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2017 Supreme(Bom) 1605
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
S.J. KATHAWALLA, J.
Shree Pushkar Chemicals & Fertilizers Ltd. - Plaintiff
Versus
Huntsman (International) India Pvt. Ltd. - Respondent
Summons for Judgment No. 77 of 2016 in Commercial Summary Suit No. 53 of 2016
Decided On : 13-10-2017
Advocate Appeared:
For the Plaintiff : Dinyar Madon, Nilesh Tated, Ankita Agrawal, M/s. DSK Legal
For the Defendant : N.H. Seervai, Dipankar Bandopadhya, Priyanka Devgan, Gandhar Raikar
A party who has been defrauded is entitled to rescind the contract and recover damages from the other party. The defrauded party is not required to return the benefits received under the contract if the other party has been unjustly enriched by the fraud.
Headnote:
COMMERCIAL SUMMARY SUIT - SUMMONS FOR JUDGMENT - UNCONDITIONAL LEAVE TO DEFEND - FRAUD - CONFIDENTIALITY CLAUSE - SET OFF - VOIDABLE CONTRACT - RESTITUTION - DAMAGES - ADMISSION.
Fact of the Case:
Plaintiff filed a Commercial Summary Suit claiming Rs. 7,96,94,113/- with interest for goods supplied to Defendant under various Purchase Orders. Defendant entered appearance and filed an Affidavit seeking unconditional leave to defend the Suit. Plaintiff filed an Affidavit in Rejoinder and Defendant filed an Affidavit in Sur Rejoinder.
Finding of the Court:
The Court found that the Defendant had raised triable issues indicating that the Defendant has a bona fide, fair and reasonable defence. The Court also found that the Defendant was entitled to unconditional leave in the Suit.
Issues: 1. Whether the Defendant was entitled to unconditional leave to defend the Suit. 2. Whether the Defendant had raised triable issues. 3. Whether the Defendant was entitled to set off its damages against the Plaintiff's claim. 4. Whether the Defendant was required to return the benefits received under the voidable contract. 5. Whether the Defendant's admission of the amount due to the Plaintiff was binding.
Ratio Decidendi: 1. The Court held that the Defendant was entitled to unconditional leave to defend the Suit because it had raised triable issues indicating that it had a bona fide, fair and reasonable defence. 2. The Court held that the Defendant was entitled to set off its damages against the Plaintiff's claim because the Defendant had been defrauded by the Plaintiff. 3. The Court held that the Defendant was not required to return the benefits received under the voidable contract because the Plaintiff had been unjustly enriched by the fraud. 4. The Court held that the Defendant's admission of the amount due to the Plaintiff was not binding because it was made by a third party who was not privy to the facts of the case.
Final Decision: The Court granted the Defendant unconditional leave to defend the Suit. The Defendant was directed to file its Written Statement on or before 15th December, 2017. The hearing of the Suit was expedited and placed for framing of issues on 20th December, 2017.
Legal Category Hierarchy
-
commercial law
-
contract law
-
breach of contract
- damages
- set-off and adjustment of damages
- fraud and rescission
-
confidentiality
- confidential disclosure agreement
- duty of confidentiality
-
specific performance and injunctions
- injunction
- quantum meruit
-
breach of contract
-
sales of goods
- purchase orders and invoices
- payment disputes
-
set-off
- equitable set-off
- legal set-off
-
contract law
-
corporate law
- company capacity
-
civil procedure
- summary suit
- leave to defend
-
evidence and inspection
- search and seizure
-
commercial crimes
-
fraud
- conspiracy and fraud
-
fraud
1. The Plaintiff has filed the above Commercial Summary Suit claiming a sum of Rs. 7,96,94,113 (Rupees Seven Crores Ninety Six Lakhs Ninety Four Thousand One Hundred and Thirteen Only) with further interest on the amounts due and payable at the rate of 18% p.a. from the date of filing the above Suit till payment and/or realisation and the costs of the Suit.
