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DELHI HIGH COURT
Manmohan Singh, J.
JSL Media Ltd. - Appellant
Versus
Advert Communications Pvt. Ltd. - Resopndent
I.A. No. 17890/2014 & I.A. No. 6773/2014 in CS(OS) No. 152 of 2014
Decided On : 04-11-2015
Companies Act - Recovery Suit - 1956 - [Companies Act, 1956] - [Section 37, Section 151] - The court discussed the provisions of the Companies Act, 1956, particularly Section 37 and Section 151, which were relevant to the plaintiff's claim for recovery of outstanding dues from the defendant. The court emphasized that invoices and bills are considered as written contracts within the contemplation of Order XXXVII CPC, and cited relevant case law to support this interpretation. The court also referred to the principles established in M/s. Mechalec Engineers & Manufacturers v. M/s. Basic Equipment Corporation and Lohmann Rausher Gmbh v. Medisphere Marketing Pvt. Ltd. to determine the grant of leave to defend, emphasizing the requirement for a substantial and triable defense.
Fact of the Case:
The plaintiff, a company registered under the Companies Act, 1956, filed a summary suit for the recovery of outstanding dues against the defendant. The defendant had utilized the plaintiff's Bus Queue Shelters for advertisement purposes and had outstanding payments amounting to Rs. 37,43,911. Despite repeated reminders and adjustments from a security deposit, the defendant failed to clear the dues.
Finding of the Court:
The court found that the plaintiff had provided services to the defendant as per confirmed Purchase Orders and raised bills for timely payment. The defendant had acknowledged the receipt of bills and made part payments, but failed to clear the outstanding amount. The court rejected the defendant's grounds for leave to defend, emphasizing the existence of a binding contract through the invoices and bills, and decreed the suit in favor of the plaintiff with costs and interest.
Issues: The issues revolved around the acknowledgment of contractual obligations by the defendant, the validity of the plaintiff's claim for recovery, and the grant of leave to defend based on the defendant's grounds.
Ratio Decidendi: The court emphasized the significance of invoices and bills as written contracts within the contemplation of Order XXXVII CPC, and the requirement for a substantial and triable defense to grant leave to defend. The court also highlighted the acknowledgment of liabilities by the defendant through the acceptance of bills and part payments.
Final Decision: The court decreed the suit in favor of the plaintiff for the recovery of Rs. 37,43,911 with costs and interest, and rejected the defendant's application for leave to defend.
Manmohan Singh, J.:--
1. The plaintiff has filed the present summary suit under Order XXXVII CPC for the recovery of Rs. 37,43,911/- along with costs and interest against the defendant.
2. The plaintiff is a company registered under the provisions of Companies Act, 1956 (formerly known as Parivartan City Infrastructure Limited) with its Registered Office at 28, Najafgarh Road, New Delhi-110015 and Corporate Office at Jindal Centre, 12, Bhikaji Cama Place, New Delhi-110066. The name of the plaintiff Company was changed on 30th August, 2010. The Registrar of Companies was informed and the new name of the Company was entered by the Registrar of Companies. The fresh certificate of incorporation of the plaintiff Company dated 30th August, 2010 has been placed on record.
3. As per the plaint, the plaintiff has various Bus Queue Shelters (hereinafter referred to as “BQS”) at different locations/sites in the National Capital Territory of Delhi which the plaintiff gainfully uses for advertisement purposes. The defendant approached the plaintiff with the proposal for utilizing the display panels/spaces at agreed BQS for the display of advertisement by its various clients and the plaintiff permitted the defendant for utilizing the same, against payment of agreed amount, through the various confirmed Purchase Orders and/ or e-mails. The plaintiff was maintaining a running account in favour of the defendant in respect of the consideration/charges against the display of advertisements payable by the defendant, is a private limited company duly registered under the Act.
4. The defendant through various Purchase Orders and emails (hereinafter referred to as “Purchase Orders”) placed orders with the plaintiff for display of advertisements at plaintiff’s various BQS sites, the details of which has been given as under:-
S. No.PO. ReferencePO. DateBill AmountBus Q SheltersTotal
1.E-mail06.04.2010110,300 Part payment received and due amount is 77,12511
2.E-mail20.04.2010937,55055
3.E-mail20.04.2010173,17111
4.E-mail06.05.2010143,38922
5.E-mail06.05.2010110,30011
6.E-mail06.05.2010121,33011
7.E-mail26.05.2010937,55055
8.E-mail26.05.2010365,87233
9.E-mail03.06.201094,49433
10.E-mail03.06.201044,12011
11.AC/PO/10-1/02413.09.201093,75511
12.AC/PO/10-1/02313.09.2010148,90511
13.ACPL/PO/10-11/00309.11.2010248,17511
14.ACPL/PO/10-11/00827.12.2010248,17511
Total37,43,911
The above said Purchase Orders were accepted by the plaintiff.
5. It is stated in the plaint that the plaintiff as per these confirmed Purchase Orders allowed the defendant to display advertisements at the various BQS sites from time to time and accordingly raised bills against each accepted Purchase Order for timely payment by the defendant.
6. The defendant had duly signed and acknowledged the receipt, amounts payable and the contents of such bills raised by the plaintiff enumerating all the contractual obligations including payment terms agreed between the plaintiff and the defendant and clearly outlining the amount payable by the defendant to the plaintiff. Thus, the defendant had accepted and acknowledged its liability to pay the amount to the plaintiff within the agreed time period as raised in the bills. The details of all these Purchase Orders and bills along with outstanding payments in respect of the accepted Purchase Orders and the display of advertisements at the BQS sites of the plaintiff are here as under:
Sr. No. Bill No. Bill Date Amount
1. PCIL/2010-11/0392 04.01.2011 248,175/-
2. PCIL/2010-11/0357 30.11.2010 248,175/-
3. PCIL/2010-11/0284 30.09.2010 148,905/-
4. PCIL/2010-11/0279 22.09.2010 93,755/-
5. PCIL/2010-11/0232 29.08.2010 44,120/-
6. PCIL/2010-11/0231 29.08.2010 94,494/-
7. PCIL/2010-11/0230 29.08.2010 365,872/-
8. PCIL/2010-11/0229 29.08.2010 937,550/-
9. PCIL/2010-11/0228 29.08.2010 121,330/-
10. PCIL/2010-11/0227 29.08.2010 110,300/-
11. PCIL/2010-11/0226 29.08.2010 143,389/-
12. PCIL/2010-11/0225 29.08.2010 173,171/-
13 PCIL/2010-11/0224 29.08.2010 937,550
14. PCIL/2010-11/0218 29.
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