Delhi District Court
M/S Shiva Milk Foods vs Asha Ram And Sons Pvt. Ltd on 26 May, 2025
BEFORE THE COURT OF SH. SURINDER S. RATHI, DISTRICT JUDGE
(COMM.)-11 CENTRAL, THC, DELHI
CS Comm. No.1100/2024
M/s Shiva Milk Foods
A Registered partnership Firm
Office Address At:
15/9, Industrial Area, SSGT Road,
Ghaziabad, UP - 201001
Partners
1.
Sh. Prem Chand Gupta
2. Sh. Tushar Gupta
Both R/o III MR 18 Nchru Nagar,
Ghaziabad – 201001, Uttar Pradesh ………Plaintiff
Vs.
Asha Ram and Sons Pvt. Ltd.
At: 3496, Gali Dariba Pan, DB
Gupta Road, Pahar Ganj, New Delhi 110055
Also at:
815, D Mall, Netaji Subhash Place,
Pitampura, New Delhi-110034 ……..DefendantDate of Institution : 04.10.2024
Date of Final Arguments : 26.05.2025
Date of Judgment : 26.05.2025
Decision : DismissedJudgment
1. This suit seeks recovery of Rs.56,00,052/- alongwith interest @18% per
annum apart from recovery of Rs. 5 lakhs as litigation charges as unpaid
dues of goods sold.
Case of the Plaintiff
2. Case of the plaintiff as per plaint and the documents filed is that plaintiff
is a duly registered partnership firm at Ghaziabad, UP and is in theCS Comm No.1100/2024 Page 1 of 26
M/s Shiva Milk Foods Vs. Asha Ram and Sons
business of distribution and supply of food material. The plaint is filed by
Mr. Prem Chand Gupta, one of the two partners of the firm. The plaint is
silent so is the list of documents qua any document issued by the other
partner authorising him to file this suit on behalf of the firm. Defendant is
said to be a duly incorporated company having registered office at
Paharganj, Delhi and is also in the business of distribution and supply of
food materials within Delhi NCR and other States. In the course of
business defendant approached the plaintiff for purchase of “Bakery
Shortening Vanaspati” and other food products. Goods were sold and
supplied by plaintiff to the defendant through various invoices. It is
pleaded that in the course of business plaintiff was also purchasing food
materials from the defendant. Plaintiff was maintaining a running account
of all the sales/purchases made and payments received.
3. However, the plaint is absolutely silent as to when the business started
between the parties, when was the first or the last sale made, what was the
total no. of invoices issued, what is the cumulative value of all the sales
made or the payments received. All that is stated is that there was a debit
balance of Rs.56,00,052/-. Plaintiff claims to be entitled to 18% interest
from the date of invoice. The plaint does not comply Order 7 Rule 2A of
CPC as applicable to Commercial Courts in its entirety. Dues were not
cleared by the defendant despite follow up through written
communications, however, details thereof is not mentioned in the plaint.
4. It is pleaded that, in this backdrop, defendant filed a suit of Rs.40,37,767/-
against the plaintiff. The plaint is silent as to how plaintiff came to know
about the said suit filed by the defendant nor it contains any suit no. or
particulars of the Court where the same can be said to have been filed. It
is stated that plaintiff is taking necessary measures to counter that suit.
CS Comm No.1100/2024 Page 2 of 26
M/s Shiva Milk Foods Vs. Asha Ram and Sons
5. However, it is apprised by Ld. Counsel for defendant that plaintiff has
concealed the fact from the Court that defendant’s suit title “Asha Ram
and Sons Pvt. Ltd. Vs. M/s Shiva Enterprises and Ors.” CS (Comm.)
No. 1132/2023 stood decreed in favour of defendant and against the
plaintiff by the Court of Ms. Illa Rawat, Ld. DJ CC-03 Central on
05.06.2024. It is submitted that the suit in hand was filed on 04.10.2024
i.e. after four months of suffering the decree arising out of the same
dispute between the same parties qua common ledger of mutual sales and
purchase.
6. Furthermore, this Court is apprised that having suffered the decree in the
above case the plaintiff herein have preferred an appeal titled “Shiva
Enterprises and Ors. Vs. Asha Ram and Sons Pvt. Ltd.” bearing no.
RFA Comm. 380/2024 which was filed on 29.08.2024 and is subjudice
before Commercial Appellate Division Bench of Hon’ble High Court
of Delhi and is coming up on hearing on 07.11.2025. In the appeal
Hon’ble High Court has already directed the JD/plaintiff herein to deposit
the entire decretal amount but the same is yet to be deposited. Even this
fact has been concealed from this Court.
7. Although Ld. Counsel for plaintiff submits that there is no concealment
but this plea is found to be ex-facie unsatisfactory since in para 4 of
affidavit of Statement of Truth filed under Order 6 Rule 15A CPC
Appendix I plaintiff has already stated on oath as under:
I say that there is no false statement or concealment of any material facts, document
or record and I have included information i.e. according to me, relevant for the
present suit”.
8. The above para in the affidavit of the plaintiff is to be read with para 2
and 8 of the affidavit where it is stated by the plaintiff on oath as under:
“2. I am sufficiently conversant with the facts of the case and have also examined
all relevant documents and records in relation thereto”.
CS Comm No.1100/2024 Page 3 of 26
M/s Shiva Milk Foods Vs. Asha Ram and Sons
8. I say that I am aware that for any false statement or concealment, I shall be
liable for action taken against me under the law for the time being in force.
9. As such vide separate order notice under Section 379 BNSS (Section 340
Cr.PC) is being issued to the plaintiff partnership firm and both its
partners as to why perjury proceedings be not initiated against them.
10.It is pleaded that by not paying the debit balance defendant want to usurp
the plaintiff’s rights and cause mental agony, physical harassment and
undue financial loss by cheating the plaintiffs and played fraud with them.
