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Case Name: Casa 2 Stays Pvt. Ltd. v. Comfia Ecom Pvt. Ltd. 

Case No.: RFA(COMM) 187/2023 

Dated: May 13,2024 

Quorum:  Justice Vibhu Bakhru and Justice Tara Vitasta Ganju  

 

FACTS OF THE CASE: 

The appellant filed the current appeal contesting a judgement and decree dated 21.03.2023 (referred to as the impugned judgement) that was corrected by an order dated 09.08.2023, which was granted by the learned Commercial Court in the case of Comfia Ecom Private Limited v. Casa 2 Stays Private Limited.  

Under the terms of the contested judgement, the learned Commercial Court awarded the respondent (hereafter referred to as the respondent) ₹8,49,385/-as well as interest at the rate of 18% annually from the date the suit was filed until the decretal amount was realised.  

The initial delivery of the assailed judgement had decreed ₹5,91,906/-. Nevertheless, the aforementioned figure was adjusted in accordance with the ruling dated August 9, 2023, issued by the learned Commercial Court in response to an application filed by the respondent under Section 152 of the Code of Civil Procedure, 1908 (henceforth referred to as the CPC). The appellant in this appeal also challenges the aforementioned order of 09.08.2023. 

The respondent claimed to have supplied the appellant with commodities (T-shirts) when it filed the aforementioned lawsuit [CS (COMM) 83/22] in an attempt to recover damages. The amounts due in accordance with the raised bills, however, were not entirely paid off. According to the claim, the main point of contention between the parties concerned the delivery of 2,500 T-shirts, which were paid for with an invoice dated June 30, 2018 (Ex. PW-1/2A), totaling ₹5,70,725/-. 

Along with the appellant’s ledger account from its books of accounts for the months of April 2018 through August 22, 2020, which showed the outstanding balance of ₹5,91,906/-, the respondent had also supplied this information. The respondent had proven that the appellant owed the respondent the sum shown, and the learned Commercial Court granted this claim, decreeing the amount shown. Furthermore, the skilled Commercial Court acknowledged that the claimant was qualified for pre-suit interest valued at ₹2,57,479/-, and as a result, it issued the contested ruling.  

 

LEGAL PROVISIONS: 

• Section 152 of the Code of Civil Procedure, 1908 At any point, the Court may make corrections on its own initiative or at the request of any party if there are clerical or mathematical errors in its rulings, decrees, or orders, or if there are errors resulting from any unintentional slippage or omission. 

 

ISSUES: 

• Whether respondent is entitled to the recovery of Rs.5,91,906/- towards balance amount for supply of goods to the appellant? 
• Whether respondent is entitled to interest claimed @ 18%per annum w.e.f. July, 2019 till the filing of the suit, amounting to Rs.2,57,479/- from the appellant? 

 

CONTENTIONS OF THE APPELLANT: 

The appellant’s counsel argued that the appellant questions its obligation to pay the sum that the respondent has claimed, and it challenges the contested judgement in multiple ways. Although there was no such claim in the plaint, the appellant argues that the impugned judgement was based on an incorrect assumption that the respondent had kept a running account. Additionally, the appellant asserts that the respondent’s supplied items were recalled due to defects.  

Considering this, the sum that the it was not payable to the respondent. Furthermore, according to the appellant, they the Commercial Court was incorrect to permit pre-suit interest at the 18% annual interest rate, given that the respondent was financially protected with respect to the Micro, Small, and Medium Enterprises Development Act, 2006, also known as the MSMED Act. Still, no such allegation was presented. Inside the complaint.  

It was also argued that a credit balance of ₹7,29,402/- was recorded in the ledger account (Ex.PW-1/6) as of June 5, 2018, according to the learned counsel representing the appellant, who had primarily challenged the impugned judgement. ₹5,70,725/-was debited from the ledger account for Bill No. CR1240 (Ex. PW-1/2A), resulting in ₹1,58,677/-being left as a credit balance. Since the invoice in question (Bill No. CR1240), which served as the foundation for the respondent’s claim, was paid in advance, the appellant’s skilled counsel argued honestly that this plainly demonstrated that the payments were made beforehand. 

 

CONTENTIONS OF THE RESPONDENT:  

The appellant’s counsel vehemently contended that it creates customised clothing in accordance with the specifications of its clients and operates an online apparel store under the name Poptailor Corporate Apparel. The accused runs a network of hotels in India and had placed orders for clothing to be supplied and transported to various parts of the nation.  

According to the defence, on June 30, 2018, the appellant made an order for the production and delivery of 2,500 T-shirts in different sizes, each specially tailored to meet the appellant’s needs. The products were to be delivered, and the total amount due for the aforementioned Purchase Order was ₹5,70,725/-. As an establishment under the MSMED Act, the respondent alleges that it had made it clear to the appellant that the items were not returnable once sold and that, following 45 days of the goods’ delivery, it would be entitled to interest at the rate of 18% annually.  

In addition, the respondent asserts that the appellant has paid different sums for a number of other successfully completed transactions; yet, the invoice dated June 30, 2018, regarding the 2,500 T-shirts, has not been paid. 

 

COURT’S ANALYSIS AND JUDGMENT: 

According to the court’s ruling, it is evident that the appellant got the products and did not return them to the respondent. Despite the fact that the appellant claims the entire lot was flawed based on an email dated 10.07.2018 (Ex.DW1/4), there is no correspondence in the public domain that suggests the lot as a whole was judged to be flawed. Admittedly, as previously said, the appellant had done nothing to return the disputed goods.  

The court also observed that the email dated July 10, 2018, can be easily read to show that the appellant had only mentioned 22 shirts. The appellant did not demand that the respondent return all of the goods it had delivered, according to the emails sent on July 9, 2018, and July 10, 2018. 

In favour of Comfia Ecom Private Ltd. versus Casa 2 Stays Pvt. Ltd., the High Court upheld a decree for ₹8,49,385/-with 18% interest per year from the date of the suit until the decretal amount was realised. 

The court then held that a bill for 2500 T-shirts of ₹5,70,725 that Casa 2 Stays Pvt. Ltd. failed to pay was the main source of contention in this case. Rejecting the appellant’s argument that the products were defective and returned, the court took ledger accounts and email exchanges into consideration. The appellant claimed it was unaware of the respondent’s right to pre-suit interest at the rate of 18% annually, according to the MSMED Act. However, the court determined that the respondent was in error3. 

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Judgment reviewed by Riddhi S Bhora 

Click to view judgment.