Intergrated Workplace Solutions vs. Shri. Abhilash Menon
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The appellants, Integrated Workplace Solutions and its Managing Partner Archie Abraham, are appealing a Commercial Court judgment that ordered them to pay Rs. 13,75,136/- to the respondent, Abhilash Menon, proprietor of Tucson Ventures. The respondent, an interior design and furnishing provider, alleged that the appellants engaged his services for three projects (Call Hub, Red Seer, Licious) between July 2021 and June 2022. Despite supplying materials and services as per 19 purchase orders and agreed payment terms (50% advance, 40% on delivery, 10% post-handover), the appellants defaulted on payments. The respondent claimed a total of Rs. 63,83,934/- was invoiced, with Rs. 50,08,798/- paid, leaving a balance of Rs. 13,75,136/-, plus interest. The appellants denied the claim, alleging sub-standard materials, delayed deliveries, and excess payments made by them, leading to storage costs for rejected materials.
Held
The High Court dismissed the appeal, finding no merit in the appellants' contentions. The Court observed that while the appellants raised defences regarding sub-standard materials and delayed work, their own evidence (Ex.D1 to Ex.D7) failed to substantiate these claims. Crucially, the Court noted that the appellants did not produce any documents to prove they had informed the respondent in writing about taking back rejected materials or issuing notices. Furthermore, DW.1 (a defence witness) admitted the total amount raised by the plaintiff was Rs. 63,83,934/-, that Rs. 50,08,798/- had been paid, and a balance of Rs. 13,75,136/- remained payable. The Court found the appellants' pleadings and evidence inconsistent and concluded that the respondent had proven their case with cogent evidence. Therefore, there were no grounds to interfere with the Commercial Court's judgment.
Key Issues
1. Whether the Commercial Court erred in decreeing the suit for recovery of Rs. 13,75,136/- in favour of the respondent/plaintiff, despite the appellants/defendants' defence of sub-standard materials, delayed deliveries, and excess payments made by them? Appellants' Arguments: The appellants contended that the Commercial Court failed to consider their defence that the respondent supplied sub-standard goods and delayed deliveries, causing them losses and forcing them to make alternative arrangements. They argued that for the Licious project, materials worth Rs. 8,85,312/- were rejected, and after adjustments, they had overpaid by Rs. 3,52,011.25/-. They also claimed Rs. 3,50,000/- in warehouse rent for storing rejected materials, which the respondent failed to collect. The appellants asserted that the respondent's total claim of Rs. 63,83,934/- was unsubstantiated, with the actual value of work and materials being Rs. 46,56,786.75/-, and that the Commercial Court wrongly relied on evidence that did not prove the quality and quantum of materials supplied. Respondent's Arguments: The respondent argued that the Commercial Court rightly decreed the suit, and the appeal should be dismissed. The judgment does not explicitly detail the respondent's arguments beyond this general opposition.
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Cause title — parties, addresses and appearances
JUDGMENT AND DECREE PASSED IN COM.O.S.NO.791/2023, DATED 26-03-2024 ON THE FILE OF LXXXIV ADDITIONAL CITY CIVIL AND SESSIONS JUDGE(CCH-85) AT BENGALURU CITY AND ETC.
THIS APPEAL HAVING BEEN HEARD AND RESERVED FOR JUDGMENT ON 26.06.2025 AND COMING ON FOR PRONOUNCEMENT OF JUDGMENT, THIS DAY, DR. K.MANMADHA RAO, J., PRONOUNCED THE FOLLOWING: CORAM: HON'BLE MRS. JUSTICE ANU SIVARAMAN and HON'BLE DR. JUSTICE K.MANMADHA RAO
3 CAV JUDGMENT (PER: HON'BLE DR. JUSTICE K.MANMADHA RAO)
The present Commercial Appeal No.230/2024 is filed by the Appellants/Defendants challenging the judgment and decree dated 26.03.2024 passed in Com.O.S.No.791/2023, by the LXXXVI Addl. City Civil and Sessions Judge, (Commercial Court) Bengaluru (hereinafter referred to as ‘the Commercial Court’).
For convenience of reference, the parties are hereinafter referred to as arrayed before the Commercial Court in Com.O.S.No.791/2023. The appellants herein are the defendants and the respondent herein is the plaintiff in Com.O.S.No.791/2023, before the Commercial Court.
The respondent/plaintiff filed the Commercial Original Suit against the appellants/defendants seeking for recovery of money of sum of Rs.13,75,136/- on the file of LXXXVI Addl. City Civil and Sessions Judge, (Commercial Court) Bengaluru.
