1 84 sj.508.09 ndm IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION SUMMONS FOR JUDGMENT NO. 508 OF 2009 IN SUMMARY SUIT NO. 2681 OF 2009 Super Tiles & Marbles Private Limited. ... Plaintiffs Versus Atlanta Limited. ... Defendants -------- Mr. Paritosh Jaiswal with Ashutosh Gavanekar i/b Kanga and Company for the Plaintiffs. Mr. M.M.Vashi i/b M/s. M.P.Vashi and Associates for the Defendants. -------- CORAM : A.S.OKA, J. DATE : 10 th January, 2011. ORAL JUDGMENT: 1 Heard the learned counsel appearing for the Plaintiffs in support of the summons for judgment and the learned counsel appearing for the Defendants. 2 This is a suit filed under Rule 2 of order XXXVII of the Code 2 84 sj.508.09 of Civil Procedure, 1908 praying for a decree in a sum of Rs.23,65,833/- with interest thereon at the rate of 18% per annum from the date of the suit till payment and/or realization. 3 The Plaintiffs are relying upon the work orders dated 8 th November, 2005 and 21 st February, 2006. Under the work order dated 8 th November, 2005, the Defendants entrusted work of providing and fixing of 80mm Monolayer Paver Blocks at Junctions and Main Carriage way at S.V.Road site of estimated quantity 30,000 sq mtrs at the rate of Rs.405/- per sq mtr. The terms and conditions were incorporated in the said work order. By the second work order dated 21 st February, 2006, the Defendants entrusted the work providing and fixing of 80 mm Paver Blocks at Borivali Road Junction for Highway works at the rate of Rs. 420/- per sq mtr. 4 The Plaintiffs are relying upon the bills issued by the Defendants. Reliance is placed on six different invoices issued by the Plaintiffs totally amounting to Rs.74,86,840/-. The date of the first invoice 3 84 sj.508.09 is 21 st February, 2006 and the date of last invoice is 12 th September, 2006. According to the Plaintiffs, total amount of Rs.58,32,418/- was received from the Defendants. A chart showing details of the invoices and amounts received from the Defendants has been incorporated in paragraph No.13 of the plaint. It is stated that after taking into consideration the total tax deduction at source in the sum of Rs.60,033/- total amount of Rs.15,94,390/- is payable by the Defendants. 5 Alongwith letter dated 22 nd January, 2007, the Plaintiffs forwarded their account confirmation to the Defendants. The Defendants forwarded their confirmation account showing that a sum of Rs.8,68,494/- was due and payable by the Defendants. The Plaintiffs by letter dated 13 th February, 2007 informed the Defendants that they are not agreeable with the statement sent by the Defendants and therefore, the Plaintiffs forwarded a statement the bills submitted by them and the bills certified by the Defendants. The Plaintiffs offered to take re-measurement. Reliance is placed on communication dated 12 th March, 2007 send by the Plaintiffs to the Defendants. In the said letter, a demand was made for 4 84 sj.508.09 payment of a sum of Rs.15,94,390/-. The response of the Defendants was by letter dated 26 th March, 2007. In the said letter, it was stated that only a sum of Rs.8,68,499/- was outstanding and that amount was kept outstanding as the Plaintiffs have not rectified the defective work at the site in spite of repeated reminders. It was stated that a sum of Rs. 8,68,499/- will be released only after the defects were rectified and full and final outstanding confirmation was sent. By letter dated 2 nd April, 2007 sent by the Plaintiffs to the Defendants, it was contended that the base was prepared by the Defendants. It was stated that even the M.M.R.D.A has approved the quality of the blocks and the Defendants had never complained regarding the quality of Paver Blocks prior to the date of notice. Again by letter dated 23 rd April, 2007, the Plaintiffs informed the Defendants that the Plaintiffs cannot be held responsible for any undulation due to stone dust and the Plaintiffs are not liable for such defects. The said letter was replied by the Defendants by their letter dated 26 th April, 2007. Thereafter, on 1 st June, 2007, legal notice was issued by the advocate for the Plaintiffs to the Defendants calling upon them to pay the alleged outstanding amount. 