TaxTMI 
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2019 (3) TMI 2018
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....#39;ble Court may deem fit and proper under the facts and circumstances of the case may also be granted." 2. I.A. No. 14036/2017 has been filed by the plaintiff under Order XII Rule 6, Code of Civil Procedure, 1908 (hereinafter referred to as 'CPC') for judgment on admission and I.A. No. 14064/2017 has also been filed by the plaintiff under Order XIII-A of the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015 (hereinafter referred to as 'Commercial Courts Act, 2015') for summary judgment. FACTS 3. Initially the plaintiff and defendants had entered into an agreement dated 18th September, 2012 (hereinafter referred to as 'First Agreement') under which the plaintiff had to supply a total number of 630 'Modular Kitchens' to the defendants, for installation in the defendants' Projects at-Gurgaon under the names "The Edge Towers, The Atrium, The View (Ramprastha City)". 4. As per the First Agreement, the defendants had to construct the apartments by 31st December, 2012 and the plaintiff was required to install a minimum order of 630 'Modular Kitchens' by 31st December, 2013. The relevant porti....
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....aon project, and (c) a sum of Rs. 42,40,750/- to VM as price escalation of 73 kitchens as per Clause 2 & Schedule II of this Agreement, and (d) therefore the balance remaining with VM is Rs. 29,06,125/- which shall be retained by VM as an interest free security deposit which may be adjusted towards the monies owed by RPC to VM at any point in time. The aforesaid security deposit of Rs. 29,06,125/- if not adjusted by VM shall be refunded to RPC at the time of completion of installation of the 133 kitchens or at final settlement of accounts between RPC & VM whichever is later. (emphasis supplied) 7. In accordance with the Second Agreement, the defendants had to make all apartments ready and available to the plaintiff for installation of 'Modular Kitchens' by 15th February, 2015. However, the defendants once again, failed to do so. 8. On 28th May, 2015, the plaintiff filed the present suit for recovery of Rs. 2,18,58,875/- (Rupees Two Crores Eighteen Lacs Eight Hundred Seventy Five Only) along with interest @ 18% per annum from 15th February, 2015 till its realization. 9. On 24th March, 2017 the plaintiff filed an application for disposal of the Modular Kitchens which....
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.... respondent has placed before us a copy of an advertisement dated 26th August, 2017 published in the English edition of the Indian Express as well as the Hindi newspaper, Jansatta, proposing the auction of the goods on 31st August, 2017. We are informed that four parties have approached the respondents towards purchase of the goods. Mr. Ganju submits that the respondent has no objection if the appellant wishes to participate in the bidding as well. 6. It is submitted by Mr. Dwivedi (counsel for the defendant) that so far as the proposal of the respondent to sell the goods by a public auction is concerned, the appellant would have no objection. xxx ........ 7. The submission on behalf of the appellant is that upon the working of the above clause, the appellant may be found entitled to amounts from the respondent. It is further submitted that the working of the clause may get prejudiced if the respondent was permitted to appropriate the proceeds of the sale absolutely without any reservation. 8. It appears to us that the disputes between the parties are capable of resolution by recourse to mediation. We are informed by Mr. Shivendra Dwivedi, learned counsel for the appellant an....
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....ent, time was the essence of the contract and the parties had to adhere to the same. He emphasized that in the present suit it was an admitted fact that the defendants had failed to comply with the deadline of 15th February, 2015 mentioned in the Second Agreement. 18. Learned counsel for the plaintiff contended that Clause 5 of the Second Agreement stipulated that if the defendants did not make the apartments ready for installation of the Modular Kitchens by 15th February, 2015, the defendants would pay to the plaintiff a total sum of Rs. 2,47,65,000/- (Rupees Two Crores Forty Seven Lacs Sixty Five Thousand Only) minus (a) the price of the kitchens already installed; and (b) the unadjusted portion of security deposit etc. 19. He further stated that the defendants had never refused to pay the price agreed under the Second Agreement as would be apparent from its Clause 3. Clause 3 of the Second Agreement is reproduced hereinbelow:- "3. That a total of 133 modular kitchens being 46 'Modern Kitchens & 87 'Classic' Kitchens have been booked by the customers of RPC with VM through RPC. The customers of RPC shall pay to VM in accordance with Clause 11 hereunder, the price ....
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....plaintiff submitted that if the plaintiff were allowed to claim the stipulated amount of Rs. 2,47,65,000/- (Rupees Two Crores Forty Seven Lacs Sixty Five Thousand Only) without performing the reciprocal obligation of supplying the kitchens, it would amount to re-writing the agreement which was impermissible. Clause 5 of the Second Agreement is reproduced hereinbelow:- "5. That VM shall be liable to install kitchens in the apartments of RPC customers upto a maximum period of 90 days from the date of signing of this Agreement. Notwithstanding anything contained in this Agreement, in the event RPC does not ready all the apartments for installation of modular kitchens by 15th February 2015, then RPC shall pay to VM forthwith a total sum of Rs. 2,47,65,000/- minus: (a) the price of the kitchens already installed or under installation by VM and (b) minus the unadjusted portion of the security deposit of Rs. 29,06,125/- with VM under Clause 1(d) hereinabove. The relevant calculation of the aforesaid amount of Rs. 2,47,65,000/- for 133 modular kitchens is given in Schedule I attached hereto and forming part of this Agreement. Upon complete payment in accordance with this clause by RPC, V....