No legal demand notice is shown to have been issued by the plaintiff
before filing the suit. The plaint claims that plaintiff had no other
efficacious remedy except to file the suit in hand for seeking
Rs.56,00,052/- with 18% interest from the due date of the invoices till
actual payment. Plaintiff approached Central DLSA for Pre-Institution
Mediation under Section 12A of Commercial Courts Act, 2015. Plaint is
silent as to when Pre-Institution Mediation was initiated or when the Non-
Starter Report was issued. As per plaint Non-Starter Report certificate
issued by South East District Legal Services Authority has been annexed
which is apparently a false statement. However, Court is apprised that the
Non-Starter Report is dated 30.05.2024. In this backdrop, suit in hand was
filed for following reliefs:
Prayer:
i. To pass an order in favor of Plaintiff and against the Defendant in the interest of
justice to pay outstanding amount of Rs. 56,00,052.26/- (Rupees Fifty Six Lakhs And
Fifty Two And Fifty Six Paisa Only) along with Pendent Lite and Future interest
@18% per annum till the date of actual payment;
ii. Award litigation Cost of Rs.5,00,000/- (Rupees Three Lacs only) in favor of the
Plaintiff in the interest of justice; and
iii. To pass such other and further order / orders as this Hon’ble Court may deem fit and
proper in the facts and circumstances of the present case.
11.Plain reading of the above prayer show that no pre-suit interest is claimed
even though in para 13 of the plaint it is mentioned that plaintiff is
desirous of seeking recovery of pre-suit interest as well. Upon receipt of
CS Comm No.1100/2024 Page 4 of 26
M/s Shiva Milk Foods Vs. Asha Ram and Sons
plaint it was found that no court fees was paid by the plaintiff on prayer b,
however, the same was said to be paid subsequently on the date of final
arguments.
12.Summons of the suit was served upon the defendant. Upon service of
summons defendant entered appearance through Sh. Sachin Kumar Jain,
Advocate. WS was filed within time.
Case of the Defendant
13.In the WS filed by the defendant company through the AR, dismissal of
the suit is prayed on the ground that the plaint is without any cause of
action and that plaintiff has approached the Court with unclean hands and
has concealed material facts. Defendant filed an application under Order
6 Rule 17 CPC for amendment of the WS. The said application was
allowed on 04.02.2025 as the only amendment sought was to include
verification para as per Order 6 Rule 15 (1) of CPC. The plaint is based
on false and fabricated claims and cooked up story for wrongful financial
gain. It is pleaded that the suit is counter to an earlier suit filed by the
defendant as “Asha Ram and Sons Pvt. Ltd. Vs. M/s Shiva Enterprises
and Ors.” CS (Comm.) No. 1132/2023 Ms. Illa Rawat, Ld. DJ CC-03
Central and as such it is abuse of process of law.
14.In reply to the plaint on merits it is not denied by the defendant that
plaintiff is a registered partnership firm at Ghaziabad, UP and is supplier
of food material. It is also not denied that Mr. Prem Chand Gupta is
partner of plaintiff firm. It is admitted that defendant is a duly
incorporated company and is supplier of food material. It is denied that
defendant approached the plaintiff for purchase of Bakery Vanaspati and
other food products on the basis of several invoices or that plaintiff was
maintaining a running account. It is pleaded that defendant purchased
material only on one occasion on 27.01.2021 vide invoice no. 33 for
CS Comm No.1100/2024 Page 5 of 26
M/s Shiva Milk Foods Vs. Asha Ram and Sons
Rs.15,68,548/- which was issued when the plaintiff’s name was M/s Shiva
Enterprises. Upon adjustment of this money there was an outstanding
balance of Rs.40,43,767/-.
15.It is pleaded that in the earlier suit filed by the defendant against the
plaintiff, partners of the plaintiff company Sh. Prem Chand Gupta and Sh.
Tushar Gupta moved an application under Order 7 Rule 11 CPC
pleading therein that they had no concern with the firm M/s Shiva
Enterprises. The said application was dismissed by Ld. DJ CC-03, Central
vide order dated 21.02.2024 with cost of Rs.10,000/-.
16.Court is apprised by Ld. Counsel for the defendant that the partners of the
plaintiff firm tried to mislead Ld. DJ CC-03 by claiming that M/s Shiva
Enterprises and M/s Shiva Milk Foods are distinct firms and that they
have nothing to do with M/s Shiva Enterprises even though M/s Shiva
Milk Foods was earlier known as M/s Shiva Enterprises and the above
two plaintiffs got this name changed by moving an application before the
Registrar of Firms.
17.This appears to be a clear cut case of perjury. In so far as Ld. Counsel for
defendant herein submitted that he painstakingly procured the document
which displayed that the partners of the plaintiff company herein got the
above name changed but still pretended that they have nothing to do with
M/s Shiva Enterprises. However, since Ld. DJ CC-03 did not issue any
perjury notice and simply dismissed the Order 7 Rule 11 CPC
application with cost of Rs.10,000/-, no action is being taken.
18.In reply to para 5 of the plaint defendant reiterates that there is no
question of repeated supply of products from the plaintiff to the defendant
as defendant had carried out only a single purchase from the plaintiff on
27.01.2021 for Rs.15,68,548/- which only stands adjusted in the mutual
account before filing the suit for recovery of Rs.40,43,767/-. It is denied
CS Comm No.1100/2024 Page 6 of 26
M/s Shiva Milk Foods Vs. Asha Ram and Sons
that defendant is liable to pay to the plaintiff Rs.56,00,052/- as claimed or
plaintiff is entitled to 18% interest over the same. Defendant has denied
that plaintiff was sending demand of Rs.56 lakhs by telecommunication
and written communication. Upon being asked, Ld. Counsel for plaintiff
accepts that no such written communication has been placed on record
and as such adverse inference as per Section 119 of Bhartiya Sakshya
Adhiniyam, 2023 (Section 114 (g) of Indian Evidence Act) deserves to
be taken against the plaintiff. With these pleas dismissal of the suit is
prayed.
