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TMI Blog2018 (2) TMI 1191X X X X Extracts X X X X X X X X Extracts X X X X ..... upon a ledger account maintained by Tata Motors/TML. The claims of Tata Motors/TML is based on the invoices raised against Om Sai Motors for vehicles supplied by Tata Motors to Om Sai Motors and for Logistic support provided by TML to Om Sai Motors. The claim, as submitted by Tata Motors/TML is based on a written contract and, therefore, the Summary Suit is maintainable. After accepting all the vehicles from Tata Motors/TML and acknowledging the same on the invoices submitted to them by Tata Motors/TML and also acknowledging their liability to pay the balance dues of ₹ 5 crores, Om Sai Motors have thereafter for the first time by its e-mail dated 13th June, 2013 tried to raise the defence that Tata Motors/TML had handed over the vehicles to Om Sai Motors despite Om Sai Motors not having ordered for the same only because the same were lying in their yard. The defence on the face of it appears to be false and is not bonafide and has no merit. The present case is covered under clauses (e) and (f) of para 18 of the decision in IDBI Trusteeship Services Ltd. (2016 (11) TMI 1529 - SUPREME COURT) and Tata Motors/TML are entitled to a judgment forthwith. Even otherwise, the learne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oping, manufacturing and selling, among others, passenger and commercial vehicles and spare parts thereof and providing value added services including but not limited to AMC, refurbishment, pre-owned vehicle business, loyalty programmes relating to sales and service of the vehicles, rural marketing, etc. Plaintiff No. 2- TML is a wholly owned subsidiary of Tata Motors and is engaged, inter alia, in the business of distribution and delivery of vehicles across India, that are manufactured by Tata Motors. In or about the year 2007-2008, due to the expanding business of Tata Motors and the increasing complexities in handling and distribution of its products, Tata Motors considered it appropriate to hand over the distribution of its products and the logistic support activities required for the same to its wholly owned subsidiary company i.e. TML, Plaintiff No. 2 herein. 3.2 Defendant No. 1 Om Sai Motors Pvt. Ltd. (Om Sai Motors) is a Private Limited Company incorporated under the Companies Act, 1956 and is engaged, inter alia, in the business of acting as dealers/sellers/distributors of all kinds of automobiles, passenger cars, etc. and their spare parts, tyres, engines, etc. and als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would remain effective and operative notwithstanding that Gangadhar Shetty ceases to be the Partner of Om Sai Automobiles. Gangadhar Shetty further agreed that the guarantee shall remain in full force and effect and shall be enforceable until the amounts due from Om Sai Automobiles (his proprietary concern) are fully received by Tata Motors, notwithstanding the termination of the dealership. 3.6 On 2nd April, 2002, Tata Motors entered into a Dealership Agreement with Om Sai Automobiles through its Proprietor, Gangadhar Shetty (first Dealership Agreement). The first Dealership Agreement was made effective from 1st January, 2001 to 31st December, 2003. As per the said first Dealership Agreement, Tata Motors had appointed Om Sai Automobiles as their Authorised Agent to sell and service Tata Indica, Tata Safari, Tata Sierra, Tata Estate and Tata Sumo on a principal to principal basis. 3.7 On 31st May, 2004 Tata Motors entered into a Dealership Agreement (second Dealership Agreement) with Om Sai Automobiles through its Proprietor Gangadhar Shetty. The said second Dealership Agreement was made effective from 1st January, 2004 to 31st March, 2007. As per the second Dealership Agree ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in force and shall be enforceable until the amounts due from Om Sai Motors are fully received by Tata Motors, notwithstanding the termination of the dealership. 3.12 Even after the expiry of the period stated in the second Dealership Agreement (i.e. on 31st March, 2007), Om Sai Motors continued to act as the Authorised Dealer for the Tata passenger business and accessories and spare parts thereof and the transactions between the parties were continued on the same terms and conditions as stated in the said second Dealership Agreement. Meanwhile Tata Motors vide its letter dated 8th June, 2007, issued a Letter of Intent for sales extension at Andheri to Om Sai Motors with certain conditions as more particularly set out in the said letter. 