AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2017 (5) TMI 1721
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..... The plaintiff is dealing with manufacturing of high tech dental 2D and 3D digital imaging Equipments and software headquartered in S. Korea. Plaintiff is engaged in designing, manufacturing and marketing state-of-the-art digital imaging products for dental CBCT etc. The plaintiffs business has an international existence. Defendant No. 1 is Unicorn Denmart, a Company incorporated under the Company's Act, 1956, and is engaged in the business of providing goods and services in range of dental equipments and is based at New Delhi having its registered office in Delhi. Defendant No. 2, Mr. Shammi Gumbhir, is the Managing Director of defendant No. 1 and Defendant No. 3, Mrs. Achla Gumbhir, is Whole time Director of defendant No. 1. Defendant No. 2 is involved jointly with other defendants in the management of defendant No. 1 and they all are jointly and severally responsible for the conduct of defendant No. 1. They had entered into a business relationship in 2009. The plaintiff had exported dental devices to defendants to market and sell them in India. 3. It was agreed between them that the defendants shall pay 50% of the advance of the required devices/equipments and on the relea....
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...., 27th Nov. 2014, 2nd Dec. 2014, 3rd Dec. 2014, 12th Dec. 2014, 15th Dec. 2014, 16th Dec. 2014, 17th Dec. 2014, 22nd Dec. 2014, 29th Jan. 2015, 9th Feb. 2015, 26th Feb. 2015, 10th Mar. 2015 and the last email was sent on 20th March, 2015. It is further submitted that the defendants vide their email dated 13th December, 2014 have acknowledged their liability to pay but sought time for making payment. The plaintiff has relied on the averments of the email which reads as under:- "This has reference to your call yesterday. We are running short of cash flow because of yearend billing, so we are transferring your old payment shortly but as far as 50% of the new Order is concerned, it will be towards the end of the year only." 10. It is submitted that the defendant No. 2 had again vide email dated 9th February, 2015 communicated to the plaintiff that "We also want to settle this payment issue at the earliest", which confirms that the amount is still outstanding. It is submitted that these facts clearly show that the defendants despite admitting the outstanding payments and thereby acknowledging its liability did not pay. It is submitted that the defendants were pressurising the plainti....
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....the basis of the supply invoices, they used to release 50% of advance and the balance amount was to be released on the supply of the goods within 60 days from the date of the bill of lading. 13. It is however submitted that parties have decided to enter into a Distributorship Agreement and it was entered on 04.09.2009. However, it was entered into with one of the subsidiary/sister concern of the plaintiff, registered at Singapore viz. Vatech Asia HQ Pte. Ltd., on the request of plaintiff. Under the said Distributorship Agreement, as per Section 3.3(i), the defendants were required to make all efforts to promote and develop demands for the sale of the products. Under the Distributorship Agreement, the defendants were also required to maintain its sales and field engineering personnel. The Company also extended a warranty for replacing, repairing, or giving credit for any of the products, which was within the warranty period, and returned to the Company. Defendant No. 1, in pursuance of the said Agreement, started marketing the products of the plaintiff company in full earnestness and also appointed extra personnel and created huge demands for the products of the plaintiff and procu....
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....visions of Order 37 of CPC. Except the mails on which the plaintiff has relied, every other e-mail exchanged between the parties also need to be proved especially those e-mails which were exchanged between the period August 2014 till filing of the present suit. 16. It is further contended that the summons of judgment was not accompanied by the affidavit of the plaintiff, but was accompanied by the affidavit of the lawyer of the plaintiff. It is submitted that in terms of Order 37 Rule 3(4) CPC read with Appendix B Form No. 4A, the requirement of summons of judgment being accompanied by the affidavit of the plaintiff, is mandatory and no decree under Order 37 can be passed where summons of judgment is not supported by affidavit of plaintiff. Reliance is placed on the findings in the case Satish Kumar vs. Prism Cement Ltd., 107 (2003) DLT 36. It is further argued that an Advocate cannot act in a dual capacity, of an Attorney and of plaintiff and so the affidavit filed by the counsel for the plaintiff cannot be considered as having being filed by the plaintiff. Reliance is placed on Baker Oil Tools (India) Pvt. Ltd. vs. Baker Hughes Ltd. & Anr., 2011 (47) PTC 296 (Del.) and Columbia ....
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....rd of the agreed terms appointed dealers for sale of its products within India. On account of said breach the Plaintiff is liable to pay damages to Defendant No. 1; ii. Plaintiff further breached the agreed terms of the understanding between the parties and delayed or failed to supply spare parts, causing immense discomfort to the customers and also exposed Defendant No. 1 to unwarranted litigation; iii. the Plaintiff failed to sign a Service Agreement, which was required to protect the interests of the customers who have purchased products of the Plaintiff through Defendant No. 1. The said proposed Service Agreement was refused to be signed by the Plaintiff on an allegation of the same being far from international standards (g) Plaintiff is also guilty of inducement and causing losses to Defendant No. 1. Plaintiff induced Defendant No. 1 to develop market for the products of the Plaintiff by making entire investment on promise of giving exclusive right om import, marketing and sale of its products within the territory of India for a period of 15 years. Defendant No. 1 thus worked vigorously and made huge investments to develop market for the products of Plaintiff, and in fac....