19.Alongwith the WS defendant has placed on record affidavit of admission
denial filed to documents of plaintiff. Defendant has denied the invoices
and the ledger claiming that they are forged and fabricated documents
created to extort money.
20.The documents filed by the defendant include copy of decree passed by
Ld. DJ CC-03 against the plaintiff herein and in favour of defendant,
application Order 7 Rule 11 CPC filed by plaintiff herein alongwith the
order, copy of complaint filed with the GST commissioner dated
19.04.2023 alongwith reminder.
Replication
21.Separate replication was filed by the plaintiff to the WS wherein plaintiff
reiterated their pleaded case and denied the contentions of the defendant
since the defendant had pointed out the factum of concealment of suit
filed by the defendant against the plaintiff before Ld. DJ CC-03, plaintiff
has accepted this fact but claimed that this was a baseless, vexatious and
frivolous suit. It is pleaded that the plaintiff suffered the decree in that suit
because of gross negligence of plaintiff’s previous counsel. There is no
specific denial to defendant’s contention that defendant had carried out
purchase of goods from the plaintiff only once and that too on 27.01.2021
CS Comm No.1100/2024 Page 7 of 26
M/s Shiva Milk Foods Vs. Asha Ram and Sons
for Rs.15,68,548/- or that the same already stood adjusted in the ledger
books of the defendant and nothing is due and payable. As per Order 8
Rule 5 CPC such evasive denials are no denials and are akin to
admissions. Furthermore, plaintiffs did not file any affidavit of admission
denial to the defendant’s documents. Even this replication is not
accompanying.
22.Upon completion of pleadings following issues were identified by this
Court on 19.12.2024:
Issues:
1. Whether plaintiff is entitled to recovery of Rs.56,00,052/- alongwith 18%
interest p.a.? OPP
2. Whether plaintiff is entitled to litigation cost of Rs. 5 lakhs? OPP
3. Relief
Evidence
23.To prove its case plaintiff firm examined PW1 Tushar Gupta, partner of
the plaintiff firm where vide affidavit Ex.PW-1/A he deposed on the lines
of plaint and exhibited following documents:
1. A Copy of the Registration Certificate of the Partnership Firm is exhibited as
Exhibit- PW-1/1.
2. An office copy of the invoices raised by the Plaintiff, duly acknowledged by the
Defendant along with a summary thereof is exhibited as Exhibit-PW-1/2 (Colly)
running into 12 Pages.
3. A copy of the Ledger of the Defendant maintained by the Plaintiff in its Books of
Accounts is exhibited as Exhibit-PW-1/3 (Colly) running into 2 Pages.
4. The original copy of Non-starter certificate issued by the South East District
Legal Services Authority is exhibited as Exhibit-PW-1/4.
5. A Copy of the Authority Letter of Mr. Tushar Gupta is filed with Application for
substitution of Authorised Representative and is exhibited as Exhibit-PW-1/5.
24.In his cross-examination done by Ld. Counsel for defendant Sh. Prashant
Kumar Mittal, PW1 stated that he is educated up to 12 th and is conversant
with English language but cannot write. He is in the business since 2020.
Earlier he used to assist his father. They are also into manufacturing and
trading of spices, washing powder, edible oil and dairy products for the
last 20-25 years. His father was carrying business by the name of Prem
CS Comm No.1100/2024 Page 8 of 26
M/s Shiva Milk Foods Vs. Asha Ram and Sons
Chand Ved Prakash and Sons which was later changed to Prem and Sons
as his father’s proprietorship firm. He expressed unawareness qua
previous litigations between the parties. He is not aware about the no. of
invoices prepared qua which the suit is filed because it is dealt by the
Accounts Departments. Plaintiff firm has two employees and their CA
maintains the accounts. The accounts are maintained with the help of
Tally Software but he is not aware about it. He accepted that the invoices
Ex.PW1/2 do not carry any endorsement of acknowledgement. However,
he claimed that goods were handed over in person to the defendant but he
cannot name the person to whom the goods were handed over by him. He
denied the suggestion that the account statement Ex.PW1/3 is a forged
document.
25.He accepted that M/s Shiva Enterprises was their firm in partnership with
his father. He did not specifically admit or deny about the earlier suit filed
by the defendant against this firm. Upon being asked he specifically stated
that he never denied his concern and relation with M/s Shiva Enterprises
when he was told that he had moved an application in the earlier case
deniying relationship with M/s Shiva Enterprises. He added that he does
not know as to on what kind of papers his previous counsel made him
sign but he maintained that he has relations with M/s Shiva Enterprises.
26.In so far as PW1 was standing on oath when while answering question no.
46 as to whether he ever denied having relations with M/s Shiva
Enterprises he stated on oath that he never denied his relations with M/s
Shiva Enterprises which is a false statement because as per copy of
affidavit sworn and filed by him in the earlier case as available on record
as Ex.PW1/X1 colly. he has deposed that he had no relations with M/s
Shiva Enterprises. As such a second Section 379 BNSS (Section 340
CS Comm No.1100/2024 Page 9 of 26
M/s Shiva Milk Foods Vs. Asha Ram and Sons
Cr.PC) notice is being issued to the plaintiff partnership firm and both its
partners as to why perjury proceedings be not initiated against them.
27.Upon being suggested that he has no knowledge of the present case he
claims that he does have knowledge. He accepted that the earlier case
filed by the defendant against his firm was lost by him because of his
counsel. He stated that he has no knowledge if any complaint was filed
against the previous counsel. He claimed that the documents filed in the
earlier suit Ex.PW1/X1 were signed by him on the asking of counsel even
though he was unaware about the correctness of its contents. He signed
the same without reading it. He did not place on record partnership of the
plaintiff firm.
28.He was not aware if any legal demand notice was filed before filing of the
suit. He claimed that the goods under 2 invoices dated 07.03.2023 were
sent through their own vehicle. Person from the defendant came to their
factory at Ghaziabad when a loaded vehicle was handed over to him. He
is not aware as to where the goods were taken since earlier supplies were
also made int his fashion 4-5 times. No separate charge was claimed for
transportaion of goods as the same was included in the price. He could not
disclose the details of previous claimed 4-5 transactions and submitted
that they must be contained in the ledger. He denied that there is no dues
of Rs.56,00,052/-. He denied that he is answering the questions evasively.
