Full Judgment Text
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ RFA Nos.1007/2017 & 1014/2017
st
Reserved on: 1 December, 2017
th
% Pronounced on: 6 December, 2017
1. RFA No.1007/2017
M/S. KCL LTD. ..... Appellant
Through: Mr. Arjun Garg, Advocate with
Mr. Munish Yadav, Advocate
and Mr. Mohit Chandra,
Advocate.
Versus
THOMSON PRESS INDIA LTD. ..... Respondent
2. RFA No.1014/2017
M/S. KCL LTD. ..... Appellant
Through: Mr. Arjun Garg, Advocate with
Mr. Munish Yadav, Advocate
and Mr. Mohit Chandra,
Advocate.
Versus
THOMSON PRESS INDIA LTD. ..... Respondent
CORAM:
HON’BLE MR. JUSTICE VALMIKI J.MEHTA
To be referred to the Reporter or not?
VALMIKI J. MEHTA, J (ORAL)
RFA No.1007/2017 and C.M.Nos.43567/2017 & 43568/2017
(exemption)
1. This Regular First Appeal under Section 96 of the Code
of Civil Procedure, 1908 (CPC) is filed by the defendant in the suit
RFA Nos.1007/2017 & 1014/2017 Page 1 of 16
impugning the judgment of the Trial Court dated 31.7.2017; by which
the trial court has decreed the suit for recovery filed by the
respondent/plaintiff for an amount of Rs.19,81,927/- along with
interest at 12% per annum simple. The counter-claim filed by the
appellant/defendant was dismissed and which is the subject matter of
challenge in the connected appeal being RFA No.1014/2017.
2. Respondent/plaintiff filed the subject suit seeking
recovery of Rs.19,81,927/- being the amount of balance due for
printing work which was done by the respondent/plaintiff for the
appellant/defendant. Total amount value of the invoices raised was
Rs.57,34,605/-. An amount of Rs.39,48,233/- was paid and therefore
the principal balance amount remaining due came to Rs.17,85,842/-.
3. The appellant/defendant contested the suit and pleaded
that the respondent/plaintiff was guilty of defective work and therefore
the respondent/plaintiff was not entitled to the suit amount. It was
pleaded by the appellant/defendant that on account of the defective
printing the appellant/defendant suffered huge loss and therefore the
appellant/defendant was entitled to a sum of Rs.18,14,677/- and for
which amount a counter-claim was filed against the
RFA Nos.1007/2017 & 1014/2017 Page 2 of 16
respondent/plaintiff by the appellant/defendant, and against dismissal
of which the connected RFA No. 1014/2017 is filed.
4. After pleadings were complete, the trial court framed the
following issues:-
“ ISSUES :
1.Whether the plaint has been signed, verified and instituted by duly
authorized and competent person? OPP
2. Whether the terms and conditions in letter dated 31.01.01 form part of
the agreement or not? OPD
3. Whether preparation of the ready positives was part of the contract
between the plaintiff and the defendant? onus on the parties
4. Whether the plaintiff is entitled to a decree for a sum of Rs.19,81,927/-
against the defendant? OPP
5. Whether the plaintiff is entitled to any interest, if yes, at what rate and
for which period? OPP
6. Whether the defendant is entitled to its counterclaim against
the plaintiff as prayed for? OPD
7. Relief
ISSUE NO. 8 .
Whether the material supplied by the defendant had not been rejected for
bad quality by their client M/s. Moser Baer India Ltd. But on account of
change and design of inlay cards and folders and defendant was
compensated for the same? OPP”
5. The main issues to be decided and which were argued
before this Court were issue nos.4 and 8. These issues pertain to the
entitlement of the respondent/plaintiff to the suit amount or as to
whether the respondent/plaintiff is not entitled to the suit amount but
the respondent/plaintiff was guilty of defective work and also that on
RFA Nos.1007/2017 & 1014/2017 Page 3 of 16
account of defective work the printed material was rejected by the
client of the appellant/defendant, namely M/s Moser Baer India Ltd.
