Patanjali Ayurved Limited vs. Ujala Goel Proprietor Of R U Overseas

Held

The Court held that the plaintiff's email dated 18.09.2020 did not amount to an admission of debt for Rs. 38,94,070/-. The Court reasoned that the plaintiff, upon receiving a debit note of Rs. 43,33,277/- earlier, had immediately rejected it. Subsequently, after discussions, a debit note of Rs. 38,94,070/- was issued. The plaintiff's email stated acceptance of the debit note and requested the release of outstanding payment after deducting the debit amount. The Court interpreted this as the plaintiff accepting the debit note for the time being to facilitate payment of the remaining outstanding amount, while reserving the right to challenge it later. The subsequent payments made by the defendant and the plaintiff's legal notice shortly after receiving the last payment supported this interpretation. The Court also noted that the defendant failed to provide any evidence to prove the impurity of the chemicals supplied, and the penalty charged appeared unilateral as no agreement was proved. Therefore, the Court found no reason to disagree with the Trial Court's finding that the plaintiff did not admit liability for Rs. 38,94,070/-. The Court modified the Trial Court's awarded interest rate from 15% to 9% per annum.

Facts

Patanjali Ayurved Limited (appellant/defendant) was sued by Ujala Goel (respondent/plaintiff), a chemical trader, for recovery of Rs. 38,94,070/-. The plaintiff had supplied chemicals to the defendant from April to August 2020. The defendant withheld payment, raising a debit note for Rs. 38,94,070/- on the grounds that the supplied material was substandard, with only 35.54% purity against an agreed 99% purity. The plaintiff denied supplying substandard material and claimed the debit note was not accepted. The Trial Court decreed the suit in favour of the plaintiff for the principal amount plus interest and costs. The defendant appealed this judgment.

Key Issues

1. Whether the plaintiff accepted the debit note of Rs. 38,94,070/- by sending an email dated 18.09.2020, as claimed by the defendant, or accepted a debit note of Rs. 1,26,602/-, as claimed by the plaintiff? - Petitioner's argument: The plaintiff accepted the debit note of Rs. 38,94,070/- via email dated 18.09.2020, which constitutes an admission of debt. - Revenue's argument: The plaintiff's email dated 18.09.2020 was an acceptance of a debit note of Rs. 1,26,602/-, not the larger amount, and was made to facilitate payment of outstanding amounts while reserving the right to challenge the larger debit note later. 2. If the defendant's stand is accepted, would the acceptance of the debit note of Rs. 38,94,070/- through email dated 18.09.2020 amount to an admission of debt for that sum? - Petitioner's argument: Acceptance of the debit note amounts to an admission of debt. - Revenue's argument: The email did not constitute an admission of debt for the full amount.