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....d result in double recovery of amount for the plaintiff. As a matter of illustration, he stated that if the selling price of the kitchen is Rs. 100/- and the cost of importing these kitchens was Rs. 60/-, the plaintiff if able to prove that it had incurred the cost of importing the kitchens would be able to recover the entire selling price that is Rs. 100/- for it to make the contractual profit of Rs. 40/-. However, if the plaintiff were to be unable to show that it had incurred the cost of importing these kitchens/cost of raw material, it would only be entitled to claim the profit element of Rs. 40/-. He stated that awarding Rs. 100/- to the plaintiff would result in placing it in a better position than if the contract had been performed. 28. In view of the aforesaid illustration, learned counsel for the defendants stated that in the present case that the plaintiff had to prove that it had incurred the cost for the kitchens. 29. Learned counsel for the defendants submitted that under Section 74 of the Indian Contract Act, 1872, a claim for liquidated damages cannot be adjudicated in a summary manner. In support of his submission, he relied on Kailash Nath Associates vs. Delhi De....
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.... the party to obtain a speedy judgment at least to the extent of the relief to which according to the admission of the defendant, the plaintiff is entitled". We should not unduly narrow down the meaning of this Rule as the object is to enable a party to obtain speedy judgment. Where the other party has made a plain admission entitling the former to succeed, it should apply and also wherever there is a clear admission of facts in the face of which it is impossible for the party making such admission to succeed." (emphasis supplied) 35. The Supreme Court in Karam Kapahi & Ors. vs. Lal Chand Public Charitable Trust & Anr., (2010) 4 SCC 753 has held that the principle behind Order XII Rule 6 is to give the plaintiff a right to speedy judgment. Under this Rule either party may get rid of so much of the rival claims about 'which there is no controversy'. The relevant portion of the said judgment is reproduced hereinbelow:- 37. The principles behind Order 12 Rule 6 are to give the plaintiff a right to speedy judgment. Under this Rule either party may get rid of so much of the rival claims about "which there is no controversy" (see the dictum of Lord Jessel, the Master of Roll....
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....denial of the plaintiff's claim. The defendants have not filed any document to deny the claim of the plaintiff. f. The defendants have not pleaded or made out a case of frustration and/or for the agreement to be declared void on account of being an agreement to do an impossible act under Section 56 of the Indian Contract Act, 1872. g. Defences regarding environmental issues, shortage of material as well as labour pre-date the Second Agreement and therefore cannot be put forward as a defence to its non-performance, besides being vague and bald pleas without any supporting document. Further, even if these factual assertions are accepted, there is no force majeure clause in the contract between the parties which would entitle the defendants in law to take any of these defences with regard to delay in the completion of their Construction Project. 38. Consequently, the breach of the contract by the defendants and the loss of Rs. 2,47,65,000/- (Rupees Two Crores Forty Seven Lacs Sixty Five Thousand Only) caused to the plaintiff are admitted facts. SALE IN A PUBLIC AUCTION DOES NOT RENDER THE PERFORMANCE OF CLAUSE 5 OF THE SECOND AGREEMENT IMPOSSIBLE AS THE DEFENDANTS ELECTED TO....
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....Fateh Chand vs. Balkishan Das, AIR 1963 SC 1405. In fact, in Kailash Nath (supra), it has been held as under:- "43. On a conspectus of the above authorities, the law on compensation for breach of contract under Section 74 can be stated to be as follows: xxx xxx xxx 43.6. The expression "whether or not actual damage or loss is proved to have been caused thereby" means that where it is possible to prove actual damage or loss, such proof is not dispensed with. It is only in cases where damage or loss is difficult or impossible to prove that the liquidated amount named in the contract, if a genuine pre-estimate of damage or loss, can be awarded." 43. In the opinion of this Court, all the four cases have to be read harmoniously and having done so, it simply means that Section 74 cannot be used as an opportunity to get a windfall gain, when no loss has been caused. 44. Further, none of these four judgments are in the context of summary judgment under Order XII Rule 6 and Order XIII-A CPC, as amended by the Commercial Courts Act, 2015. 45. In the present case, the determination of precise quantum of loss is difficult and that is why there is a clause for a reasonable pre-estimate....
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....7. Since the defendants have admitted the execution of the aforesaid agreements, they have also admitted the cost price of the kitchens. It is pertinent to mention that the defendants themselves had paid Rs. 2,53,125/- to the plaintiff for a sample kitchen installed by it. The said fact has been recorded in Clause 1(b) of the Second Agreement executed between the parties. 48. Consequently, as the plaintiff in the present suit is only seeking recovery of admitted costs of 2012 of the Modular Kitchens without any element of profit and/or penalty or damages, this Court is of the view that there is no triable issue which arises for consideration, the defences raised by the defendants are moonshine and sham and there is no compelling reason why the claim should not be disposed of before recording of oral evidence. Accordingly, the plaintiff is entitled to a summary judgment without a trial. RELIEF 49. In view of the above findings, the present applications are allowed and the plaintiff is held entitled to:- A) Rs. 2,47,65,000/- (Rupees Two Crores Forty Seven Lacs Sixty Five Thousand Only) as per Clause 5, minus the amounts which have already been received by it as per details given....