6. Trial court in the impugned judgment has noted that the
contract between the parties stood concluded in terms of the
communication dated 31.1.2001/Ex.PW1/4 sent by the
respondent/plaintiff to the appellant/defendant and terms of which
letter were accepted by the appellant/defendant in terms of its response
dated 2.2.2001/Ex.PW1/5. In the present case really the onus of proof
was upon the appellant/defendant as to whether the suit was to be
dismissed on account of defective printing work being done by the
respondent/plaintiff and some of the defective printing work being that
which was allegedly rejected by M/s Moser Baer India Ltd. On this
main issue as to whether the work done was defective, the trial court
has held that the appellant/defendant failed to prove that the work was
defective. For reaching this conclusion trial court notes that till the
respondent/plaintiff wrote its letter dated 29.1.2002/Ex.PW1/8 no
complaints were ever made by the appellant/defendant with respect to
any defective work. No such letter or communication was placed on
record and proved by the appellant/defendant written before 29.1.2002
RFA Nos.1007/2017 & 1014/2017 Page 4 of 16
with respect to the defective printing work against the contract and
which printing work commenced in February, 2001 i.e for around 11
months there was never ever a complaint in writing by the
appellant/defendant to the respondent/plaintiff of any defective work.
It was for the first time only on 29.1.2002, that the appellant/defendant
claimed that there were defects in the printing work.
Respondent/plaintiff immediately in response wrote its letter dated
30.1.2002/Ex.PW1/10 that there was no defective work. I may note
that the respondent/plaintiff has proved the different invoices which
were collectively exhibited as Ex.PW1/16 and Ex.PW1/17 and the
delivery challans as Ex.PW1/18 and Ex.PW1/19. Even in the
communication dated 29.1.2002/Ex.PW1/8 the appellant/defendant
only generally and vaguely stated that there is a quality issue on 30
lacs inlay sets and reconciliation of paper and that because of this
reason payment was stopped to the respondent/plaintiff. This letter
however did not specify as to what was the quality issue/defect in the
printing. Trial court has noted that as per the agreed terms contained
in the letters Ex.PW1/4 and Ex.PW1/5 of the parties, the
appellant/defendant was duty bound within four days with the receipt
RFA Nos.1007/2017 & 1014/2017 Page 5 of 16
of the material to point out defects and where after no subsequent
complaint would be considered. This term was on the overleaf of the
letter Ex.PW1/4 dated 31.1.2001.
7. Though learned counsel for the appellant/defendant
contended that the term on the over leaf of Ex.PW1/4 cannot be
looked into because there was no such term, however before this Court
for some unexplained reason the appellant/defendant has only filed a
typed copy of front portion of Ex.PW1/4 dated 31.1.2001.
Appellant/defendant has failed to file the front and back portion of
Ex.PW1/4 and therefore there is no reason for this Court to disbelieve
the findings of the trial court that on the overleaf of Ex.PW1/4 it is
clearly specified that there was a period of four days within which the
appellant/defendant was entitled to raise in the complaint for any
alleged defective work. This finding of the trial court of four days
term existing in Ex.PW1/4 is referred to in para 40 of the impugned
judgment at internal page 29 of the judgment.
8. In my opinion even if this clause of four days for raising
a grievance was not there, yet, the appellant/defendant was bound by
virtue of Section 42 of the Sales of Goods Act, 1930. As per this
RFA Nos.1007/2017 & 1014/2017 Page 6 of 16
provision once no objection is raised within a reasonable period of
time with respect to alleged defects in the goods, then, the buyer
cannot thereafter object to any defect in the goods. Trial court has in
this regard referred to this provision of the Sales of Goods Act in para
55 of the impugned judgment and this para 55 reads as under:-
“55. In case of sales of goods, as per provisions of Sales of Goods Act
1930, under the provisions of section 41 and 42, it is the responsibility of
buyer to examine the goods before accepting the delivery. Section 41
clearly mandates that where goods have been delivered to buyer which
have not been previously examined, buyer will not deem to have accepted
the same unless he has reasonable opportunity of examining the goods to
ascertain whether goods are in conformity with contract. However,
Section 42 mandates that buyer will deem to have accepted the goods
when he either actually intimates to the seller regarding acceptance of
goods or where he does any act in relation to those goods which is
in consistent to the ownership of seller or when after lapse of a
reasonable time buyers retains the goods without intimation of rejection of
the same. In the present case also, when there were already
expressed conditions of sale for inspection of the goods, still there being
no communication from defendant for period of about two months
since the lastly accepting of goods of printed inlay cards and
folders to the effect that there is any defect in the printing work, in view of
the conditions of sale and the provisions of section 42 as
discussed above, defendant company will deem to have accepted the
material without there being any defects.”
