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14 May

Delhi High Court Affirms Commercial Court’s Order on Interest Rate in Commercial Dispute on Grounds of Authenticity

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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

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24 Nov

Land Dispute Resolved: Court Upholds BOR Decision, Emphasizes Legal Precedents and Rejects Petitioner’s Claims Under Article 227

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Title: Amar Chand S/o Moolchand and ORS. Vs State of Rajasthan and ORS.

Citation: S.B. Civil Writ Petition No. 9798/2016

Coram: HON’BLE MR. JUSTICE SAMEER JAIN

Decided on: 29/03/2023.

Introduction:

The current petition, filed under Article 227 of the Constitution of India, challenges the order dated 29.06.2016, issued by the Board of Revenue (BOR) Ajmer in Revision/6763/2011. This order favored the respondents in their revision petition. The case revolves around Mutation Entry No. 192 dated 20.04.2002, issued by the Gram Panchayat in Sandeda, Tehsil Peeplu, District Tonk

Facts:

The current legal matter involves a dispute over a piece of land measuring 29 Bigas 11 Biswa, claimed by both the petitioners and respondents. The petitioners argue that the land belonged to their ancestors, presenting evidence to support their claim. The legal proceedings include an appeal before the Sub Divisional Officer (SDO), Piplu, Tonk, which was initially allowed, leading to a remittance of the case to the Tehsildar for fresh consideration. Subsequent appeals and revisions followed, with the Board of Revenue ultimately reversing the earlier decisions in favor of the respondents. The petitioners assert that the Board of Revenue’s decision was based on incomplete consideration, highlighting applications they filed indicating the revision’s ineffectiveness due to the successful challenge of the Tehsildar’s order. They also point out the death of some non-applicants, leading to the abatement of the revision.

In response, the respondents argue that the Civil Court’s decision in Suit No. 60/2003 validated their status as legal successors and upheld the validity of mutation entries. They contend that the orders challenged in the revision become irrelevant in light of the Civil Court’s findings. The respondents emphasize the sub judice nature of the matter before the Board of Revenue, downplaying the significance of the Tehsildar’s order and the mutation entry for legal rights.

The court, in considering the case under Article 227 of the Constitution of India, emphasizes the limited scope of interference and the need for sparing use of this jurisdiction. The judgment underscores that such powers are not meant to convert the High Court into an appellate authority but to ensure the subordinate courts adhere to the law. The court refers to precedents, including the principle that orders below are presumed justified if passed after due consideration of facts and materials on record.

Judgement analysis:

In this judgment analysis, the court addresses a dispute over a piece of land by considering the facts and legal arguments presented. The court notes that the Civil Suit No. 60/2003 for declaration was decided against the petitioners by the Trial Court, with specific issues related to the legal successor of the deceased Veerumal and the validity of mutation entries. The Board of Revenue (BOR) took this into account and concluded that once the Trial Court had decided these issues, the matter before the BOR was adjudicated. The court rejects the petitioner’s argument that the Tehsildar’s denovo investigation and fresh order should be considered. It cites legal precedents, emphasizing that mutation entries do not determine land title and are fiscal in nature. The court agrees with the BOR’s reliance on the Civil Court’s decision in Suit No. 60/2003, which addressed title and succession issues concerning Veerumal, and dismisses the significance of any subsequent order by the Tehsildar.

The judgment underscores that the BOR’s decision was well-reasoned, in accordance with legal principles, and did not violate natural justice. The court supports the BOR’s conclusion and finds no grounds for interference under Article 227 of the Constitution of India. Consequently, the writ petition is dismissed as devoid of merits, and any pending applications are disposed of.

Written By: Gauri Joshi

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6 Nov

The Compensation Rate Has To Be Evaluated Fairly Considering The Nature Of The Land, If Land Is Taken Under NHAI Act: High Court Of Allahabad

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Title: Chandra Kishori v Union Of India

Citation: Appeal Under Section 37 Of Arbitration And Conciliation Act 1996 No. – 55 And 56 Of 2022

Coram: Hon’ble Jaspreet Singh,J.

Decided On: 16.10.2023

Introduction:

Here both the appeals involve a common question of law and fact, hence both the appeals have been heard together and are being decided by this common judgment. For the sake of convenience, the Court referred to the facts as they emerge from Appeal No. 55 of 2022, however, the relevant facts relating to the other appeal was also considered at the appropriate place.

Facts:

The appellant, of the two appeals, are the land owners, whose land was acquired under the National Highway Authority of India Act, 1956 under Sections 3 A & 3 D of the NHAI Act, 1956. The land of appellants of both the appeals were made the subject matter of notification issued under Section 3-A of the NHAI Act, 1956 dated 28.05.2012 and notification under Section 3-D was made on 15.3.2013 for widening of Lucknow-Sultanpur Highway from km. 35.670 to 64.100. The competent authority passed its award in terms of Section 3-G of the NHAI Act, 1956 and awarded a sum of Rs. 6,98,923 to Chandra Kishori vide award dated 11.7.2016 and a sum of Rs. 6,18,051/- to Om Prakash vide award dated 31.07.2015.

Being aggrieved both Chandra Kishori and Om Prakash escalated the matter by invoking the provisions of Section 3-G (5) and (6) and referred the matter for arbitration. The Arbitrator in terms of his award dated 19.9.2019 passed in Case No. 1689 of 2017 relating to Chandra Kishori and in Case No. 1690 of 2017 relating to Om Prakash did not find favour with the contentions of the appellant, of the two appeals, for enhancement of compensation and consequently, rejected their claim.

The award passed was further challenged by filing a petition under Section 34 of the Arbitration & Conciliation Act, 1996 before the District Judge, Barabanki. Both the petitions under Section 34 of the Act of 1996 relating to both the appellant in the respective appeals, was rejected by the Additional District Judge.

The counsel for appellants in the two appeals has primarily raised two points for consideration. It is submitted that in the case of both the appellants the land in question had already been declared as non-agricultural in terms of Section 143 of the U.P. Zamindari Abolition and Land Reforms Act, 1950, however, the competent authority had given the compensation treating it to be agricultural land. It is urged that once the land was declared as non-agricultural, the appellants were entitled to get compensation on the rates as applicable to non-agricultural land.

learned counsel appearing for National Highway Authority of India through video conferencing has submitted that mere change in the land use from agricultural to non-agricultural is not going to confer any benefit to the appellants inasmuch as on the date of acquisition the nature of the land as it stood on the revenue records, has to be seen. It is further submitted that even though the appellants may have got the land declared for non-agricultural purposes yet there was no material on record to suggest that any non-agricultural activities were being done.

Court’s Analysis and Judgement:

In the present case the court decided that the Arbitrator committed an error in failing to consider this aspect of the matter relating to the nature and status of land on the date of notification including ignoring the order passed by the SDM under Section 143 of the U.P. Zamindari Abolition and Land Reforms Act, 1950, and it was the duty of the Arbitrator to have noticed the provisions and the manner in which the compensation is to be computed so that the land which has been taken away of the appellants, and they are directed to be appropriately compensated as per the provisions of law.

It was further found out that the Additional District Judge while considering the petition under Section 34 of the Arbitration & Conciliation Act, 1996 also erred in holding that it does not have the power to interfere with the award which requires re-calculation as it is apparent that the Additional District Judge did not apply the settled legal principles applicable and defining the realm of jurisdiction, the Court exercises, while adjudicating a petition under Section 34 of the Act of 1996.

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Written by: Sushant Kumar Sharma

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