29.No evidence was led by the defendant.
30. I have heard arguments of Ms. Ritu Goyal and Sh. Yash, Ld. Counsels
for plaintiff and Sh. Sachin Kumar Jain, Ld. Counsel for defendant. I
have perused the case file carefully.
31.Now I shall dispose of individual issues framed in this case.
Issue No.1:
1. Whether plaintiff is entitled to recovery of Rs.56,00,052/- alongwith 18%
interest p.a.? OPPCS Comm No.1100/2024 Page 10 of 26
M/s Shiva Milk Foods Vs. Asha Ram and Sons
32.At the onset it would be appropriate to cull out facts admitted by both the
sides. It is admitted by both the sides that they are not strangers to each
other and had business relations for the last several years. Plaintiff is a
registered parternship firm while defendant is a duly incorporated private
ltd. company. No separate written contract was entered between them
before they started sale and purchase of food items with each other. Both
the sides were maintaining a ledger of sales made and payments received.
While plaintiff has filed ledger on record defendant had not filed ledger
on record.
33.Admittedly, prior to filing the suit in hand defendant company had filed a
suit titled “Asha Ram and Sons Pvt. Ltd. Vs. M/s Shiva Enterprises and
Ors. CS Comm. no. 1132/2023 and also that the suit was decreed by the
Court of Ld. DJ CC-03 Central in favour of defendant on 05.06.2024.
Also admittedly, an appeal has been preferred by plaintiff herein against
the above judgment and decree under RFA Comm. 380/2024 before
Commercial Appellate Division of Hon’ble High Court whereunder
plaintiff herein is directed to deposit entire decretal amount with interest
vide order dated 11.09.2024 but no such payment has been made by
plaintiff till date. The said appeal of the plaintiff is subjudice and after last
date of hearing i.e. on 01.05.2025 and the next date of hearing is
07.11.2025.
34.Also admittedly, both partners of the plaintiff herein had filed an Order 7
Rule 11 CPC application before the Court of Ld. DJ CC-03 claiming
therein that they are not the partners of M/s Shiva Enterprises even though
their partnership firm M/s Shiva Milk Foods was earlier known as M/s
Shiva Enterprises. Admittedly, that application was dismissed and a cost
of Rs.10,000/- was imposed on the two partners of the plaintiff.
CS Comm No.1100/2024 Page 11 of 26
M/s Shiva Milk Foods Vs. Asha Ram and Sons
35.In order to discharge the onus of proving the entitlement to seek recovery
of Rs.56,00,052/- plaintiff has placed on record two invoices Ex.PW1/2
colly. both dated 07.03.2023. Upon perusal of these invoices it is evident
that they do not have any endorsement of receipt of goods. Admittedly,
both these invoices are for Rs.49,72,800/- and Rs.47,04,000/- i.e. total
Rs.96,76,800/- respectively mentions that the goods were sold from
Ghaziabad to the defendant company at Paharganj and sent to Delhi vide
two separate motor vehicles. It is submitted by Ld. Counsel for plaintiff
that both these invoices stand duly mentioned at page no. 22 Ex.PW1/3
colly, the ledger.
36.Perusal of this ledger, admittedly, shows that it opens with a credit
balance of Rs.47,43,767/- meaning thereby that plaintiff firm owed this
money to the defendant company as on 01.04.2022. No cogent reason is
stated as to why ledger for the FY 2020-21 was not filed and also nothing
is pleaded or placed on record to show as to how plaintiff incurred this
liability to pay Rs.47,43,767/- to the defendant. It is interesting to observe
that even though in this suit it is admitted that this money was payable by
plaintiff to the defendant but in the earlier suit filed by the defendant
defendant opposed this liability under the guise of a submission that the
defendant’s suit claim of Rs.40,37,767/- stood adjusted by way of set off
out of the cumulative value of Rs.96,76,800/- of above two invoices.
37.It is a settled legal proposition that in any money suit where a defendant is
desirous of claiming a set off, he/she shall follow the procedure as laid
down under Order 8 Rule 6 CPC. For ready reference the same is
reproduced hereunder:
“Order 8 Rule 6 CPC : Particulars of set-off to be given in written
statement.-
(1) Where in a suit for the recovery of money the defendant claims to set-off against
the plaintiffs demand any ascertained sum of money legally recoverable by himCS Comm No.1100/2024 Page 12 of 26
M/s Shiva Milk Foods Vs. Asha Ram and Sons
from the plaintiff, not exceeding the pecuniary limits of the jurisdiction of the
Court, and both parties fill the same character as they fill in the plaintiff’s suit,
the defendant may, at the first hearing of the suit, but not afterwards unless
permitted by the Court, present a written statement containing the particulars of
the debt sought to be set-off.
(2) Effect of set-off.- The written statement shall have the same effect as a plaint in
a cross-suit so as to enable the Court to pronounce a final judgment in respect
both of the original claim and of the set-off; but this shall not affect the lien,
upon the amount decreed, of any pleader in respect of the costs payable to him
under the decree.
(3) The rules relating to a written statement by a defendant apply to a written
statement in answer to a claim of set-off.
Order 8 Rule 6A CPC: Counter-claim by defendant.-
(1) A defendant in a suit may, in addition to his right of pleading a set-off under rule
6, set up, by way of counter-claim against the claim of the plaintiff, any right or
claim in respect of a cause of action accruing to the defendant against the plaintiff
either before or after the filing of the suit but before the defendant has delivered his
defence or before the time limited for delivering his defence has expired, whether
such counter-claim is in the nature of a claim for damages or not:
Provided that such counter-claim shall not exceed the pecuniary limits of the
jurisdiction of the court.
(2) Such counter-claim shall have the same effect as a cross-suit so as to enable the
Court to pronounce a final judgment in the same suit, both on the original claim and
on the counter-claim.