9. A reading of the aforesaid discussion as also the relevant
paras of the impugned judgment of the trial court show that the trial
court was justified in arriving at a finding that no objection was raised
with respect to invoices upto 31.10.2001. Once never any objection
was raised with respect to defective work thus this lack of challenge to
RFA Nos.1007/2017 & 1014/2017 Page 7 of 16
defective work became final as against the appellant/defendant by
virtue of Section 42 of the Sales of Goods Act.
10.(i) Learned counsel for the appellant/defendant argued that
respondent/plaintiff by virtue of letter Ex.PW1/11 dated 16.4.2002
accepted that there was defective work of invoice nos.8477 and 8478,
both dated 31.10.2001 for Rs.2.49 lacs and Rs.2.53 lacs respectively,
and hence it is argued that respondent/plaintiff was liable with respect
to the defective work in the invoices dated 31.10.2001.
(ii) In my opinion this argument urged on behalf of the
appellant/defendant by placing reliance upon letter dated 16.4.2002 of
the respondent/plaintiff qua two invoices dated 31.10.2001 is a
misconceived argument. In this regard the trial court has arrived at a
finding of fact that these invoices pertain to printing work done by the
respondent/plaintiff for the appellant/defendant and that the
appellant/defendant itself had taken this printing work for being done
from M/s Moser Baer India Ltd. After the suit was originally filed and
the appellant/defendant took up a stand in the written statement that
the work which was defective under the invoices dated 31.10.2001
pertain to its client M/s Moser Baer India Ltd the respondent/plaintiff
RFA Nos.1007/2017 & 1014/2017 Page 8 of 16
communicated with M/s Moser Baer India Ltd and this company
confirmed that it had not rejected the printed material received from
the respondent/plaintiff through the appellant/defendant but M/s
Moser Baer India Ltd itself had asked during the printing process for
changing of its design and had consequently compensated the
appellant/defendant in this regard. The letter given by M/s Moser Baer
India Ltd dated 19.8.2006 was proved by the respondent/plaintiff as
Ex.PW1/20. On account of this response of M/s Moser Baer India
Ltd, the respondent/plaintiff amended its plaint and added paras 17A
and 17B and which aspects were proved by the respondent/plaintiff
during the course of its evidence and such aspects are discussed in
detail by the trial court in para 63 of its impugned judgment and which
para 63 reads as under:-
“63. This brings us to consider the issue no. 8. I have already discussed
the evidence of PW 1 and PW 2. It is already noted above that defendant
company has failed to lead any evidence to substantiate that material
supplied by the defendant to its clients M/s Moser Baer India Ltd. was
rejected by its clients on account of any defects in the printing of Inlay
Cards and folders. Plaintiff, however, by way of amendment in
the plaint brought out certain facts as mentioned in para no. 17 A and 17
B of the plaint. PW 1 has also testified in his additional
affidavit of examination in chief (para no. 3 & 4) in this regard, that
plaintiff company has informed to M/s Moser Baer India Ltd. about
the outstanding amount Rs.17,85,842/- payable by defendant company
as well as filing of the suit for recovery. PW 1 says that M/s Moser Baer
India Ltd. in response to clarification sought by the plaintiff has stated that
no material supplied against purchase orders had been rejected by it due to
bad quality or otherwise. Such letter of M/s Moser Baer India Ltd.
RFA Nos.1007/2017 & 1014/2017 Page 9 of 16
Dated 19.08.2006 is Ex.PW1/20. Nothing came in the
cross-examination of PW1 to disbelieve his evidence or to negate
the fact regarding sending of letter dated 19.08.2006 Ex.PW1/20 by M/s
Moser Baer India Ltd. PW 1 was simply suggested that he was not present
when such letter Ex.PW1/20 was signed. Thus, reading the
evidence of PW 1 alongwith this document Ex.PW1/20, it is
established that the client of defendant company itself made it clear
that printed material of plaintiff was never rejected by M/s Moser Baer
India Ltd. on account of defects in the printing. Nothing has come
even in the evidence of DW 1 in this regard, thus, for the reason stated
above I find that plaintiff company has been able to establish both these
issue no. 4 & 8, by preponderance of probabilities. Issues no. 4 & 8 are
accordingly decided in favour of the plaintiff and against the defendant.”