5 84 sj.508.09 6 It must be stated here that the Petitioners had filed a company petition for winding up of the Defendants on the basis of the same transaction. The company petition was dismissed with liberty to the Petitioners to adopt an appropriate remedy. In appeal preferred by the Plaintiffs, they have been permitted to withdraw the company petition with liberty to file a summary suit. 7 The learned counsel appearing for the Plaintiffs contended that there was absolutely no dispute raised by the Defendants about the quality of work and that the stand regarding deficiency is an afterthought. The learned counsel relied upon a decision of the Apex Court in the case of Sify Limited Vs. First Flight Couriers Limited, (2008) 4 SCC 246. The learned counsel appearing for the Defendants submitted that the substantial part of the suit claim was barred by limitation as the suit has been filed on 14 th October, 2009. In that behalf, he invited attention of the Court to the writ of summons served to the Defendants. He submitted that the stand taken by the Defendants is very consistent regarding 6 84 sj.508.09 deficiency in the work carried out by the Plaintiffs and that there are triable issues which will have to be gone into. He submitted that the company petition was dismissed after recording a finding that the claim required evidence. He submitted that in the circumstances, this is a case where unconditional leave deserves to be granted. 8 I have given careful consideration to the submissions. The suit is based on two work orders issued by the Defendants to the Plaintiffs. In the said order, the Plaintiffs have been referred to as STML and the Defendants as AL. The relevant terms and conditions thereof read thus: “2) AL’S RESPONSIBILITY: a) Raw Materials: AL will provide sand for bedding & filling joints at no costs to STMPL. b) Water & Electricity, if required, shall be provided free of costs. c) Proper Base shall be made ready with kerbing so as to enable you to commence the work. d) Mode of Payment: STMPL will submit fortnightly bills & payment will be made within 15 days from the date of submission of fornightly bill. e) Works Contract Tax: Form no.406 shall be provided by AL. ” 3) DEDUCTIONS: . Income Tax: Deductions of TDS will be as per applicable rules. 7 84 sj.508.09 . Retention money: No Retention Money shall be deducted.” 9 The terms and conditions of the work orders issued by the Defendants have been accepted by the Plaintiffs by singing on the work order. On 27 th April, 2006, the Plaintiffs wrote a letter to the Defendants stating that the Plaintiffs were submitting a running bill alongwith measurement. The Plaintiffs called upon the Defendants to inform them within 7 days from the date of the bill if there was any discrepancy in the measurement quantity. It is stated that if the information is not received within 7 days of submission of the bill, it will be automatically understood that “the quantity are accepted”. 10 Alongwith communication dated 22 nd January, 2007, the Plaintiffs forwarded their accounts for confirmation. On 31 st January, 2007, the Defendants forwarded details of the account of the Plaintiffs which showed that a sum of Rs.8,68,494/- was due and payable by the Defendants. By letter dated 13 th February, 2007, the Plaintiffs informed the Defendants that the Plaintiffs were not agreeable with the statement 8 84 sj.508.09 sent by the Defendants. Alongwith communication dated 26 th March, 2007, the Defendants forwarded to the Plaintiffs a detailed statement of site wise certified account, amounts paid and outstanding amount payable by the Defendants subject to rectification. In the said communication, the Defendants states thus: “This payment of Rs.8,68,499/- is kept outstanding since you have not rectified the defective work at site in spite of repeated reminders. The sum of Rs.8,68,499/- will be released after you rectify the defects and send us the full and final outstanding confirmation.” 11 Thus, in the said communication, it was stated that the amount will be released after rectification was carried out by the Plaintiffs. By letter dated 2 nd April, 2007, the Plaintiffs replied to the Defendants. Paragraph No.B of the said communication reads thus: “B) Regarding your not clearing even the amount agreed by showing the dispute about blocks settlement and surface worn out, we have to state as follows: a) Base is prepared by you therefore we are not at all responsible for settlement. Since you have prepared the base your are responsible for the settlement. b) Regarding surface worn out none of the blocks is like that. Even M.M.R.D.A. has approved the quality of the blocks. You have never made a complaint to us regarding quality of Paver Blocks prior to our notice. 