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Surya Alloy Industries v/s Jay Prestressed Products Limited


Company & Directors' Information:- SURYA ALLOY INDUSTRIES LIMITED [Active] CIN = U27104WB1990PLC050102

Company & Directors' Information:- SURYA INDIA LIMITED [Active] CIN = L74899DL1985PLC019991

Company & Directors' Information:- SURYA INDUSTRIES PRIVATE LIMITED [Active] CIN = U17120GJ2008PTC053221

Company & Directors' Information:- SURYA PRODUCTS LIMITED [Active] CIN = U74899DL1995PLC067680

Company & Directors' Information:- JAY PRESTRESSED PRODUCTS LTD [Active] CIN = U51909WB1941PLC010605

Company & Directors' Information:- SURYA T V LIMITED [Strike Off] CIN = U74899DL2000PLC104798

Company & Directors' Information:- JAY AND CO INDIA PRIVATE LIMITED [Active] CIN = U51909DL1996PTC082695

Company & Directors' Information:- M. P. ALLOY PRIVATE LIMITED [Strike Off] CIN = U28111UP1995PTC018405

Company & Directors' Information:- ALLOY PRODUCTS PRIVATE LIMITED [Active] CIN = U74120UP2015PTC074423

Company & Directors' Information:- JAY INDUSTRIES PVT LTD [Strike Off] CIN = U15311AS1987PTC002778

Company & Directors' Information:- JAY JAY PRODUCTS PRIVATE LIMITED [Strike Off] CIN = U25202PB1987PTC007425

Company & Directors' Information:- B D K ALLOY PRIVATE LIMITED [Amalgamated] CIN = U27106KA1973PTC002355

Company & Directors' Information:- ALLOY INDUSTRIES PVT LTD [Strike Off] CIN = U51420WB1957PTC023457

Company & Directors' Information:- JAY CORP;ORATION LIMITED [Dissolved] CIN = U99999MH1950PLC007984

    C.S. No. 16 of 2017

    Decided On, 07 March 2018

    At, High Court of Judicature at Calcutta

    By, THE HONOURABLE MR. JUSTICE SAHIDULLAH MUNSHI

    For the Plaintiff: Raja Basu Chowdhury, Tanoy Chakraborty, Abhishek Singh, Advocates. For the Respondents: -----.



Judgment Text

This is a suit filed by plaintiff company, Surya Alloy Industries Limited, praying for a decree against the defendant for a sum of Rs.84,98,224/- together with pendentelite interest and interest on judgment @ 18% per annum and also for other consequential reliefs. Plaintiff has claimed above-mentioned decree for goods sold and delivered by it to the defendant. In a nutshell, the plaint case is as follows:-

a) Since inception of the plaintiff company it has been carrying on business of manufacturing diverse railway stores items including SGCI Inserts and metal liners of various specifications.

b) The defendant is engaged in a business of manufacturing of mono block concrete sleepers and represented it to be a Part-I approved vendor by Research Design and Standard Organization (RDSO) for manufacturing and supply of the aforesaid sleepers to Indian Railways.

c) Defendant approached the plaintiff at its registered office at Kolkata within the jurisdiction of this Court for supply of diverse quantities of SGCI Inserts, a material used for manufacturing of railway track items. The defendant represented that it had entered into an agreement dated 6th December, 2013 with the Engineer/TPS, Northern Railway for manufacturing and supply of pre-stressed mono block concrete sleeper (pre-tension type) for broad gauge (1673 mm.) to Drg No.T-2496 to suit 60 kg. UIC rail as per RDSO design and IRS specification No.T-39-85 (Third Revision May, 1996) (hereinafter referred to as the stores).

d) Pursuant to a negotiation that followed, at the office of the plaintiff, it agreed to supply and the defendant agreed to accept, SGCI Inserts of agreed size and specifications. It was further agreed that the supply would be effected on the basis of specific orders to be placed by the defendant upon the same being preinspected by RITES and that payment, therefore, would be released by the defendant as per invoice raised by the plaintiff immediately after 30 days from the date of dispatch of materials.