(3) The plaintiff shall be at liberty to file a written statement in answer to the
counter-claim of the defendant within such period as may be fixed by the court.
(4) The counter-claim shall be treated as a plaint and governed by the rules
applicable to plaints.
38.Combined reading of the above statutory provisions that once the
defendant filed a suit against the plaintiff for recovery fo Rs.40.37 lakhs it
was incumbent upon the defendant/plaintiff herein to set up a set off of
Rs.40.37 lakhs against the above claimed sale of Rs.96.76 lakhs apart
from filing a counter claim of remaining amount of Rs.56 lakhs. Had the
plaintiff herein done so, the necessity to file the suit in hand would not
have arisen.
39.Had the plaintiff herein been diligent and filed a written statement with a
plea of set off or counter claim, the Court of Ld. DJ CC-03 would have
CS Comm No.1100/2024 Page 13 of 26
M/s Shiva Milk Foods Vs. Asha Ram and Sons
treated them as separate suits and would have passed an effective
common judgement. This Court do not find any strength in the plea that
the plaintiffs herein could not file WS in earlier suit since when they filed
Order 7 Rule 11 CPC application under false pleas and committing
blatant perjury. Nobody stopped the plaintiffs from filing a WS alongwith
the application. Apparently, both the plaintiffs herein chose not to file any
WS to claim set off of Rs. 40 lakhs and counter-claim of Rs.56 lakhs.
Thus the plaintiffs cannot be allowed to plead and take benefit of their
own omission and inaction and also cannot be allowed to set off the
defendant’s claim of Rs. 40 lakhs by deducting in it from claimed sale of
Rs.96 lakhs without any judicial verdict. In order to show that the suit in
hand is maintainable, in this backdrop plaintiff has relied on three
judgments as under:
40.In case titled Ramesh Chand Ardawatiya Vs. Anil Panjwani, 2003
Latest Caselaw 125 SC, Hon’ble Supreme Court of India held as under
28……..”In the present case, the defendant having failed to file any written
statement and also having forfeited his right to filing the same the Trial Court
was fully justified in not entertaining the counter-claim filed by the defendant-
appellant. A refusal on the part of the Court to entertain a belated counter-
claim may not prejudice the defendant because in spite of the counter-claim
having been refused to be entertained he is always at liberty to file his own
suit based on the cause of action for counter-claim.”
41.In case titled Ashok Kumar Kalra Vs. Surendra Agnihotri and Ors.,
2019 Latest Caselaw 1126 SC Hon’ble Supreme Court of India held as
under:
“45. There are several considerations that must be borne in mind while
allowing the filing of a belated counter-claim. First, the Court must consider
that no injustice or irreparable loss is being caused to the Defendant due to a
refusal to entertain the counter-claim, or to the Plaintiff by allowing the same.
Of course, as the Defendant would have the option to pursue his cause of
action in a separate suit, the question of prejudice to the Defendant would
ordinarily not arise.
42.In case titled Indira Bhai Vs. Madhusoodanan, MANU/KE/2476/2014
Hon’ble High Court of Kerala held as under:
CS Comm No.1100/2024 Page 14 of 26
M/s Shiva Milk Foods Vs. Asha Ram and Sons
“8. The defendant in a suit may file a counter claim as provided under Rule
6A of Order VII of the Code of Civil Procedure. At the same time, he is not
bound to file a counter claim in respect of a cause of action which has
accrued to him, as provided under Rule 6A. The defendant may file a
separate suit in respect of that cause of action mentioned in Rule 6A. It is
optional for the defendant either to file a counter claim or to file a separate
suit.
43.Plain reading of the above judgments shows that in common parlance it is
always appropriate for a defendant to seek set off or file a counter claim
as per Order 8 Rule 6 CPC and Order 8 Rule 6A CPC well within time
i.e. before filing of the defence/WS. However, if for any reason the
defendant fails to do the same this does not per se means that the
defendant’s right to seek relief for the causes of action accrued unto his
favour stands forfeited. As mentioned by Hon’ble High Court of Kerala a
separate suit can be filed by the defendant if he fails to file counter claim
but it has to be seen as to on what facts the counter-claim or for that
matter the fresh suit is sought to be filed. It is the closeness of the factual
matrix and overlapping of related issues which is more relevant.
44.As rightly pointed out by Ld counsel for defendant, the answer to the
question has to be found by understanding Order 8 Rule 6 CPC and
Order 8 Rule 6A CPC in the backdrop of Section 11 of CPC i.e. Res
Judicata. For ready reference the same is reproduced hereunder:
Section 11. Res judicata.–
No Court shall try any suit or issue in which the matter directly and substantially
in issue has been directly and substantially in issue in a former suit between the
same parties, or between parties under whom they or any of them claim, litigating
under the same title, in a Court competent to try such subsequent suit or the suit
in which suchissue has been subsequently raised, and has been heard and finally
decided by such Court.
Explanation I.–The expression “former suit”shall denote a suit which has been
decided prior to a suit in question whether or not it was instituted prior thereto.
Explanation II.–Forthe purposes of this section, the competence of a Court shall
be determined irrespective of any provisions as to a right of appeal from the
decision of such Court.
CS Comm No.1100/2024 Page 15 of 26
M/s Shiva Milk Foods Vs. Asha Ram and Sons
Explanation III.–Thematter above referred to must in the former suit havebeen
alleged by one party and either denied or admitted, expressly or impliedly, by the
other.
Explanation IV.–Any matter which might and ought to have been made
ground of defence or attack in such former suit shall be deemed to have been a
matter directly and substantially in issue in such suit.
Explanation V.–Anyrelief claimed in the plaint, which is not expressly granted by
the decree, shall for the purposes of this section, be deemed to have been refused.