(underlining added)
(iii) It is therefore clear that there was no defective work which was
done by the respondent/plaintiff even with respect to two invoices
dated 31.10.2001 bearing nos.8477 and 8478.
11. Learned counsel for the appellant/defendant argued that
there is a difference between proving of a letter and proving of
contents of the letter and it was argued that merely by the
respondent/plaintiff proving as Ex.PW1/20 the letter of M/s Moser
Baer India Ltd dated 19.8.2006 would not mean that this Court or the
trial court should have accepted the contents of Ex.PW1/20. This
argument of the counsel for the appellant/defendant is completely
misconceived because the issue with respect to M/s Moser Baer India
Ltd not rejecting printing material as defective was proved by the
RFA Nos.1007/2017 & 1014/2017 Page 10 of 16
respondent/plaintiff during the course of its evidence and if the
appellant/defendant doubted that M/s Moser Baer India Ltd had not
written the letter Ex.PW1/20 then there was no reason why the
appellant/defendant would not have summoned a witness from M/s
Moser Baer India Ltd to prove that the letter Ex.PW1/20 was not
written by M/s Moser Baer India Ltd to the respondent/plaintiff.
Obviously the appellant/defendant did not summon during the course
of its evidence any witness from M/s Moser Baer India Ltd because
there was no doubt as to the authenticity and the contents of
Ex.PW1/20. Accordingly, I reject the argument urged on behalf of the
appellant/defendant that the contents of Ex.PW1/20 are not proved.
12. It is therefore seen that the alleged defects stated by the
appellant/defendant for dismissing of the suit of the
respondent/plaintiff and for allowing of the counter-claim of the
appellant/defendant was in two parts. One part was with respect to the
goods supplied under invoices prior to 31.10.2001 and with respect to
which no complaint ever was raised by the appellant/defendant at any
point of time in writing that printing was defective and therefore the
trial court was justified in holding that the appellant/defendant had
RFA Nos.1007/2017 & 1014/2017 Page 11 of 16
failed to discharge its onus that the printing work was defective. So
far as the second part of the allegations of the printing work being
defective under two invoices dated 31.10.2001 is concerned, this was
proved to be completely baseless in view of the letter dated 19.8.2006
Ex.PW1/20 proved on behalf of the respondent/plaintiff and which
showed that M/s Moser Baer India Ltd never rejected the printing
material on the ground that it was defective and on the contrary M/s
Moser Baer India Ltd stated that it had itself asked for change of
printing and for such change of printing in fact the appellant/defendant
was suitably compensated. Clearly therefore the case of the
appellant/defendant of defective printing was false and was rightly
disbelieved by the trial court.
13. Some of the relevant observations of the trial court
judgment which refer to the reasoning, discussion and conclusion on
the relevant issues are paras 38 to 40, 52, 54, 56 and 57 and these
paras read as under:-
“38. As per plaintiff's case defendants company through its
Director Sh. Sanjeev Khemka, had approached plaintiff company
in Jan. 2001 for printing and processing of Inlay Cards and Folders. It is
also stated in the plaint that Director of Defendant company met with
principal officers of plaintiff company to discuss terms and
conditions for such job of plaintiff. After such meetings plaintiff
company sent communication dt 31.01.2001, signed by its regional sales
RFA Nos.1007/2017 & 1014/2017 Page 12 of 16
manager wherein specifications were given as well as other terms as
agreed between the parties in the meeting held in Jan 2001 were also
printed over leaf of that letter / quotation which is proved in the
evidence of PW¬1 as Ex.PW1/4. Defendant company in pleadings
has denied agreeing for any such terms and conditions, more
specifically the terms as enumerated in para 5 of the plaint and
discussed above. As such the onus of proving the issue under
consideration was on defendant.
39. Let us now consider the evidence on issue under
consideration. As stated above, PW-1 Rajan Khurana in para 6 of his
affidavit has testified that plaintiff company sent a communication dt
31.01.2001 Ex.PW1/4, mentioning therein different specifications for job
of printing Inlay Cards as well as the terms and conditions of such job,
which were printed on the overleaf of such letter Ex.PW1/4.