e) Defendant placed three separate purchase orders dated 9th November, 2015, 8th February, 2016 and 17th June, 2016 on the plaintiff for supply of 30,000, 60,000 and 1,00,000 pieces respectively of SGCI Inserts to the said defendant at the rates and on the terms as per purchase orders. The said purchase orders were placed at the registered office of the plaintiff at 1/1, Camac Street, 3rd Floor, Kolkata – 700016.

f) In order to execute the purchase orders from time to time the plaintiff invited RITES Limited by issuing call letters for inspection of SGCI Inserts once they are ready for supply to the defendant.

g) RITES duly inspected the said goods and on passing the same issued inspection certificate in respect of such goods.

h) In terms of the purchase order and upon having pre-inspected by RITES Limited the plaintiff supplied 1,23,710 pieces of SGCI Inserts under eight several invoices to the defendant which the defendant received, acknowledged and accepted without any dispute or demur on any count.

i) Against the total supply of Rs.1,08,10,686/- the defendant, from time to time, made part-payment to the tune of Rs.34,00,000/- to the plaintiff on account of the aforesaid supply. All such payments were made through RTGS/NEFT at the plaintiff’s Banker, State Bank of India.

j) Instead of making payment of the entire value of the supplies the defendant kept silent over the matter and inasmuch as the same in excess of Rs.74,10,686/- had fallen due, the plaintiff issued reminders requesting it to clear the balance sum of Rs.74,10,686/- by its letters dated 19th October, 2016 and 2nd December, 2016. It neglected to act on such reminders.

k) Therefore, the plaintiff is entitled to a total sum of Rs.84,98,224/-, that is, a sum of Rs.74,10,686/- being the amount outstanding on account of price of goods sold and delivered and Rs.10,87,538/- being interest thereon calculated till 31.01.2017.

l) The dealings and transactions being commercial in nature, the plaintiff has also demanded interest @18% per annum and, according to the plaintiff, it is entitled to such interest under Section 34 of the Code of Civil Procedure, 1908.

m) Agreement for sale of SGCI Inserts was concluded by and between the plaintiff and the defendant at the registered office of the plaintiff at 1/1, Camac Street, 3rd Floor, Kolkata – 700016.

n) Although, goods were supplied by it to the defendant outside the aforesaid jurisdiction, the defendant as debtor became obliged to sue their creditor, that is, the plaintiff at their registered office at 1/1, Camac Street, 3rd Floor, Kolkata – 700016, which falls within the jurisdiction of this Court. However, the orders for supply were made and received by the plaintiff at its said office within the jurisdiction of this Hon’ble Court.

o) It is also evident that part-payments were made and/or routed through the plaintiff’s banker within the jurisdiction of this Hon’ble Court. Accordingly, the plaintiff, in its plaint, has stated that part of the cause of action in the suit arose within the jurisdiction of this Court, however, part thereof arose outside the aforesaid jurisdiction.

p) While presenting the plaint this Court granted leave to the plaintiff under Clause 12 of the Letters Patent.

Before going to the real dispute in question I have checked whether the suit is maintainable or not. Material disclosed in the plaint shows that the suit is well maintainable in law as the plaintiff’s claim for the dues against the defendant has not yet been barred. Cause of action for the suit arose partly within and partly outside the jurisdiction and having regard to the leave granted under Clause 12 of the Letters Patent, this Court is vested with the jurisdiction to try the instant suit.

In this suit, despite service of writ of summons in due course, no one appeared for the defendant to contest the suit. Considering the report of the Deputy Registrar (Court) and (Judicial) dated 16th June, 2017, the matter was placed under the ‘undefended’ category and it was heard as an ‘undefended suit’.