3.13 On 31st July, 2008 Tata Motors entered into a Dealership Agreement (the third Dealership Agreement) with Om Sai Motors. The said third Dealership Agreement was made effective from 1st January, 2008 to 31st March, 2010. For the said third Dealership Agreement, Tata Motors also informed of its decision of handing over the distribution of vehicles and logistic support activities required to its wholly owned subsidiary TML-Plaintiff No.2. As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hip in the City of Greater Mumbai, Maharashtra, for Fiat range of vehicles including palio, linca and grante punto. Thereafter Om Sai Motors entered into two separate extension agreements both dated 21st May, 2010 with Tata Motors and TML wherein Om Sai Motors and Tata Motors and TML agreed to extend the Dealership and Logistic support on the same terms and conditions as were set out in the previous three Dealership Agreements and previous Distribution and Logistic Support Agreement dated 31st July, 2008. By virtue of the said extension agreements, the said three Dealership Agreements and the previous Distribution and Logistic Support Agreement dated 31st July, 2008, were extended for a further period upto 31st March, 2011. 3.17 In furtherance of the aforesaid extension agreements, Om Sai Motors issued Letters of Authority dated 6th March, 2012 and 12th March, 2012, authorising Tata Motors and TML respectively to act as Facilitators and assist Om Sai Motors by arranging transit insurance and transportation of the passenger vehicles sold to Om Sai Motors under the said three Dealership Agreements and the said Distribution and Logistic Support Agreement. 3.18 According to Tata ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... One Lacs Eighty Eight Thousand One Hundred Sixty Two Twenty paise only) as listed in List-1 of paragraph 31 of the Plaint and TML raised 88 invoices totalling to ₹ 1,96,63,367.17 ( Rupees One Crore Ninty Six Lacs Sixty Three Thousand Three Hundred Sixty Seven Seventeen Paise only) as listed in List-2 of paragraph 31 of the Plaint. Tata Motors/TML have submitted that as per clause 12 of the third Dealership Agreement and Distribution and Logistic Support Agreement, Tata Motors/TML were to issue guidelines on instructions for payment terms for the vehicles and spare parts sold to Om Sai Motors and the same were duly binding upon Om Sai Motors. In furtherance thereof, it was mutually agreed between Tata Motors /TML and Om Sai Motors that Om Sai Motors will be liable to pay interest at the rate of 14 per cent per annum upon its failure to pay the amounts due to Tata Motors/TML. According to Tata Motors/TML, the credit billing facility which was availed by Om Sai Motors changed from time to time and the same was conveyed to Om Sai Motors and its Directors. Though Om Sai Motors agreed to the changed/increased rate of interest upto 15 per cent and the ledger account of Tata Motors/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds of guarantee entered into between Tata Motors and Gangadhar Shetty and Uday Shetty dated 15th March, 2005 and in pursuance of joint several and personal liability reinstated under the third Dealership Agreement dated 31st July, 2008 and the extension agreements dated 21st May, 2010. 3.22 That in all the agreements entered into between Tata Motors/TML and Om Sai Motors, it was clearly reflected that the Directors of Om Sai Motors admit and accept their personal and irrevocable liability to pay to Tata Motors and TML such amounts of money as may be due and payable and which may remain unpaid under or arise from the Dealership Agreements and that the guarantee shall remain effective and operative, notwithstanding that Gangadhar Shetty/Uday Shetty ceased to be the Directors of Om Sai Motors. Gangadhar Shetty and Uday Shetty also agreed that the guarantee shall remain in force and shall be enforcable until the amounts due from Om Sai Motors are fully received by Tata Motors/TML notwithstanding the termination of the Dealership. 3.23 That Om Sai Motors and its Directors, Gangadhar Shetty and Uday Shetty have acknowledged its outstanding payable to Tata Motors/TML vide their e-ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... voices referred therein are for the period October,2011 to February, 2012 and the last invoice raised by Tata Motors is of 29th February, 2012. The Suit is lodged by Tata Motors/TML on 27th October, 2015 and as such all the invoices referred to in List-1 of para 31 of the Plaint are hopelessly barred by the Law of Limitation as the same are beyond the period of three years. (vi) Similarly the invoices referred in List-2 raised by TML in para 31 of the Plaint also pertain to the period prior to March, 2012 and the present suit is filed on 27th October, 2015 i.e. beyond the period of limitation and as such List-II invoices are also hopelessly barred by the law of limitation; (vii) That Om Sai Motors have never confirmed the liability of the payment of the aforesaid invoices referred to in para 31 of the Plaint, on which the present suit is filed; (viii) That Exhibit BB-8 on page 374 of the Plaint i.e. e-mail dated 12th April, 2013, relied upon by Tata Motors/TML is not an acknowledgement of the outstandings payable by Om Sai Motors to Tata Motors/TML. The said e-mail clearly states that Tata Motors/TML blocked their Code account for the purpose of carrying on regular busines ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shamal Sidhai vs. Amar Mohandas Sindhi ((1972) 74 Bom LR 644). Further, Tata Motors / TML in support of their contention that Om Sai Motors are not entitled to conditional or unconditional leave but Tata Motors/TML are entitled to a decree at this stage have relied on the decision of the Hon'ble Supreme Court in the case of IDBI Trusteeship Service Ltd. vs. Hubtown Ltd.