9 84 sj.508.09 c) We have given you necessary test reports from the authorities whereby the blocks are according to the standard and you have tested all the blocks deliveries as per MMRDA system at the time of material deliveries and found it ok and continued the works with us now you are making a false issue just for not making the payment. d) You have never given reminder to us for rectification. All this is nothing but after thought process to hold our payment. In view of this we are giving you this laster reminder. If we do not receive payment within 48 hours we will be compelled to take appropriate action for winding up of your company under Section 433 / 434 of the Companies Act, 1956.” 12 The Defendants responded by the letter dated 19 th April, 2007. In paragraph No.3 of the said letter, the Defendants stated thus: “We again request you to reconcile the amount and quantity with our Accounts department. We also request you to rectify the defect a the same has occurred due to non compaction of sand with plate compactor while fixing the paver blocks and not due to settlement of base as alleged. This is apparent from the fact that settlement/unevenness is hardly 1 to 1.5cm” 13 On 23 rd April, 2007, the Plaintiffs replied to the Defendants. In the said reply, the Plaintiffs stated thus: “Regarding your holding the payment on account of defect we again submit that Paver Blocks have not settled at all because it is concrete product it is only your base that has settled and you have provided stone dust in place of river sand under the Paver Blocks. The stone dust has unevenly compacted under heavy traffic resulted in undulation and 10 84 sj.508.09 settlement up to 1 to 1.5cm as agreed by you. Thus, we cannot be hold responsible for any undulation or settlement due to stone dust. As this is not our defect we are not responsible.” 14 The terms and conditions of the work order provided that the Defendants shall make a proper base ready with kerbing so as to enable the Plaintiffs to commence the work of fixing paver blocks thereon. From the averments made in paragraph No.13 of the plaint, it appears that on 21 st February, 2006, first invoice was raised by the Plaintiffs and the last invoice was raised on 12 th September, 2006. It must be stated here that in the account statement forwarded by the Defendants, the amount due and payable by them was shown as Rs.8,68,494/-. It will be necessary to again make a reference to letter dated 26 th March, 2007 in which it is specifically stated by the Defendants that payment of Rs.8,68,499/- is kept outstanding since the Plaintiffs have not rectified the defective work at the site inspite of reminders. In the letter dated 2 nd April, 2007, the Plaintiffs came out with a case that the base was prepared by the Defendants. Thus, the stand taken on 2 nd April, 2007 was that base was prepared by the Defendants and therefore, the Defendants were 11 84 sj.508.09 responsible for the said defects. In letter dated 19 th April, 2007, the Defendants informed the Plaintiffs to rectify the defects as the same occurred due to non compaction of sand with plate compactor while fixing the paver blocks and not due to settlement of base. In their letter dated 23 rd April, 2007, the Plaintiffs admitted that the paver blocks have not been settled at all. It was stated that the Defendants had provided stone dust in place of river sand under the paver blocks. It was stated that the stone dust has unevenly compacted under heavy traffic which resulted in undulation. It is pertinent to note that the said specific case is made out by the Plaintiffs for the first time on 23 rd April, 2007. In the said letter, the Plaintiffs had admitted that the paver blocks have not been settled. Thus, what is admitted by the Plaintiffs is that the paver blocks have not been settled and allegation is made that all this has happened due to the defective base made by the Defendants. 15 The Defendants in their account statement have stated that payment of Rs.8,68,494/- was kept outstanding since defective work at the site was not rectified. Therefore, it cannot be said that even the 12 84 sj.508.09 amount of Rs.8,68,494/- is the admitted amount. 16 In the circumstances, in the present case, it cannot be said that the defence of the Defendants is a moonshine defence. This is a case where triable issues have been raised. The Defendants have a reasonable defence. As the Defendants appear to have a reasonable defence, in view of the law laid down by the Apex Court in the case of M/s. Mechelec Engineers & Manufacturers Vs. M/s. Basic Equipment Corporation, [(1976) 4 Supreme Court Cases 687], unconditional leave deserves to be granted to defend the suit. 17 Hence, summons for judgment is disposed of by granting unconditional leave to the Defendants to defend the suit. Written statement shall be filed within a period of twelve weeks from today. Suit shall be transfered to the list of commercial causes. [ A.S.OKA, J ]