2. After the writ of summons was served on the Defendant, the Defendant entered appearance through its Advocates. The Plaintiff therefore took out the above Summons for Judgment seeking a decree in the sum of Rs. 7,96,94,113/- with further interest on the amounts due and payable at the rate of 18% p.a. from the date of filing of the above Suit till payment and/or realisation and the costs of the Suit.
3. The Defendant filed an Affidavit seeking unconditional leave to defend the Summary Suit. The Plaintiff filed an Affidavit in Rejoinder and the Defendant filed an Affidavit in Sur Rejoinder.
4. The Plaintiff is a Public Limited Company registered under the provisions of the Companies Act, 1956. The Plaintiff claims to be one of India's leading manufacturers of dyestuffs, dye intermediates, fertilizers, sulphur base acids, animal feed additives etc. The Defendant is a Private Limited Company incorporated under the provisions of the Companies Act, 1956, and is, inter alia, engaged in the business of manufacturing of textile reactive dyes.
5. According to the Plaintiff, in accordance with the prices negotiated between the parties, the Defendant issued Purchase Orders to the Plaintiff commencing from 24th December, 2015, and the Plaintiff acting upon those Purchase Orders supplied H-Acid, K-Acid and Vinyl Sulphone to the Defendant under separate delivery challans and goods consignment notes. The Plaintiff also raised separate invoices for each such delivery. For the sake of convenience, the Plaintiff has tabulated the details in relation to the outstanding invoices in paragraph 4 of its Written Submissions. The same is reproduced hereunder:
Sr. No.
Invoice No.
Date
Item Name
Quantity
Amount (Rupees)
Purchase Order No.4400559318 dated December 24, 2015 (Ex.C to Plaint at pp.42-45)
1.
80002 (Ex.F – p.50)
April 4, 2016
H Acid
7,220.25
31,13,056
2.
80037 (Ex.J – p.54)
May 10, 2016
H Acid
7,438.13
32,06,994
3.
80041 (Ex.N – p.58)
May 17, 2016
H Acid
3,200.00
13,79,700
Purchase Order No. 4400559407 dated December 28, 2015 (Ex.R to Plaint at pp.65-68)
4.
80017 (Ex.U– p.71)
April 18, 2016
K Acid
5,660.00
16,04,610
5.
80031 (Ex.Y– p.75)
May 6, 2016
K Acid
7,505.13
21,27,703
Purchase Order No. 4400560688 dated January 5, 2016 (Ex.BB to Plaint at pp.80-83)
6.
80016 (Ex.EEp. 86)
April 16, 2016
H Acid
7,221.38
32,84,146
7.
80026 (Ex.II – p.90)
May 2, 2016
H Acid
11,216.50
51,01,054
8.
80033 (Ex.MM -p.94)
May 8, 2016
H Acid
11,200.00
50,93,551
9.
80036 (Ex.QQ– p.98)
May 10, 2016
H Acid
3,780.00
17,19,074
10.
80042 (Ex.UU– p.102)
May 17, 2016
H Acid
8,030.25
36,52,007
11.
80044 (Ex.YYp. 106)
May 22, 2016
H Acid
11,214.90
51,00,326
Purchase Order No. 4400563396 dated January 14, 2016 (Ex.A3 to Plaint at pp.117-120)
12.
80182 (Ex.A6 – p.123)
March 13, 2016
Vinyl Sulphone Ester
12,960.00
26,48,456
13.
80185 (Ex.A10 – p.127)
March 17, 2016
Vinyl Sulphone Ester
15,360.00
31,38,911
14.
80001 (Ex.A14 – p.131)
April3, 2016
Vinyl Sulphone Ester
15,360.00
31,38,911
15.
80010 (Ex.A18 – p.135)
April 11, 2016
Vinyl Sulphone Ester
13,440.00
27,46,548
16.
80018 (Ex.A22 – p.139)
April 19, 2016
Vinyl Sulphone Ester
13,440.00
27,46,548
17.
80021 (Ex.A26 – p.143)
April 25, 2016
Vinyl Sulphone Ester
13,440.00
27,46,547
18.
80025 (Ex.A30 – p.147)
May 1, 2016
Vinyl Sulphone Ester
13,440.00
27,46,547
19.