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The plaintiff-Abhilash Menon, is an entrepreneur and sole proprietor running and operating his business under the name and style of ‘Tucson Ventures’, is engaged in providing end-to-end interior designing solutions, including manufacture and distribution of furniture, furnishings, and décor. It is averred that the defendant No.1 is a partnership firm engaged in architectural and interior design services and defendant No.2 is its Managing Partner who is responsible for day-to-day operations. The defendant No.1 approached the plaintiff in or around July 2021, through defendant No.2, seeking manufacturing services for three projects, namely Call Hub, Red Seer, and Licious for which defendant No.1 was handling the design requirements and procurement of furnishing and décor for the defendant No.1’s client.
Defendant No.1 is stated to have issued 19 purchase orders for supply of various materials and installation services, between 28.07.2021 to 14.06.2022,. The parties had agreed that 50% of the consignment value/purchase order value would be paid in advance, 40% upon material delivery, and the remaining 10% after project
5 handover. The plaintiff contends that all materials were supplied in accordance with the specifications and timelines stipulated by the Defendants, and were duly acknowledged and certified by their representatives, without any demur or protest. It is further submitted that the defendants had undertaken to pay applicable GST based on invoices, and a running account was maintained by the plaintiff in respect of the invoices raised and amounts paid by the defendant No.1. 6. It is the specific case of the plaintiff that despite the completion of delivery and services as per agreed terms, the defendants consistently defaulted in making timely payments. In respect of the Licious project, defendant No.2 is stated to have communicated financial constraints and dissatisfaction of their end client, seeking a discount, which the plaintiff, in good faith and to preserve commercial relations, agreed to by waiving off a pro forma invoice amounting to Rs.1,64,374/- only to maintain cordial relationship and only with the hope that the defendants would clear all other dues owed to the plaintiff. The plaintiff submits that despite several reminders and correspondence, the
6 defendants failed to discharge the admitted dues, nor did they dispute the same. It is further alleged that the defendant No.1 failed to remit the GST amounts due on the plaintiff’s invoices, though legally obligated to do so. The plaintiff also states that in November 2022, while proposing to engage the plaintiff in a new project (“Jupiter”), the defendants made a part payment towards the previous dues, which according to the plaintiff, was a tacit admission of the liability and satisfaction with the performance of the plaintiff.
It is the grievance of the plaintiff that a total sum of Rs.63,83,934/- was raised through invoices, of which only Rs.50,08,798/- was received from the defendants, leaving a balance principal sum of Rs.13,75,136/- payable. The plaintiff submits that such payments were erratic and made only upon repeated follow-ups. The plaintiff, being entitled to interest at the rate of 18% per annum on the delayed payments, claims Rs.2,59,731/- towards accrued interest as on the date of filing of the suit, and accordingly prays for a decree against the defendants, jointly and severally, for a sum of
7 Rs.16,34,867/- along with future interest at the rate of 18% per annum till its full realization.
The defendant filed written statement before the Commercial Court while denying the allegations made in the plaint. The defendants, engaged in architectural and interior design services, contended that the plaintiff was engaged upon their request to supply specific materials based on mutually agreed purchase orders. The payment terms were: 50% advance, 40% upon delivery, and 10% after project completion subject to satisfaction. The defendants alleged that although the plaintiff initially supplied high quality materials, he subsequently delivered sub-standard goods and failed to adhere to delivery schedules, affecting project timelines and quality. The defendants, after repeatedly cautioning the plaintiff about the delayed and defective supplies, were compelled to make alternative arrangements to complete their commitments. In respect of the “Licious Project,” the plaintiff raised invoices totalling Rs.39,20,143.36/-, but the defendants rejected materials worth Rs.8,85,312/- as unfit for use. After adjusting for the
8 rejected materials, the defendants ought to have paid a sum of Rs.26,93,648.75/-, but they had paid Rs.30,45,660/-, resulting in an excess payment of Rs.3,52,011.25/-.
Despite multiple requests, the plaintiff failed to collect the rejected materials. As a result, the defendants stored them from June 2022 till January 2023, incurring monthly rent of Rs.50,000/- per month, which amounts to Rs.3,50,000/-. The defendants have issued legal notice dated 15.12.2022 to the plaintiff seeking repayment of an excess amount along with rent. The plaintiff, in reply dated 27.12.2022, gave a vague response and exhibited disinterest in retrieving the rejected materials. Consequently, the defendants sold the rejected materials in February 2023 for a sum of Rs.6,50,000/-, which was adjusted towards the due amount to the defendants from the plaintiff. The plaintiff remained liable for the rent between December 2022 and January 2023. The defendants also claimed that the plaintiff deliberately delayed supply and delivered substandard goods to cause loss to them and unjustly enrich himself.
