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IN THE HIGH COURT OF DELHI
Amit Bansal, J.
Vatech Global Co. Ltd. - Appellant
Versus
Unicorn Denmart Ltd. - Respondent
CS(COMM) 857 of 2017 and CS(COMM) 1 of 2016
Decided On : 04-08-2022
Binding invoices constitute valid agreements; claims for damages require substantiated evidence, which was lacking.
Headnote:(A) Code of Civil Procedure, 1908 - Order XXXVII - Cross suits for recovery of amounts and damages for breach of contract - The appellant claimed for recovery of Rs. 2,77,26,742/- and interest while the respondent sought damages of Rs. 4.01 crores for breach of agreed terms - Court found that invoices raised by the appellant constituted a binding agreement - No breach was established by the respondent - The claims for damages were dismissed. (Paras 18, 20, 30, 43, 51)
(B) Limitation - The court held that the suit by the respondent was not barred by limitation as the breach occurred in 2014 while the suit was filed thereafter. (Paras 18)
Facts of the case:
These suits arose from a failure of payment and alleged breach of contract between the parties concerning the supply of dental equipment and exclusive distribution rights. The appellant provided invoices for goods which the respondent accepted but later disputed over a claimed breach. (Paras 1-6)
Findings of Court:
The invoices represented a valid and binding contract; the respondent's claims for damages were not supported by evidence and were thus dismissed. (Paras 30, 51)
Issues: The main issues included validity of the invoices, timing of payments, and breach of contract claims. (Paras 10, 11)
Ratio Decidendi: The court ruled that while the respondent claimed damages for alleged breaches, it failed to substantiate its claims and admitted to being liable for the invoices raised; thus, the non-payment was unjustifiable. (Paras 51, 59)
Result: The suit of the appellant was decreed in its favor for the principal amount with interest and costs, while the respondent's suit was dismissed.
| Table of Content |
|---|
| 1. factual background of the cases. (Para 1 , 2) |
| 2. arguments on distribution agreements. (Para 4 , 6 , 8) |
| 3. issues framed for resolution. (Para 10 , 11) |
| 4. decision on limitation in claims. (Para 18 , 19 , 20) |
| 5. validity of invoices as contracts. (Para 29 , 30) |
| 6. duration and operation of distributor agreement. (Para 31 , 42) |
| 7. evaluation of unicorn’s damage claims. (Para 51 , 54 , 56) |
| 8. objections regarding maintainability of suits. (Para 60 , 62) |
| 9. final decree and relief granted. (Para 70 , 71) |
JUDGMENT
Amit Bansal, J. By this common judgment I shall decide both the captioned cross suits. CS(COMM) 857/2017 was filed on behalf of Vatech Co. Ltd. (hereinafter referred to as `Vatech') as a summary suit under Order XXXVII of the Code of Civil Procedure, 1908 (CPC) seeking recovery of Rs.2,77,26,742/- along with interest of Rs.14,68,444/- computed from the due date till the date of filing of the suit along with pendente lite and future interest @ 14% per annum. CS(COMM) 1/2016 was filed on behalf of Unicorn Denmart Ltd. (hereinafter referred to as `Unicorn') for recovery of Rs.4,01,00,000/- towards damages for breach of agreed terms by Vatech along with future interest @12% per annum.
2. It has been pleaded on behalf of Vatech in CS (COMM) 857/2017 that:
(i) Vatech is an international company incorporated under the laws of Republic of Korea and is one of the world's leading manufacturers of high-tech dental 2D and 3D digital imaging equipment and software.
(ii) Vatech exports its product to more than twenty countries across the world.
(iii) Mr. Shammi Gumbhir, defendant no. 2, is the Managing Director of Unicorn and the defendants no.3 and 4 are the directors of Unicorn. Unicorn is in the business of providing goods and services in India in respect of dental equipment.
(iv) Vatech and Unicorn were doing business with each other since 2009, in terms of which Vatech was supplying dental devices to Unicorn to market and sell them in India.
(v) As per the agreed payment terms, 50% of the amount was required to be paid in advance by Unicorn and the balance 50% within two months from the date of Bill of Lading.
(vi) Between September and December, 2014, Unicorn placed purchase orders on Vatech for supply of the following goods:
(a) 132 sensors via e-mail on 14th October, 2014.
(b) 28 OPG(PaX-i) and 28 Sensors via e-mail on 11th November, 2014.
(c) 10 PaX-i and 4 PaX-i SC via e-mail on 1st December, 2014.
(d) 250 sensors via e-mail on 19th December, 2014.
(vii) Based on the aforesaid purchase orders Vatech raised the following proforma invoices on Unicorn:
| S.No. | Date of Invoice | Commercial Value |
| 1. | 15th October, 2014 | USD 176,250.00 |
| 2. | 31st October, 2014 | JPY 28,320,600.00 |
| 3. | 25th November, 2014 | USD 317,300.00 |
| 4. | 26th November, 2014 | JYP 18,525,234.00 |
(viii) Unicorn released 50% of the amounts based on the aforesaid proforma invoices.
(ix) Accordingly, Vatech executed the orders and raised the following commercial invoices:
| S.No. | Date of Invoice | Total Commercial Value | INR |
| 1. | 29th October, 2014 | USD 176,250.10 | 1,11,03,756.30 (@ 63.00) |
| 2. | 19th November, 2014 | JPY 28,320,600.00 | 1,47,26,712.00 (@ 0.52) |
| 3. | 26th December, 2014 | USD 317,300 | 1,99,89,900.00 (@ 63.00) |
| 4. | 11st December, 2014 | JPY 18,525,234.00 | 96,33,121.68 (@ 0.52) |
The terms of the payment were duly mentioned in the aforesaid proforma invoices as well as the aforesaid commercial invoices.
(x) The goods in respect of the aforesaid invoices for which 50% payments were received, were duly dispatched by Vatech to the defendants and were delivered to the defendants as per schedule.
(xi) As per the agreed payment terms, the balance payment of 50% in respect of the aforesaid invoices was to be paid within 60 days of the Bill of Lading, however, Unicorn failed to make the said payment.
(xii) Various reminders were sent by Vatech to Unicorn. However, Unicorn failed to pay the amount.
(xiii) Vatech sent a legal notice dated 6th May, 2015 to Unicorn calling upon them to clear the unpaid invoices.