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....sign the exclusive Distributorship Agreement with them to which the plaintiff is not agreeing. The Distributorship Agreement dated 04.09.2009 referred to by the defendants was even otherwise valid only for 2 years and not for 15 years. It is submitted that Appendix 'A' of the agreement (filed by the defendants) clearly states "Duration: 24 calendar months from the date of endorsement" and Article 2.03 of the said agreement also envisages that it was not an exclusive dealership agreement. It is submitted that the said clause states, "Selling Rights Reserved: Notwithstanding anything to the contrary stated herein in this agreement the company reserves the right to sell; either directly or through any of its branch, agent, or distributors any of Its product, within any territory, throughout the world." which clearly shows that under this Distributorship Agreement, defendant No. 1 was not appointed as an exclusive dealer in India. It is submitted that against a written agreement, no oral evidences are admissible and the oral contentions cannot change the terms and conditions of any written agreement. It is submitted that defendant Nos. 2 to 4 are all actively involved in the w....
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.... working for the said solicitor company. M/s. Remfry & Sagar had acted in a dual capacity of a client when he also gave the evidence on behalf of the respondent company on the factual matrix of the case. This Court relied on the Bombay High Court judgment in Oil and Natural Gas Commission vs. Offshore Enterprises Inc., AIR 1993 Bombay 213 wherein the issue of dual capacity was dealt. The defendants have relied on following extract of Oil & Natural Gas Commission (supra) reproduced as under:- "..... In this background, I formulated the following questions for consideration of this Court in this respect. (i) Whether an Advocate is entitled to act as Constituted Attorney of a party with authorisation to sing the pleadings and affidavits on behalf of the suitor as well as to act and plead for the party concerned in the same litigation; (ii) Whether the existing practice followed by firm of Advocates/Solicitors/Attorneys particularly in case of non-resident clients as aforesaid is in conformity with law and the recognised rules of professional ethics; 7. It is well settled law that the constituted attorney of a suitor has no right of audience in Court or to cross-examine witness....
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....identify himself with the donor of Power of Attorney and act in the same manner as the suitor-litigant is entitled to act. An Advocate is governed not merely by written provisions of the Advocates Act 1961 but also by traditions of the Bar built up for generation during the course of administration of justice for centuries. It is provided by Order III Rule 4 of the Code of Civil Procedure that a vakalatnama should be signed by the party or by his recognised agent in favour of the pleader. The question to be asked illustratively is as to whether the pleader acting in his capacity as constituted attorney of a litigant can sign such vakalatnama as a client in his own favour as an Advocate or in favour of the firm in which such constituted attorney himself is one of the partners. The answer is in negative. The question to be asked is as to whether the two roles can be combined? The question to be asked is as to whether it is not inherent in the scheme and the provisions of Code of Civil Procedure and implicit in the provisions contained in Order III Rule 4 of the Code of Civil Procedure and other connected provisions that advocate who acts or appears or pleads before the Court in a pro....
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.... 10. It is not sufficient that an Advocate acts impartially. It is also necessary that the Advocate must always appear to act impartially. The basic principle of acting impartially and mere representation of a client consistent with duty to opponent and Court keeping reasonable distance from arena of conflict would be jeopardised if the Advocate acts in professional and non-professional capacity both in the same matter and at the same time. Practices and procedures of the Court must serve the administration of justice and rule of law in keeping with its noble ideals, traditions and objectives. The Court are required to interpret various provisions of various Acts and rules in manner so as to avoid anomalies as far as possible. Shri Ajit P. Shah, the learned counsel for the Bar Council has invited attention of the Court to the fact that a constituted attorney is entitled to identify himself with the interest of his client and give instruction to the Advocate representing the client before the Court. It would be strange if the lawyer constituted attorney gives necessary instruction in the matter to himself or his copartners. Taking an overall view of all the relevant provisions poi....
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....ch of the submissions made by Shri Ajit P. Shah on behalf of the Bar Council of Maharashtra and Goa. I accept each of the submissions made on behalf of Bar Council. Practice prevailing in our Court in case of foreign or non-resident clients whereby the Advocates' firm acts in a professional capacity and one or two partners of the same firm obtain power of Attorney with authorisation to sign pleadings and affidavits etc. is opposed to law as aforesaid. It is not possible to put judicial imprimatur on such a practice. Even if no personal affidavits are filed by the Advocate concerned in pursuance of the power of Attorney, the Advocate cannot combine the two capacities and the two roles. 15. In view of above I therefore, answer the questions formulated by the Court at the commencement of hearing of this proceedings as under: (a) An Advocate is not entitled to act in a professional capacity as well as constituted attorney of a party in the same matter or cause. An Advocate cannot combine the two roles. If a firm of Advocates is appointed as Advocates by a Suitor, none of partners of the Advocates' firm can act as recognised agent in pursuance of a power of attorney concerni....