In order to prove his case the plaintiff has produced various documents those were marked as Exhibits. Such documents are as follows:-

Ext. A (collectively) – photocopies of letters addressed to Mr. Gautam Chatterjee for M/s. Surya Alloy Industries Ltd. being purchase orders dated 09.11.2015, 08.02.2016 and 17.06.2016 respectively.

Ext. B (collectively) – letters dated 09.11.2015 addressed to M/s. RITES Ltd. being Inspection Charges against Jay Prestressed Products Ltd. and Inspection Call letter respectively. An original Money Receipt being No.39281 dated 12.11.2015.

Ext. C - An Inspection Certificate being Book No.3641 by RITES Ltd. dated 30.11.2015.

Ext. D (collectively) – letters dated 18.03.2016 addressed to M/s. RITES Ltd. being Inspection Charges against Jay Prestressed Products Ltd. and Inspection Call letter respectively. An original Money Receipt being No.41108 dated 18.03.2016. An Inspection Certificate being Book No.3727 by RITES Ltd. dated 09.04.2016.

Ext. E (collectively) – letter dated 29.03.2016 addressed to the General Manager/Insp., RITES Ltd. being an Inspection Call letter. An original Money Receipt being No.41196 dated 29.03.2016. An Inspection Certificate being Book No.3721 by RITES Ltd. dated 15.04.2016. Letters dated 12.08.2016 being Inspection Charges against M/s. Jay Prestressed Products Ltd. and an Inspection Call letter respectively. An original Money Receipt No.43024 dated 12.08.2016. An Inspection Certificate being Book No.3795 by RITES Ltd. dated 25.08.2016.

Ext. F (collectively) – Several Tax Invoices and consignment challans of Radha Krishna Roadways.

Ext. G (collectively) – Two letters written by Mr. Subhas Chandra Jana, Advocate for Surya Alloy Industries Limited dated 19th October, 2016 and 2nd December, 2016 regarding Non-payment of his client’s dues with Postal Receipts.

In support of the plaint case plaintiff has examined one Arun Agarwal, who is Associated with the plaintiff, Surya Alloy Industries Limited, since August, 2015 as its Senior Executive and he knew the defendant. In the box the plaintiff has proved the original purchase orders dated 9th November, 2015, 8th February, 2016 and 17th June, 2016 being Exhibit ‘A’ (collectively). Witness has also identified and proved three several documents dated 9th November, 2015, 12th November, 2015 and 30th November, 2015. The first being a letter addressed to RITES limited mentioning the purchase order details and calculation of inspection charges; the second letter being the inspection call letter giving complete purchase order details; the third being the money receipt issued by RITES limited. The documents have been marked Exhibit ‘B’ (collectively). The witness also identified the inspection certificate issued by the RITES which certificate has been issued by RITES after inspection of goods and the Engineer being fully satisfied about the quality of the same. He identified the signature appearing on the said document which is marked Exhibit ‘C’. The witness further identified several other documents being letter dated 18th March, 2016, a money receipt dated 18th March, 2016, a document dated 9th April, 2016 and a copy of letter dated 29th March, 2016. The first letter dated 18th March, 2016 was addressed to RITES limited giving details of purchase order and calculation of inspection fees; second letter written to RITES limited mentioning details of purchase order; the third one is the money receipt on account of inspection charges paid; and the fourth one is the inspection certificate issued by RITES after verification of quality of the goods. The witness deposed that the original of the first two letters are with the RITES whereas the money receipt and inspection certificate shown to him are in original. The said documents have been marked Exhibit ‘D’ (collectively). The witness was shown several other documents being letter dated 29th March, 2016 which are inspection call letter addressed to RITES mentioning the details of purchase order. Another document shown to the witness was a money receipt dated 29th March, 2016; next document being an inspection certificate dated 15th April, 2016 issued by RITES after being satisfied about its quality; letter dated 12th August, 2016 addressed to RITES giving details of purchase order and calculation of inspection charges; a letter being inspection call letter dated 12th August, 2016 addressed to RITES mentioning therein details of purchase order; the other document being original money receipt dated 12th August, 2016 and the last one is the inspection certificate dated 25th August, 2016 issued by the RITES, the originals whereof are lying with RITES. The witness identified the signature appearing on these documents those were marked Exhibit ‘E’ (collectively).