Explanation VI.–Wherepersons litigate bona fide in respect of a public right or
of a private right claimed in common for themselves and others, all persons
interested in such right shall, for the purposes of this section, be deemed to claim
under the persons so litigating .1[Explanation VII.–Theprovisions of this section shall apply to a proceeding for
the execution of a decree and references in this section to any suit, issue or former
suit shall be construed as references, respectively, to a proceeding for the
execution of the decree, question arising in such proceeding and a former
proceeding for the execution of that decree.
Explanation VIII. –An issue heard and finally decided by a Court of limited
jurisdiction, competent to decide such issue, shall operate as res judicata in a
subsequent suit, notwithstanding that such Court of limited jurisdiction was not
competent to try such subsequent suit or the suit in which such issue has been
subsequently raised.]
45.Explanation 4 of Res Judicata clearly shows that when any matter is so
directly and substantially in issue in the former suit between the same
parties that the same ought to have made a ground of defence in such
former suit then it shall be deemed to have been a matter directly and
substantially in issue in such suit.
46.The detailed factual matrix discussed by this Court hereinbefore show that
both the parties were buying and selling products from each other.
Defendant decided to sue the plaintiff herein in the earlier suit for
recovery of Rs.40,37,767/- for money due as on 10.02.2023 on the basis
of last sale made by defendant to the plaintiff on 24.07.2021. The earlier
suit was filed on 07.08.2023. Even before that suit was filed plaintiff
claimed to have carried out sales through two invoices both dated
07.03.2023 for Rs.49,72,800/- and for Rs.47,04,000/- respectively.
CS Comm No.1100/2024 Page 16 of 26
M/s Shiva Milk Foods Vs. Asha Ram and Sons
47.In the fitness of things in the earlier suit filed by defendant herein on
07.08.2023, against the plaintiff herein, the plaintiff herein should have
taken the defence of setting off/counter claim of Rs.96,76,800/- since
these two sales now agitated in the suit in hand were allegedly made much
before the filing of earlier suit. But the plaintiff herein, for the reasons
best known to them chose not to file WS or confront the plaintiff in the
earlier suit with the two invoices worth Rs.96.76 lakhs but rather took a
scandalous stand thereby denying any relationship with M/s Shiva
Enterprises. This frivolous stand of the plaintiff in hand was exposed by
the defendant and the Order 7 Rule 11 CPC application seeking
dismissal of the suit for want of cause of action was dismissed with cost.
48.In this backdrop, the language of explanation 4 of Section 11 Res
judicata CPC acquires significance since the two invoices and the ledger
agitated in the suit deserved to be placed on record and agitated in the
eariler suit. Failure on the part of plaintiff to do that does not absolve the
plaintiffs or give them second opportunity since these omissions have now
come under the realm of res judicata.
49.For the sake of clarity it is reiterated that if for the arguments sake this
Court agrees with the plaintiff’s right to seek recovery of Rs.96.76 lakhs
under 2 invoices, then since the amount of the suit in hand is
Rs.56,00,052/-, this Court will have to give a legal finding on both the
invoices of Rs.49.72 lakhs and Rs.47.04 lakhs. As the plaintiff herein had
already suffered a decree of Rs.40.37 lakhs despite existence of above two
invoices filed by the plaintiff in the suit in hand, such a finding would be
in direct conflict with the decree awarded to the defendant in the earlier
suit. Accordingly, this Court has no hesitation in concluding that the
suit in hand appears to be hit by res judicata by the verdict of Ld.
CS Comm No.1100/2024 Page 17 of 26
M/s Shiva Milk Foods Vs. Asha Ram and Sons
District Judge (Comm.)-03 dated 05.06.2024 in CS Comm.
No.1132/2023.
50.However, in the spirit of Order 14 Rule 2 CPC which mandates that a
Court shall pronounce judgment on all issues, this Court will endeavour to
give a factual finding on the factual assertions made in the plaint. For
ready reference the same is reproduced hereunder:
Order 14 Rule 2 CPC: Court to pronounce judgment on all issues:
(1) “Notwithstanding that a case may be disposed of on a preliminary issue, the
Court shall, subject to the provisions of sub-rule (2), pronounce judgment on all
issues
(2) Where issues both of law and of fact arise in the same suit, and the Court is of
opinion that the case or any part thereof may be disposed of on an issue of law only,
it may try that issue first if that issue relates to–
(a) the jurisdiction of the Court, or
(b) a bar to the suit created by any law for the time being in force,
and for that purpose may, if it thinks fit, postpone the settlement of the other issues
until after that issue has been determined, and may deal with the suit in accordance
with the decision on that issue.
51.It is pointed out by Ld. Counsel for the defendant that in para 7 of the
plaint and para 8 of examination in chief Ex.PW1/A plaintiff has
categorically claimed that the two invoices Ex.PW1/2 have been duly
acknowledged by the defendant. However, perusal of the two invoices
Ex.PW1/2 does not show any endorsement of acknowledgement or
delivery of goods. As such contents of the plaint and affidavit in chief qua
the above aspect are factually incorrect.
52.As regards the sale and delivery the law in this regard is governed under
Sale of Goods Act, 1930 and Carriage by Road Act, 2007 and Carriage
by Road Rules, 2011. The relevant statute which governs sale of movable
articles is Section 23 (2), Section 31, Section 33 and Section 39 of Sale
of Goods Act, 1930.
53.As far as duty of the seller is concerned, under Sale of Goods Act
(SoGA), 1930 Section 31 of the Act places entire duty on the seller to
CS Comm No.1100/2024 Page 18 of 26
M/s Shiva Milk Foods Vs. Asha Ram and Sons
ensure that the goods sold are delivered to the buyer. For ready reference
the same is reproduced hereunder:
Section 31: Duties of Seller and Buyer
“It is the duty of the seller to deliver the goods and of the buyer to accept
and pay for them, in accordance with the terms of the contract of sale.”
54.The term delivery also stands defined under the Statute under Section 33
of Sale of Goods Act, 1930 . The same is reproduced hereunder:
Section 33: Delivery
“Delivery of goods sold may be made by doing anything which the
parties agree shall be treated as delivery or which has the effect of
putting the goods in the possession of the buyer or of any person
authorised to hold them on his behalf.”