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.... Order 37 Rule 3 CPC. It reads as under:- "3. Procedure for the appearance of defendant.- (1) In a suit to which this Order applies, the plaintiff shall, together with the summons under rule 2, serve on the defendant a copy of the plaint and annexure thereto and the defendant may, at any time within ten days of such service, enter an appearance either in person or by pleader and, in either case, he shall file in court an address for service of notice on him. (2) Unless otherwise ordered, all summonses, notices and other judicial processes, required to be served on the defendant, shall be deemed to have been duly served on him if they are left at the address given by him for such service. (3) On the day of entering the appearance, notice of such appearance shall be given by the defendant to the plaintiff's pleader, or, if the plaintiff sues in person, to the plaintiff himself, either by notice delivered at or sent by a prepaid letter directed to the address of the plaintiff's pleader or of the plaintiff, as the case may be. (4) If the defendant enters an appearance, the plaintiff shall thereafter serve on the defendant a summons for judgment in Form No. 4A in Appendi....
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....he principles applicable to cases covered by order 17 C.P.C. in the form of the following propositions (at p. 253): (a) If the Defendant satisfies the Court that he has a good defence to the claim on its merits the plaintiff is not entitled to leave to sign judgment and the Defendant is entitled to unconditional leave to defend. (b) If the Defendant raises a triable issue indicating that he has a fair or bona fide or reasonable defence although not a positively good defence the plaintiff is not entitled to sign judgment and the Defendant is entitled to unconditional leave to defend. (c) If the Defendant discloses such facts as may be deemed sufficient to entitle him to defend, that is to say, although the affidavit does not positively and immediately make it clear that he has a defence, yet, shows such a state of facts as leads to the inference that at the trial of the action he may be able to establish a defence to the plaintiff's claim the Plaintiff is not entitled to judgment and the Defendant is entitled to leave to defend but in such a case the Court may in its discretion impose conditions as to the time or mode of trial but not as to payment into Court or furnishing....
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....he defendants cannot withheld the money to pressurise the plaintiff to enter into an exclusive Distributorship Agreement with the defendants. On examination of the relevant document, it is clear that the contentions and arguments of plaintiff find support from these documents. The alleged Distributorship Agreement (Article 2.03 & Appendix A) clearly envisages that it was not an exclusive Distributorship Agreement and was valid for 2 years only. The defendants have failed to place on record any other documents to show that the plaintiff or its sister concern had entered into an exclusive Distributorship Agreement with it. Defendants cannot withheld the money with the object of pressurising the plaintiff to enter into any agreement. Once it has, against invoices, released the advance money (50% of the value) and received the good without any demur or complaint, the defendants are liable to pay the balance due amount raised by plaintiff against commercial invoices. The invoices, as is clear from the document itself, are a valid contract between the parties. It contains offer, acceptance and the consideration of such agreement as defined in Section 2(h) of the Indian Contract Act, 1872....
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....nd even the suit is liable to be dismissed. It is argued that the plaintiff had failed to comply with provisions of Order 37 Rule 3(4) read with Appendix B Form No. 4A as summons of judgment is not supported by the affidavit of the plaintiff and a defective summons of judgment was served on defendants and defect cannot be cured and so suit be treated as normal suit and no decree can be passed under Order 37 CPC. 30. There is no dispute to the factual position in this case. The summons for judgment was not accompanied by the affidavit of the plaintiff. The procedure prescribed under Order 37 has to be followed. Order 37 Rule 3(4) CPC requires:- "....................., the plaintiff shall thereafter serve on the defendMAant a summons for judgment in Form No. 4A in Appendix B.........." 31. This provision requires that the summons for judgment shall be served in Form No. 4 A of Appendix B. Form No. 4A Appendix B is reproduced as under:- Upon reading the affidavit of the plaintiff the Court makes the following order, namely: Let all parties concerned attend the Court of Judge as the case may be on the .......day of......19......, at........O'clock in the forenoon on the he....
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....court was entertaining a serious doubt about the validity of the summons for judgment issued by it else if the trial court treated the subsequent filing of the affidavit a compliance of the provisions of Sub-rule 4 of Rule 3 of Order xxxvii of the Code, it would have then and there notified the defendant that the defendant will be deemed to have been served with the summons for judgment on that date and then he could be called upon to file a leave to defend application, if any, within ten days from the said date. However, nothing of the sort was done and the court kept on adjourning the matter for hearing and disposal of the application moved by the defendant. In the opinion of this Court learned trial court has erred in relying and acting upon the subsequent affidavit and treating the same as due compliance for issuing the summons for judgment and passing the decree. The defendant was not obliged to file a leave to defend application against an invalid and defective summons for judgment. Having regard to the entire background of the matter and the defect appearing in the summons for judgment, in all fairness the court ought to have exercised its jurisdiction and discretion in allo....