proved as per law by examining the author  of the letters Sh.Rajiv Bhalla nor  the alleged delivery  of the said letters   has   been   proved   by   the   Defendants   which   could   have   been established   by   examining   the   office   boy   Sh.Ramesh,   who   allegedly delivered the letters to the Plaintiff, as per the case of the Defendants.  CS No. 485/14/10 (New No. 9333/16)                                               M/s Salwan Enterprises vs.Mr.Nitin Kohli (Page 12)

27. Accordingly,   in   the   light   of   the   aforesaid   discussion   and   the evidence on record, I am of the opinion that the Defendant has failed to discharge the onus of proving these issues which are accordingly decided in favour of the Plaintiff and against the Defendants.  Issues No.3 & 4

3. Whether the Plaintiff Firm is entitled to amount as claimed? OPP

4. Whether the Plaintiff is entitled to any interest, if so, at what rate? OPP

28. In the light of the findings on the aforesaid issues, the Plaintiff is entitled to recover Rs.11,35,701/­ from the Defendants.  Further, in the light of   the   facts   and   circumstances   of   the   case   and   considering   the   nature   of transaction between the parties, I deem it appropriate to direct the Defendants to pay an interest @ 9% per annum w.e.f. 17.06.2009 along with pendente lite   interest   @   9%   per   annum   till   realization.   Costs   of   the   suit   are   also awarded in favour of the Plaintiff an against the Defendants. Decree sheet be prepared accordingly. File be consigned to record room.  Announced in open court today on 05.10.2016 (Kaveri Baweja) ADJ­03(West), THC, Delhi  CS No. 485/14/10 (New No. 9333/16)                                               M/s Salwan Enterprises vs.Mr.Nitin Kohli (Page 13) New No. 9333/16 M/s Salwan Enterprises vs. Mr.Nitin Kohli & Anr.

05.10.2016

Present:           None. 

Vide separate orders of even date, the suit of the Plaintiff stands decreed  for a sum  of  Rs.11,35,701/­.   Defendants  are directed  to pay  an interest @ 9% per annum w.e.f. 17.06.2009 along with pendente lite interest @ 9% per annum till realization. Costs of the suit are also awarded in favour of   the   Plaintiff   an   against   the   Defendants.   Decree   sheet   be   prepared accordingly. File be consigned to record room.

File be consigned to Record Room.

(Kaveri Baweja) ADJ­03(West), THC, Delhi                                                                             05.10.2016 CS No. 485/14/10 (New No. 9333/16)                                               M/s Salwan Enterprises vs.Mr.Nitin Kohli (Page 14)

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