Yangchen C Rinzin
A Mumbai-based company, Minex Metallurgical Company Ltd (MMCL), had requested the Phuentsholing drungkhag court to enforce Supreme Court’s (SC) June 21 judgment.
The SC had upheld High Court’s bench I verdict, which was rendered in July 2018.
The verdict ordered SKW Tashi Metals and Alloys Pvt Ltd to pay Nu 10.95 million to MMCL within three months, which ends by September 23.
Since SKW Tashi Metals and Alloys Pvt Ltd MMCL did not pay the money, MMCL had submitted the enforcement letter on October 1 for not complying the order.
The two companies had done business between 2013 and 2015.
According to the verdict, the general manager of SKW Tashi Metal and Alloys Pvt Ltd met with the managing director of MMCL at the Radisson Hotel in New Delhi, India on September 9, 2015. The general manager, Klee Rainer agreed to supply 100 metric tonnes (MT) of Calcium Silicide within a month.
As asked by the SKW Tashi Metal and Alloys Pvt Ltd, the client deposited Nu 10M on September 21, 2015. However, a conflict between the partners of the company, SKW Stahl Metallurgy Holding AG and SKW- Tashi Metal and Alloys Pvt Ltd hampered production.
Later it was found that SKW Tashi Metal and Alloys Pvt Ltd had closed since July 2015, more than two months before the meeting in New Delhi. The client (MMCL) learnt about the closure only a month later when it sent an official to inquire about the supply. The client’s repeated requests to refund the money were also ignored.
The High Court observed that Klee Rainer of SKW- Tashi Metals and Alloys Private Ltd with the knowledge that his company was closed, solicited dealing in trade and willfully misrepresented the sale of goods with intent and prior knowledge that it cannot be supplied violates an obligation to good faith.
Section 6 of the Commercial Sales of Goods Act 2001 states that every contract or duty within this Act imposes an obligation of good faith in its performance or enforcement. Section 9 (ix) defines good faith as honesty and faith and the observance of reasonable standards of fair dealing. In the case of a merchant, it also requires reasonable standards of fair dealing in the trade.
The verdict stated that knowingly that the goods cannot be supplied and the company took an advance of Nu 10M, is the height of commercial misrepresentation, fraud and condemnable act.
The case was first registered at the Phuentsholing drungkhag court in 2017 and the verdict had ordered the company to refund the amount. The case was appealed to Chukha dzongkhag court, which upheld the drungkhag court judgment.