The court applied the principles from IDBI Trusteeship Services Ltd. v. Hubtown Ltd. to determine the grant of leave to defend and decreed the suit in favor of the plaintiff.

VALMIKI J. MEHTA, J.

I.A. No. 11669/2017 (for delay)

1. There is no opposition to this application which is allowed.

I.A. stands disposed of.

CS (COMM) No. 1099/2016 and I.A. No. 11575/2017 (under Order XXXVII Rule 3(5) CPC) with I.A. No. 13564/2016 (under Order XXXVII Rule 4 CPC)

2. By the subject leave to defend application, the defendant

3. The facts as per the suit plaint which is filed under Order XXXVII CPC is that plaintiff seeks a money decree for a sum of Rs.1,13,10,000/- as the balance amount payable under a written contract dated 6.5.2013 and also a further sum of Rs.38,45,961/- on account of differential tax/VAT paid by the plaintiff on account of non-supply by the defendant to the plaintiff of the C-Forms as was obligated upon the defendant in terms of the aforesaid agreement dated 6.5.2013.

4. The facts of the case are that plaintiff has pleaded in the suit that the defendant as a sole proprietor of M/s Sai Sales approached the plaintiff for a franchisee agreement to be entered into between the parties for the plaintiff to supply to the defendant shoes and other sports apparels of Reebok brand. In terms of business arrangement between the parties plaintiff supplied goods to the defendant. Defendant was to supply the C-Forms to the plaintiff in addition to the price of the goods purchased by the defendant from the plaintiff.

5. Plaintiff discontinued the existing business model and offered an alternative business model to the defendant after 30.11.2012, but this was not suitable to the defendant, and therefore the business relationship between the parties stood terminated on 30.11.2012

6. Parties on 6.5.2013 entered into a full and final settlement agreement whereby in terms of this agreement dated 6.5.2013 the defendant agreed to pay a sum of Rs.1,30,00,000/- to the plaintiff in full and final satisfaction of the dues of the plaintiff. The defendant also agreed to provide the C-Forms under the Central Sales Tax Act, 1956 as the defendant was to pay the necessary sales tax.

7. As per the plaint the plaintiff pleads that defendant has paid only an amount of Rs.65,00,000/- in terms of the agreement dated 6.5.2013 leaving a balance due of the sum of Rs.65,00,000/-. It is this principal amount along with interest which is claimed in the suit. In the suit the plaintiff also claims an amount of Rs.38,45,961/- which the plaintiff had to pay to the sales tax authorities on account of the defendant not providing the requisite C-Forms with respect to the transactions which were subject matter of the agreement dated 6.5.2013.

8. By the leave to defend application defendant seeks unconditional leave to defend. One defence which is raised and in the suit filed under Order XXXVII C.P.C., seeks unconditional leave to defend. argued before this Court on behalf of the defendant is that under the business relations which were put to an end with effect from 30.11.2012 the plaintiff had to collect goods which were dropped in the warehouse of the defendant of about Rs.4 crores and the plaintiff promised to give huge discounts to the defendant to dispose of the stock and this was because plaintiff requested the defendant to retain the stock with the defendant for some time. The second ground urged in the leave to defend application is that by the present suit the plaintiff cannot claim the amount of Rs.38,45,961/- inasmuch as there is no such liquidated liability specified in the agreement dated 6.5.2013 entered into between the parties. The third defence raised in the leave to defend application is that at the time of entering into of the agreement dated 6.5.2013 it was agreed that defendant will only pay the amount on the defendant being able to sell the stocks which were supplied by the plaintiff to the defendant. As regards supply of C-Forms the defendant has pleaded that it was because of the fault of the plaintiff that the defendant could not obtain the requisite C-Forms. It is also pleaded that the suit is barred by time. Finally