PW¬1 has also testified that defendant vide its response dt
02.02.2001, accepted the terms mentioned in the letter Ex.PW1/4,
by making two modifications regarding payment and delivery schedule.
PW¬1 proves the letter of defendant company dt 02.02.01 as Ex.PW1/5.
PW1 has also testified that defendant conveyed it acceptance at plaintiff's
Delhi Office. PW¬1 then went on to testify the pursuant to acceptance of
aforesaid quotations with terms and conditions of sale, defendant
company placed its orders from time to time for processing, printing and
supply of inlay cards and folders.
40. Such evidence of PW¬1, is not disputed, such documents
Ex.PW1/4 and PW1/5 are also not disputed and being matter of record.
Even in the cross examination of PW¬1 nothing has come to suggest
the witness that defendant had never accepted the specifications
mentioned in quotation Ex.PW1/4 or the terms and conditions mentioned
on the overleaf of that document. Rather, DW¬1 B.L.Prajapati when
appeared in the witness box has referred to these quotations and
letter dt 02.02.2001 of defendant company in para 3 of his
examination in chief. DW¬1 in his cross examination has
admitted that he has read the terms and conditions as stated in the
quotation Ex.PW1/4. DW¬1 further admits that upon accepting the
quotation Ex.PW1/4, defendant company has placed purchase order
with plaintiff company which is Ex.PW1/5. The specifications of
job of processing and printing as mentioned on the document
Ex.PW1/4 thus is not disputed. Although, there is a dispute with regard to
whether positives were to be supplied by defendant or were part of
contract, regarding which a separate issue (Issue no. 3) is framed and
therefore that aspect will be separately considered. Beside that
nothing has come in the evidence to dispute the other terms and
conditions as well as specifications as are mentioned on the quotations
Ex.PW1/4. Although, while responding to quotation Ex.PW1/4, certain
modifications were made in communication dt 02.02.2001
RFA Nos.1007/2017 & 1014/2017 Page 13 of 16
Ex.PW1/5, Reading of PW-1 /4 and PW1/5 make it clear that defendant
company accepted the terms and conditions as given in the
quotations (Overleaf) by its response dt 02.02.2001 Ex.PW1/5.
Accordingly, I find that plaintiff company has been able to
establish the specifications as mentioned in Ex.PW1/4 along with
conditions of sale and defendant company has failed to prove that
such specifications and conditions of sale were not accepted by it. Issue
accordingly decided against the defendant and in favour of plaintiff.
xxxxx xxxxx xxxxx
52. PW¬1 says that in respect of all the bills of total amount of Rs.
57,34,065/- , after taking the payment of Rs.39,48,233/¬ there was a
balance of Rs.17,85,842/- towards defendant as per the statement of
account Ex.PW1/7. PW-1 then went on to testify that a letter dt
29.01.2002 Ex.PW1/8, was written to Director of Defendant company.
On the same day, communication was received from defendant company
being Ex.PW1/9, whereby amount due though was acknowledged.
However, a plea was taken by defendant for certain reconciliation of
account. PW¬ 1 then says that in response to letter of defendant company,
plaintiff company wrote letter dt 30.01.2002 Ex.PW1/10,
informing it that outstanding balance of Rs.19 lacs, without admitting the
allegations of defects in the printing work. PW¬ 1 also testifies that
thereafter Director of Defendant Company and authorized
Representatives were called upon to meet regarding payment of
outstanding amount. PW¬1 says that to the utter shock of the plaintiff
company it received letter dt 10.04.2002 from defendant. Whereby it is
stated that it is returning certain goods printed and delivered by
plaintiff company.
54. Keeping such defence of defendant in mind, if we examine the
evidence of PW1 and PW2. These witnesses have proved different
invoices which are collectively exhibited as Ex.PW1/16 and
Ex.PW1/17 as well as Delivery Challans which are Ex.PW1/18 &
PW1/19. It would be evident from perusal of these invoices and delivery
challans that goods of printed inlay cards and folders were supplied after
carrying out the job of printing and processing the same lastly by
31.10.01. Thereafter, when plaintiff company e-mailed a letter dt
29.01.2002 Ex.PW1/8 demanding the outstanding amount, defendant
company also e-mailed communication dt 29.01.2002 Ex.PW1/9. It is
for the first time in this communication dt 29.01.2002 Ex.PW1/9,
defendant simply stated that “there is a quality issue on 30 lacs inlay sets
and reconciliation of paper, therefore, payment has been holded.”
