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2017 Supreme(Del) 1947
IN THE HIGH COURT OF DELHI AT NEW DELHI
DEEPA SHARMA, J.
Vatech Global Co. Ltd - Plaintiff
Versus
Unicorn Denmart Ltd & Ors. - Defendants
Cs(Os) 1849 Of 2015
Decided On: 30-05-2017
For The Plaintiff :Mr. Vinod Khurana, Mr. Mohinder Vig And Mr. Nitin Sen, Advocates
For The Defendants :Mr. Suhail Dutt, Sr. Advocate Along With Ms. Gunjan Kumar And Mr. Azhar Alam, Advocates
Headnote:
ORDER 37 CPC - SUMMARY SUIT - INVOICE - WRITTEN CONTRACT - LEAVE TO DEFEND - SUMMONS FOR JUDGMENT - AFFIDAVIT OF ADVOCATE - DEFECTIVE SUMMONS - CURABLE DEFECT - DEPOSIT OF ADMITTED DUE AMOUNT - CONDITION PRECEDENT:
Fact of the Case:
Plaintiff, an international company dealing with manufacturing of high tech dental 2D and 3D digital imaging Equipments and software, had a business relationship with Defendant No.1, a company engaged in providing goods and services in range of dental equipments. As per the standard practice between them, the plaintiff raised performa invoices for the purpose of purchase of dental devices including “Intra Oral Sensor” and “Digital X- Ray System”. The defendants released 50% of advance based on the performa invoices and the plaintiff executed the order and raised commercial invoices. Despite repeated reminders, the defendants did not pay the balance payment of 50% value as mentioned in the invoices. The plaintiff filed a suit under Order 37 CPC seeking a money decree for the outstanding payment. The defendants filed applications under Order 37 Rule 3(5) along with the application for condonation of delay of 25 days in filing the said application along with reply affidavit for leave to defend the case.
Finding of the Court:
The Court held that the invoices formed a valid Contract between the parties and that the suit was maintainable under Order 37 CPC. However, the Court also held that the summons for judgment was defective as it was not accompanied by the affidavit of the plaintiff, but by the affidavit of the plaintiff's Advocate. The Court further held that this defect was incurable and that the plaintiff was not entitled to a decree under Order 37 CPC.
Issues: 1. Whether the suit was maintainable under Order 37 CPC? 2. Whether the summons for judgment was defective? 3. Whether the defect in the summons for judgment was curable?
Ratio Decidendi: 1. The Court held that the invoices formed a valid Contract between the parties and that the suit was maintainable under Order 37 CPC. The Court relied on the fact that the invoices contained all the terms and conditions of the Contract, including the description of goods, quantity of goods supplied, its value and payment terms. 2. The Court held that the summons for judgment was defective as it was not accompanied by the affidavit of the plaintiff, but by the affidavit of the plaintiff's Advocate. The Court relied on the provisions of Order 37 Rule 3(4) CPC, which requires that the summons for judgment shall be served in Form No. 4 A of Appendix B, which in turn requires the Court to pass an order only on the basis of the affidavit of the plaintiff. 3. The Court held that the defect in the summons for judgment was incurable. The Court relied on the fact that the plaintiff did not make any effort to substitute the affidavit of its Advocate with that of its own.
Final Decision: The Court granted leave to defend to the defendants, subject to the condition that they deposit the admitted due amount with the Registrar General within six weeks from the date of the order. In case, the money is not deposited by the defendants within the stipulated period, application for leave to defend shall be considered to have been dismissed and the plaintiff shall be liable for the decree.
I.A. 25396/2015 (by defendants u/O 37 R 3 (5) r/w S. 151 CPC for leave to defend) I.A No. 25397/2015 (under Section 5 of Limitation Act seeking condonation of delay in filing the application under Order 37 Rule 3(5) CPC)
1. The present suit has been filed by the plaintiff under Order 37 CPC.
It is submitted that plaintiff is an international company incorporated under the laws of Republic of Korea and having its registered office at 13, Samsung 1-ro 2-gil, Hwaseong-si, gyeonggi-do, 445-170, Korea. Mr. Sookeun Park is the Representative Director of Plaintiff and is authorised to sign and verify the pleadings and to institute the present suit on its behalf. A Copy of Board Resolution dated April 24, 2015 authorising Mr. Sookeun Park, has been placed on record.
2. The plaintiff is dealing with manufacturing of high tech dental 2D and 3D digital imaging Equipments and software headquartered in S. Korea. Plaintiff is engaged in designing, manufacturing and marketing state-of-the-art digital imaging products for dental CBCT etc. The plaintiff?s business has an international existence. Defendant no. 1 is Unicorn Denmart, a Company incorporated under the Company?s Act, 1956, and is engaged in the business of providing goods and services in range of dental equipments and is based at New Delhi having its registered office in Delhi. Defendant no. 2, Mr. Shammi Gumbhir, is the Managing Director of defendant no. 1 and Defendant no. 3, Mrs. Achla Gumbhir, is Whole time Director of defendant no. 1. Defendant no. 2 is involved jointly with other defendants in the management of defendant no. 1 and they all are jointly and severally responsible for the conduct of defendant no. 1. They had entered into a business relationship in 2009. The plaintiff had exported dental devices to defendants to market and sell them in India.
3. It was agreed between them that the defendants shall pay 50% of the advance of the required devices/equipments and on the release of that advance, the plaintiff shall execute the order and send the devices to the defendants and then the defendants shall within two months from the date of bill of lading, release the balance 50% amount to the plaintiff. This practice continued between the parties since 2009 and the email dated 05.11.2014 of the defendants confirmed the said fact. In the year 2014 in the month of September, defendant no. 1 placed an order for purchase of dental devices including “Intra Oral Sensor” and “Digital X- Ray System”. As per the standard practice between them, the plaintiff raised the performa invoices for that purpose.
The details are as follows:-
S.No. Performa Invoice No. (PINo.I Dated Commercial Value
1. VG141015-IN-Unicorn-01 15th Oct 2014 US$ 176,250.10
2. VG141031-11 31st Oct 2014 JPY28,320,600.00
3. VG141125-IN-Unicore-03 25th Nov 2014 US$317,300.00
4. VG141126-14 26th Nov 2014 JPYl 8,525,234.00
4. It is also submitted by the plaintiff that the defendants released 50% of advance based on the performa invoices and details are as under:-
Pro Inv No. Value-of-PI Amount-Transferred Date-of-Transfer
VG141015- INUnicorn-01 US$ 176,250.10 US$88,125 27th October 2014
VG141031-11 JPY28,320,60.00 JPY14,160,300 6th Nov 2014
VG141125-IN-Unicore-03 USS 317,300.00 US$158,650 23rd Dec 2014
VG141126-14 JPYl 8,525,234.00 JPY7,551,945.25 JPYl,710,672.00 2nd Dec 2014 5th Dec 2014
5. Bank statements that the amount was transferred against each mentioned Performa Invoices and credited to the plaintiff?s bank account were also enclosed by the plaintiff along with the suit.
6. It was contended that thereafter the plaintiff executed the order and raised the Commercial Invoices as per the details below:-
S.no. Commercial Invoice no. Performa Invoice no. Total Commercial value INR
1. VG141029- VG141015- USD dated 29th October 2014 VG141015-IN-Unicorn-01 dtd 15 Oct 2014 USD $176,250.10 1,11,03,756.30 (@63.00)
2. VG141226-INOl dtd 26th Dec 2014 VG141125-IN-Unicore-03 dated 25 Nov 2014 USD $317,300 1,99,89,900.00 (@63.00)
3. INOl dtd