( AIR 2016 SC 5321) 7. I have considered the submissions on behalf of Tata Motors/TML and Om Sai Motors and the case law relied upon by Tata Motors/TML. The Hon'ble Supreme Court has in the case of Khan Bhadur Shapoor Fredoon Mazda (supra), after considering the essential requirements of Section 19 of the Limitation Act which provides for the effect of acknowledgement in writing has explained in paragraph 6 of the judgment as follows: 6. It is thus clear that acknowledgment as prescribed by Section 19 merely renews debt; it does not create a new right of action. It is a mere acknowledgment of the liability in respect of the right in question; it need not be accompanied by a promise to pay either expressly or even by implication. The statement on which a plea of acknowledgment is based must relate to a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en the parties such as that of debtor and creditor, and it must appear that the statement is made with the intention to admit such jural relationship. Such intention can be inferred by implication from the nature of the admission, and need not be expression in words. If the statement is fairly clear then the intention to admit jural relationship may be implied from it. The admission need not be express but must be made in circumstances and in words from which the Court can reasonably infer that the person making the admission intended to refer to a subsisting liability as at the date of the statement. Stated generally, courts lean in favour of a liberal construction of such statements though it does not mean that where no admission is made one should be inferred, or where a statement was made clearly without intending to admit the existence of jural relationship such intention could be fastened on the maker of the statement by an involved or far-fetched process of reasoning. As the law of limitation restricts a man from enforcing his rights it must receive strict construction, and if there be any doubt, the interpretation placed upon the law should be in favour of the right to proc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Tata Motors/TML that in no time they will bring the business to normal and clear all the pending dues (which according to Om Sai Motors is ₹ 5 crores ) of Tata Motors/TML. 11. In view of the above decisions of the Hon'le Supreme Court and this Court, it is clear beyond any doubt that the above paragraph in the e-mail dated 12th April, 2013 (Exhibit-BB-8 at page 374 of the Plaint) constitutes an acknowledgment on the part of Om Sai Motors that they are liable to pay ₹ 5 Crores to Tata Motors/TML. Om Sai Motors, therefore, cannot be now heard to say that the paragraph from the email dated 12th April, 2013 cannot be treated as an acknowledgement by Om Sai Motors and that the suit is barred by the law of limitation. 12. The learned Advocate appearing for the Plaintiffs has submitted that though no separate agreement is required to be executed for charging the interest under the main contract, the Plaintiffs are pressing for interest on delayed payments only from the date of filing of the Suit. The contention of Om Sai Motors that there is no contract for the payment of dues owed for withholding Form-C and other expenses are not payable cannot be accepted since, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (b) If the defendant raises triable issues indicating that he has a fair or reasonable defence, although not a positively good defence, the plaintiff is not entitled to sign judgment, and the defendant is ordinarily entitled to unconditional leave to defend; (c) even if the defendant raises triable issues and if a doubt is left with the trial judge about the Defendant's ? good faith, or the genuineness of the triable issues, the trial judge may impose conditions both, as to time or mode of trial, as well as payment into court or furnishing security. Care must be taken to see that the object of the provisions to assist expeditious disposal of commercial causes is not defeated. Care must also be taken to see that such triable issues are not shut out by unduly severe orders as to deposit or security; (d) if the Defendant raises a defence which is plausible but improbable, the trial Judge may impose conditions as to time or mode of trial, as well as payment into court, or furnishing security. As such a defence does not raise triable issues, conditions as to deposit or security or both can extend to the entire principal sum together with such interest as the court f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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