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The defendants alleged that the plaintiff falsely claimed to have raised invoices worth Rs.63,83,934/- across three projects, whereas the actual value of work done and material supplied by the plaintiff in all the projects was only Rs.46,56,786.75/-. In spite of the same, the plaintiff received Rs.50,08,798/-, from the defendants resulting in an excess payment of Rs.3,52,011.25/-, in which the plaintiff agreed to refund but failed to do so. A legal notice was issued on 15.12.2022 by the defendants through their counsel for repayment of Rs.6,52,011.25/-, which included the excess amount and rental charges. The plaintiff, instead of repaying, issued a vague reply and filed the present suit based on fabricated invoices. The defendants denied having agreed to pay any interest on delayed payments and contended that the rate of interest claimed by the plaintiff was exorbitant and contrary to law. They traversed and denied all relevant averments in the plaint and sought strict proof.
The defendants specifically denied various assertions in the plaint, including claims of plaintiff’s reputation, the scope of work, quality of materials, timely
10 delivery, and existence of running accounts. They asserted that it was the plaintiff who approached them for business, that materials worth Rs.8,85,312/- were rejected and that payments were made in excess. They denied having received any GST invoices, and refuted any correspondence confirming dues. They also denied that the defendant No.2 managed day-to-day operations exclusively. They stated that the discount of Rs.1,64,374/- was given by the plaintiff towards damages and not as a goodwill gesture. The defendants emphasized that legal notices were properly issued and justified, and that mediation attempts failed due to the plaintiff’s conduct. Ultimately, they argued that the plaintiff filed the present suit to escape his own liabilities and unjustly enrich himself. The defendants accordingly sought dismissal of the suit.
Based on the above pleadings, the Commercial Court has framed the following issues:
Whether the plaintiff proves that the defendant No.1 placed 19 purchase orders between 28.07.2021 to 14.06.2022 for supply of materials and installation services and he
11 delivered the materials to the defendant No.1, he has agreed for the terms and conditions, as pleaded?
Whether the defendants prove that the plaintiff has supplied the sub standard materials and they are unable to complete the project on time?
Whether the defendants prove that they have rejected the materials worth of Rs.8,85,312/- supplied by the plaintiff with regard to Licious Project and they have paid Rs.30,45,660/- in excess?
Whether the defendants further prove that the plaintiff was in due to a sum of Rs.6,52,011.25 to them as on the date of the legal notice dated 15.12.2022?
Whether the plaintiff is entitled for the reliefs sought?
What order or decree?
The operative portion of the said judgment is as follows:
Suit of the plaintiff is decreed in part with cost. The plaintiff is entitled for Rs.16,34,867/- from the defendants.
12 The plaintiff is also entitled for future interest at the rate of 6% p.a. till realization of the decreetal amount. Draw decree accordingly. Issue copy of the judgment to the parties through email as provided U/Or. XX Rule 1 of CPC if email ID is furnished.
Assailing the above decree and judgment dated 26.03.2024 passed in Com.O.S.No.791/2023, on the file of the Commercial Court, the present Commercial Appeal came to be filed.
Heard learned counsel appearing for the appellants and learned counsel appearing for the respondent.
The learned counsel appearing for the appellant would contend that the judgment and decree passed by the Commercial Court in decreeing the suit in favour of the plaintiff is contrary to law, facts, and the evidence on record. The plaintiff failed to supply quality materials and ensure timely delivery, which adversely affected the defendants' ability to complete their project on schedule and maintain
13 promised quality standards. Despite repeated objections and notices by the defendants regarding the sub-standard and delayed supply of materials, the Commercial Court ignored these vital contentions and decreed the suit mechanically. Specifically, in so far as the “Licious Project” is concerned, the plaintiff raised invoices amounting to Rs.39,20,143.36/-, out of which materials worth Rs.8,85,312/- were rejected by the defendants due to quality issues. After adjustment, the liability stood at Rs.26,93,648.75/-, but the defendants had already paid Rs.30,45,000/-, resulting in an excess payment of Rs.3,52,011.25/-, which the plaintiff failed to refund the same. The same was also disregarded by the Commercial Court.