In question no.27, the witness deposed that the goods were dispatched at the factory of the defendant. In question no.28, when the witness was shown 15 documents, he identified those to be tax invoices issued after the goods were loaded into the trucks and that the goods were accompanied by consignment note issued by the transport company ‘Radhakrishna Roadways’. The witness also deposed that consignment note shows that the materials were delivered at the defendant’s factory. The consignment note bears the seal and signature of the consignee. However, at no point of time was there any objection or dispute raised by the defendant. The witness confirmed in the box that plaintiff was required to supply under four several purchase orders, 1,90,000 number of SGCI Inserts and out of which record shows that 1,23,000 numbers were supplied by the plaintiff to the defendant and identifying the documents marked Exhibit ‘F’ the plaintiff asserts that the plaintiff supplied 1,23,710 number of Inserts to the defendant. The witness deposed that because the defendant was unable to pay the agreed amount, the plaintiff discontinued to supply further materials of SGCI Inserts. However, according to the witness, part-payment has been made to the extent of Rs.34,00,000/- and for the balance amount the plaintiff issued demand notices on 19th October, 2016 and 2nd December, 2016 written by the plaintiff’s Advocate, Mr. Subho Chand Jana. Letters were sent on the instruction of the plaintiff demanding dues on their behalf from the defendant. The letters were sent under registered cover with acknowledgment due but the defendant never responded to the said letter. On perusal of the demand letter and the postal receipts being Exhibit ‘G’ (collectively), it is seen that the letters were sent under registered cover and even after expiry of 30 days, the acknowledgement due cards were not received back. On a scrutiny of the postal receipts it further appears that the postal envelopes were properly addressed, prepaid and duly sent by registered post with acknowledgment due. In such circumstances, drawing analogy to the provisions of proviso to sub-Rule (5) of Rule 9 of Order V, Court can presume that the letters of demand were received by the defendant but they did not respond to the same in order to avoid payment of the dues to the plaintiff. In such circumstances, the documentary proof made available before this Court together with the unchallenged oral testimony of the plaintiff establishes that the plaintiff is entitled to the claim as made out in the plaint, that is, the claim for a sum of Rs.74,10,686/- (Rupees Seventy Four Lakh Ten Thousand Six Hundred Eighty Six) only, bei

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ng the principal amount outstanding on account of price of goods sold and delivered to the defendant by the plaintiff. The plaintiff has, however, claimed that there was an understanding between the plaintiff and the defendant that in case of any default, the defendant would be liable to pay interest on any sum due and payable by it, would be charged @ 18% per annum. However, in absence of any agreement or proof that the defendant is liable to pay interest @ 18% per annum, this Court holds that the defendant, in any case, should make payment of some interest on the admitted dues and in this case, in exercise of discretion, this Court holds that plaintiff is entitled to interest @ 9% per annum from 31.01.2017 as mentioned in paragraph 16 of the plaint. Therefore, the interest would be Rs.7,24,393/- (Rupees Seven Lakh Twenty Four Thousand Three Hundred Ninety Three) only, till the date of disposal of this suit. The defendant is directed to make payment of the entire sum together with interest as indicated above, within a period of three months from the date of communication of the decree failing which the defendant shall be liable to pay further interest @ 9% per annum on the entire decretal amount till realization thereof. Suit is decreed for a sum as indicated above. Department is directed to draw up and complete the decree as expeditiously as possible. Urgent Photostat certified copy of this judgment, if applied for, be delivered to the learned counsel for the parties, upon compliance of all usual formalities.
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