55.Likewise, standalone invoices do not prove delivery of the goods as
mandated under Section 31, 33 and 39 of Sale of Goods Act unless there
is a physical endorsement of delivery over them or there is a separate
document so as to show that the goods were actually delivered to
defendant or at least delivered to a goods carrier as provided under
Section 23 (2) and Section 39 of Sale of Goods Act. For ready reference
the same are reproduced hereunder:
Section 23 (2) :Delivery to carrier.–
“(2) Where, in pursuance of the contract, the seller delivers the goods to the
buyer or to a carrier or other bailee (whether named by the buyer or not) for the
purpose of transmission to the buyer, and does not reserve the right of disposal,
he is deemed to have unconditionally appropriated the goods to the contract.”
Section 39: Delivery to carrier of wharfinger:
“(1) Where, in pursuance of a contract of sale, the seller is authorised or
required to send the goods to the buyer, delivery of the goods to a carrier,
whether named by the buyer or not, for the purpose of transmission to the buyer,
or delivery of the goods to a wharfinger for safe custody, is prima facie, deemed
to be a delivery of the goods to the buyer.
(2) Unless otherwise authorised by the buyer, the seller shall make such
contract with the carrier or wharfinger on behalf of the buyer as may be
reasonable having regard to the nature of the goods and the other circumstances
of the case. If the seller omits so to do, and the goods are lost or damaged in
course of transit or whilst in the custody of the wharfinger, the buyer may
decline to treat the delivery to the carrier or wharfinger, as a delivery to
himself, or may hold the seller responsible in damages.
CS Comm No.1100/2024 Page 19 of 26
M/s Shiva Milk Foods Vs. Asha Ram and Sons
(3) Unless otherwise agreed, where goods are sent by the seller to the buyer by a
route involving sea transit, in circumstances in which it is usual to insure, the
seller shall give such notice to the buyer as may enable him to insure them
during their sea transit and if the seller fails so to do, the goods shall be deemed
to be at his risk during such sea transit.”
56.To prove delivery by a carrier, copy of Rule 7 and 8 of Carriage by
Road Rules should have been placed on record which is popularly known
as ‘Bilty’. Ld. Counsel for plaintiff has accepted that apart from filing e-
way bills issued under CGST Rules, 2017 which statutorily and as per
settled law does not prove actual delivery of the goods, neither Form 7 as
per Carriage by Road Rules, 2011 whereunder a seller hands over the
consignment/material/goods to the carrier under endorsement or Form 8
i.e. popularly known as ‘Bilty’ whereunder the carrier issues a receipt in
favour of the seller thereby acknowledging the receipt of goods.
57.Every transport company or a carrier of goods carries out business under
Carriage by Road Act, 2007 whereunder every movable article as and
when booked for transportation shall be done as per documentation
provided under the statute. The term common carrier is defined in Section
2 (a) of this Act.
Section 2 of Carriage by Road Act. 2007 : Definitions.-
In this Act, unless the context otherwise requires,–
i. “common carrier” means a person engaged in the business of collecting, storing,
forwarding or distributing goods to be carried by goods carriages under a goods receipt
or transporting for hire of goods from place to place by motorised transport on road, for
all persons undiscriminatingly and includes a goods booking company, contractor, agent,
broker and courier agency engaged in the doorto-door transportation of documents,
goods or articles utilising the services of a person, either directly or indirectly, to carry or
accompany such documents, goods or articles, but does not include the Government;
ii. “consignee” means the person named as consignee in the goods forwarding note;
iii. “consignment” means documents, goods or articles entrusted by the consignor to the
common carrier for carriage, the description or details of which are given in the goods
forwarding note;
iv. “consignor” means a person, named as consignor in the goods forwarding note, by whom
or on whose behalf the documents, goods or articles covered by such forwarding note are
entrusted to the common carrier for carriage thereof;
v. “goods” includes–
i. Containers, pallets or similar articles of transport used to consolidate goods; and
ii. animals or livestock;
vi. “goods forwarding note” means the document executed under section 8;
CS Comm No.1100/2024 Page 20 of 26
M/s Shiva Milk Foods Vs. Asha Ram and Sons
vii. “goods receipt” means the receipt issued under section 9;
viii. “person” includes any association or body of persons, whether incorporated or not, a
road transport booking company, contractor and an agent or a broker carrying on the
business of a common carrier;
ix. “prescribed” means prescribed by rules made under this Act;
x. “registering authority” means a State Transport Authority or a Regional Transport
Authority constituted under section 68 of the Motor Vehicles Act, 1988 (59 of 1988);
xi. “registration” means the registration granted or renewed under sub-section (5) of section
58. Section 2 of this Act also defines the specific terms like Consignee in
Section 2(b), Consignment in Section 2 (c) and Consignor in Section 2
(d). Even the terms “Goods Receipt” issued under Section 9 of this Act also
stands defined under Section 2 (g).
Section 9 of Carriage by Road Act, 2007 : Goods Receipt
1. A Common Carrier shall,-
i. in case where the goods are to be loaded by the consignor, on the completion of such
loading; or
ii. in any other case, on the acceptance of the goods by him, issue a goods receipts in
such form and manner as may be prescribed.
2. The goods receipt shall be issued in triplicate and the original shall be given to the
consignor.
3. The goods receipt shall be prime facie evidence of the weight or measure and other
particulars of the goods and the number of packages stated therein.
4. The goods receipt shall include an undertaking by the common carrier about the liability
under Section 10 or Section 11.
59. For ready reference Rule 10 of Carriage by Road Rules, 2011 is
reproduced hereunder:
Rule 10 : Goods forwarding note and goods receipt
i. “Every consignor while booking his goods shall execute a goods forwarding note as
specified under sub-section (1) of section 8, containing details of the goods in Form 7
and submit it to the common carrier in duplicate.
ii. For the goods of dangerous or hazardous nature, the goods forwarding note shall be
issued on a paper with upper left hand corners printed in red as “expand goods.”
iii. An acknowledged copy of the good forwarding note shall be returned by the common
carrier to the consignor.
iv. Every common carrier on receipt of the goods forwarding note from the consignor for
booking of goods to be transported, shall issue a goods receipt in Form 8.
v. For the goods of dangerous or hazardous nature, the goods receipt shall be issued on a
paper with upper left hand corners printed in red as “Dangerous and Hazardous
goods.”
