CENTURY PULP AND PAPER Vs. SHIV GANGA PAPER

JUDGEMENT

(1.) The learned Senior Counsel appearing for the plaintiffs states that he will file an amended memo of parties giving the name of plaintiff No. 1 as M/s Century Textiles and Industries Limited. The Registry will take the amended memo of parties on record.

(2.) This is a suit for recovery of Rs 1,90,07,000/-. Plaintiff No. 1 is a leading manufacturer of Paper and Pulp, whereas plaintiff No. 2 is one of its authorized dealers. Under an arrangement between the plaintiffs, plaintiff No. 1 used to execute the sale orders negotiated by plaintiff No. 2, by delivering the same to the purchaser, identified by plaintiff No. 2. The sale consideration used to be paid by the purchaser to either of the plaintiffs. The case of the plaintiffs is that in April, 2004, defendant No. 4 (whose name has since been deleted from the array of defendants) Shri Prashant Jhunjhunwala negotiated the Paper Rate and Supply Terms Agreement, on behalf of defendant No. 1 Shiv Ganga Paper Converters P. Ltd. for the year 2005-2006 at Delhi. The agreement envisaged lifting of a minimum quantity of 4000 MT +/- 5% bagasse & wood based paper during the period 01.04.2005 to 31.03.2006. The agreement stipulated a special discount called "Shiv Ganga Discount/Contractual Discount" of Rs 750/- per MT, which was reversible in the event of either non-liftment of the contracted quantity of 4000 MT +/-5% or breach of contract by any means. The amount of the invoice was to be paid within 30 days and overdue payments attracted interest at the rate of 18% per annum from 31st day, till payment. The supplies were effected to defendant No. 1-company in terms of the above-mentioned agreement. A separate account was maintained with respect to the supplies made to the defendant-company and the payment received from it. The plaintiffs were receiving payments without delay until November-December, 2005. However, difficulties surfaced thereafter since the first week of January, 2006 when the defendant represented to the plaintiffs that payment of Rs 12,57,636/- was sent by them to Kota branch of Corporation bank, whereas only one cheque of Rs 5,70,722/- was deposited by it. Last supply of the paper was made to the defendant-company vide invoice dated 22st January, 2006. At that time, the amount outstanding against the defendant-company was Rs 2,88,77,705/-. This amount represented the supplies made to the units of company to four separate units of defendant-company. Realizing the liquidity crunch faced by it, the defendant-company desired the plaintiffs to take back the material lying at their various establishments. The plaintiffs in terms of the authorization from the defendant-company lifted 101.034 MT of the paper form Daman Unit on 02nd February, 2006 and 64.363 MT of paper from Rudrapur Unit on 08th February, 2006, valued in aggregate at Rs 58,26,428/-.

(3.) The defendant-company made payments of Rs 20 lakh, Rs 10 lakh vide cheque dated 31.01.2006 and another Rs 10 lakh vide cheque dated 02.02.2006 against the supplies of Rs 2,88,77,705/- made up to 22nd January, 2006. Goods worth Rs 68,69,018/- were also seized from the premises of the defendant-company pursuant to an order dated 08th February, 2006 passed by the Court on the complaint of plaintiffs. After giving credit for the payments, Rs 58,26,428/- for the material lifted from Rudrapur and Daman Units and Rs 68,69,018/- for the material received in proceedings initiated before Chief Judicial Magistrate, Daman, a sum of Rs 1,41,82,259/- is stated to be due to the plaintiffs from the defendant-company towards unpaid price of goods supplied to it. Since the defendant-company committed breach of clause 3.5 of the agreement by not lifting contracted quantity of 4000 MT and also failed to make payment in terms of the contract between the parties, the discount of Rs 750 per MT tones, which had already been passed on to the defendant in the invoices, was reversed by the plaintiff. The amount of discount reversed in the account of defendant-company comes to Rs 18,71,738/-. The plaintiff also claims to have incurred expenditure of Rs 13,74,697/- in defending various legal proceedings filed by the defendants against it in Courts at Daman. The total amount claimed by the plaintiff from the defendant-company thus comes to Rs 1,90,06,609.00/- (rounded off to Rs 1,90,07,000/-), which includes Rs 15,77,915 towards interest at the rate of 18% per annum.