Even in this letter also it is not specified as to what was the quality issue /
defect in the printing. Now, in this regard if I consider the evidence
of PW-1, in cross examination nothing has come to specify about the
defects in the printing work of 30 lacs inlay cards as alleged by the
RFA Nos.1007/2017 & 1014/2017 Page 14 of 16
defendants. In this regard, it is important to note that as per the
conditions of sale, defendant company was given opportunity to
inspect and make comparison between machine proof and completed
job. It was also agreed under the conditions of sale that once delivery of
printed material accepted, no subsequent complaint can be considered to
be genuine / bonafide made beyond period of 4 days from the date of
receipt of job / printed goods. In this case, printed material of inlay cards
and folders was lastly delivered on 31.10.2001, but there is no evidence on
the record to show that immediately thereafter defendant company
raised the issue of defects in the inlay cards / folders or issue that its
client M/s. Moser Baer did not accept the printed goods on the ground of
quality of printing. Such issue as noted above for the first time was raised
in the mail / communication Ex.PW1/9 on 29.01.2002. That too without
any much details as to what are the defects in the printing. Merely alleging
the printing is defective, was not sufficient for defendant to avoid the
liability.
56. Raising an issue of defective printed goods, at later stage had no
legal relevance more specifically when such issue has been raised
without even any evidence on the record as to what was the defect in those
goods / 30 lacs inlay cards as alleged by defendant. In this regard,
if we consider the evidence of DW1 B.L.Prajapati he has simply
testified in para 8 of his affidavit of examination in chief that out of total 1
crore inlay cards that were to be printed by plaintiff company for
defendants client, M/s. Moser Bare, 30 lacs inlay cards were totally
defected as composition did not lodged the approved design. DW-1
says that on 29.01.2002 defendant informed plaintiff about the defect in 30
lacs inlay cards and also about the loss incurred on account of paper
wasted due to defective printing. DW-1 in his cross examination
has admitted that plaintiff company delivered the consignment of printed
inlay cards and folders from time to time by different challans. Although
DW1 has testified that consignment was received by them subject to
verification. However, witness has admitted that he has never
given anything in writing regarding any defect in material prior to
letter dt 29.01.2002 and 30.01.2002. When DW-1 was specifically asked
as to whether he can show any complaint lodged by defendant
company till 31.12.2001, regarding any defective material. Witness has
simply replied that all the objections were verbally raised till
31.12.2001 and later by letters/ mail dt 29.01.2001 and 30.01.2001 were
sent.
57. DW-1 has further admitted in his cross examination that he cannot
specify the exact mode or manner by which defendant tried to return the
30 lacs sets of inlay cards if they were so defectively printed. DW-1 has
specifically admitted in cross examination that defendant company had not
tried on its own to send back the alleged defective material to plaintiff
RFA Nos.1007/2017 & 1014/2017 Page 15 of 16
prior to 29.01.2001. Such evidence of DW-1 coupled with nothing coming
in cross examination of PW-1 & 2 to establish any defect in the
printing of inlay cards sets. Moreover, no witness has been
examined from M/s. Moser Baer to establish the fact as alleged by
defendant in the WS that such 30 lacs inlay card sets were rejected
by defendant's client Moser Baer. Thus, from the above
discussion of law and the evidence I find that defendant company had
failed to establish that the printed inlay cards and folders as sent by
plaintiff company were defective in any manner.” (underlining added)
14. In view of the above discussion I do not find any merit in
the appeal. This appeal is therefore dismissed, leaving the parties to
bear their own costs.
RFA No.1014/2017 and C.M. Nos.43717/2017 (stay) & 43718/2017
(exemption)
15. In view of the discussion given while dismissing RFA
No.1007/2017, and adopting the said discussion and reasoning, this
appeal is also dismissed, and it is held that the trial court rightly
dismissed the counter-claim filed by the appellant/defendant. This
appeal is accordingly dismissed, leaving the parties to bear their own
costs.
DECEMBER 06, 2017 VALMIKI J. MEHTA, J
Ne
RFA Nos.1007/2017 & 1014/2017 Page 16 of 16