Further, it is contended that the plaintiff did not retrieve the rejected materials, which forced the defendants to store them by paying warehouse rent of Rs.50,000/- per month from June 2022 to January 2023, amounting to Rs.3,50,000/-. Although the defendants issued a legal notice dated 15.12.2022, the plaintiff provided a vague reply and did not take any steps to collect the rejected materials. The
14 Commercial Court ignored these significant facts. In addition, the plaintiff's claim of Rs.63,83,934/- was not substantiated with valid invoices. As against this, the actual value of the materials supplied by the plaintiff in all projects was only Rs.46,56,786. 75. The plaintiff failed to discharge the burden of proving the suit claim, and the Commercial Court erred in relying on Exhibits P-16 to P-26 for receiving the materials despite the fact that materials received were of sub-standard quality. In such circumstances, in the absence of proof regarding quality and quantum of materials, the decree based on plaintiff’s claim is untenable.
It is also contended that the Commercial Court further committed an error in relying upon the evidence of PW-1 and Exhibits P-1 to P-46, as well as the vague admissions made by DW-1, which lacked specificity and could not be construed as proof of the plaintiff’s case. The pleadings and evidence taken as a whole do not establish the entitlement of the plaintiff to the suit amount. The entire claim was flawed by contradictions and discrepancies in figures, and the plaintiff did not adduce any concrete proof to
15 substantiate the demand. The absence of a written agreement for supply of materials and the insufficiency of invoices and purchase orders in proving the quality of goods further rendered the reasoning of the Commercial Court is unsustainable. Hence, the impugned judgment and decree are liable to be set aside, and the suit ought to have been dismissed.
Per contra, learned counsel for the respondent while denying the allegations made by the learned counsel for the appellant has argued that the Commercial Court has rightly concluded and decreed the suit and opposed for allowing the appeal and prayed to dismiss the same.
Perused the material on record and considered the arguments addressed by the learned counsel on both sides.
On a perusal of the material on record, it is observed that, as per the defence raised by the defendants/appellants that the respondent/plaintiff has not supplied the materials as agreed and the materials were sub- standard, even the plaintiff has not completed the work in time. Since the plaintiff has not completed the work in time,
16 the defendants/appellants were forced to purchase the material from other vendor and it caused loss to them, even the plaintiff has not taken out the rejected materials, they kept in ware house and the defendants were forced to pay the monthly rent for preserving the rejected material. While considering the evidence of P.W.1, D.W.1 and D.W.2 as well as the documents produced on behalf of the parties, it appears that there were business transactions between both plaintiff and defendants.
After perusing the documents produced as Ex.P2 to Ex.P14 on behalf of the respondent/plaintiff which are the purchase orders on various dates which are issued by the Respondent No.1 and further, Ex.P2 to Ex.P16 are the copies of the bills and the same were admitted by PW.1 during his cross-examination and further, observing Ex.P27 to Ex.P38, which are the copies of the invoices raised by the plaintiff on different dates. The defendants have not produced any documents for substantiating their defence and further, observing the evidence of D.W.1 and DW2 that they have admitted the issuance of purchase orders and they have not
17 produced any document to show that they have informed the plaintiff in writing either regarding issuance of notice or E-mail for taking back the rejected materials and the defendants have failed to prove their defence by placing cogent evidence with regard to their defence.
Further, it is observed that the evidence of DW.1 and DW.2 reveals that though they produced the exhibits as Ex.D1 to Ex.D7 to prove that the work was in progress regarding installation of the project, but failed to prove their defence. DW.2 who has issued an authorization letter to DW.1 to lead evidence on behalf of him, that is, by issuing Ex.P45-authorization letter, but DW.2 deposed that he doesn’t know regarding the authorization given to adduce evidence. DW.1 categorically admitted regarding the total amount raised by the plaintiff and that invoices amount is Rs.63,83,934/- and further admitted that they have paid Rs.50,08,798/- and have to pay balance of Rs.13,75,136/-.
In view of the above circumstances, the evidences on record and the documents of both sides, it is observed that the defendants/appellants had taken inconsistent
18 pleadings in the written statement and evidence on record and further observed that the respondent/plaintiff is able to prove the case by producing the cogent evidence.
Having regard to the facts and circumstances and in view of the submissions of both the learned counsel, this Court is of the opinion that the appeal lacks merit and does not survive for consideration. There are no grounds to interfere with the well considered order passed by the Commercial Court.
Accordingly, the Commercial Appeal is dismissed. (ANU SIVARAMAN) JUDGE (DR. K.MANMADHA RAO) JUDGE
BNV ct-adp
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