60. Form 7 and 8 of Rules, 2011 are pictorially represented as under:
CS Comm No.1100/2024 Page 21 of 26
M/s Shiva Milk Foods Vs. Asha Ram and Sons
CS Comm No.1100/2024 Page 22 of 26
M/s Shiva Milk Foods Vs. Asha Ram and Sons
61.In this backdrop the onus of proving the delivery of the goods worth
Rs.56,00,052/- is on the plaintiff and under the law plaintiff could have
proved delivery by any of the following methods:-
i. Admission by defendant/defendant acknowledges the delivery
ii. Endorsement of receipt by the defendant on the invoices.
iii. Filing and proving Form 7 or Form 8 (Bilty) under Carriage by
Road Rules, 2011 to show that plaintiff delivered the goods to the
carrier and is entitled to benefit under Section 39 of Sale of Goods
Act, 1930.
iv. By proving on record that the GST claimed to have been deposited
by the plaintiff qua the invoices, defendant took input tax credit
under Section 2 (63) of CGST Act, 2017 and plaintiff is entitled to
presumption under Section 16 (2) of CGST Act, 2017.
62.Applying the above legal position on the factual matrix of this case it is
found that plaintiff has placed on record two e-way bills but as per settled
legal proposition e-way bills ipso facto does not mean that the goods have
been delivered. In this regard Allahabad High Court Full Court Bench in
case titled M/s Anil Rice Mill Vs. State of UP and Ors., 2024 Latest
Caselaw 26753 ALL held as under:
7……. if the petitioner wants to avail the ITC, he is duty bound to prove beyond any
reasonable doubt and establish that actual transaction took place and merely
furnishing the details of tax invoices, e-way bills, GR is not sufficient. The petitioner
was required to give details i.e. vehicle number which were used for transportation
of goods, payment of freight charged, acknowledgement of taking delivery of goods
and payment etc. He further submits that the petitioner was required to prove and
establish beyond doubt the actual physical movement of goods and genuineness of
transportation by furnishing details as has already been stated above and in the
event of such details are not furnished, the benefit of input tax credit cannot be
accorded. He prays for dismissal of this writ petition.
12. In the case in hand, the petitioner has only brought on record the tax invoices,
e-way bills, and payment through banking channel, but no such details such as
payment of freight charges, acknowledgement of taking delivery of goods, toll
receipts and payment thereof has been provided. Thus in the absence of these
documents, the actual physical movement of goods and genuineness of
transportation as well as transaction cannot be established and in suchCS Comm No.1100/2024 Page 23 of 26
M/s Shiva Milk Foods Vs. Asha Ram and Sons
circumstances, further no proof of filing of GSTR 2 A has been brought on record, the
proceeding has rightly been initiated against the petitioner.
13.The Apex Court in the case of State of Karnataka Vs. M/s Ecom Gill Coffee
Trading Private Limited (Civil Appeal No. 230 of 2023, decided on 13.03.2023),
while considering the pari material of section 70 of the Karnataka Value Added Tax
Act, 2003, where the burden was upon the dealer to prove beyond doubt its claim of
exemption and deduction of ITC.
In the said judgement Hon’ble the Apex Court has held that primarily burden of
proof for claiming the input tax credit is upon the dealer to furnish the details of
selling dealer, vehicle number, payment of freight charges, acknowledgement of
taking delivery of goods, tax invoices and payment particulars etc. to prove and
establish the actual physical movement of the goods. Further by submitting tax
invoice, e-way bill, GR or payment details is not sufficient.”
(Emphasis Supplied)
63. Lastly, the only option which was available to the plaintiff was to prove
that the defendant had availed input tax credit qua the GST claimed to
have been deposited by the plaintiff so that benefit in the form of
presumption Section 16 (2) of CGST Act, 2017 can be availed. The term
Input Tax Credit is defined in Section 2(63) of CGST Act, 2017. For
ready reference the same is reproduced hereunder:
Section 2 of CGST Act, 2017 : Definitions
(63) “Input tax credit” means the credit of input tax;
64. Section 16 of CGST Act, 2017 provides that in case a buyer has taken the
benefit of input tax credit it shall be deemed that he has already received
the goods/services provided to him by the plaintiff. For ready reference
Section 16 of CGST Act, 2017 is reproduced hereunder:
Section 16 : Eligibility and conditions for taking input tax credit
(1) Every registered person shall, subject to such conditions and restrictions as may be
prescribed and in the manner specified in section 49, be entitled to take credit of input
tax charged on any supply of goods or services or both to him which are used or intended
to be used in the course or furtherance of his business and the said amount shall be
credited to the electronic credit ledger of such person.
(2) Notwithstanding anything contained in this section, no registered person shall be
entitled to the credit of any input tax in respect of any supply of goods or services or
both to him unless,–
(a) he is in possession of a tax invoice or debit note issued by a supplier registered
under this Act, or such other tax paying documents as may be prescribed;
(b) he has received the goods or services or both.
CS Comm No.1100/2024 Page 24 of 26
M/s Shiva Milk Foods Vs. Asha Ram and Sons
[Explanation.–For the purpose of this clause, it shall be deemed that the registered
person has received the goods or, as the case may be, services-
i. where the goods are delivered by the supplier to a recipient or any other person on the
direction of such registered person, whether acting as an agent or otherwise, before or during
movements of goods, either by way of transfer of documents of title to goods or otherwise;
ii. where the services are provided by the supplier to any person on the direction of and on
account of such registered person.]
(c) subject to the provisions of [section 41 or section 43A], the tax charged in respect
of such supply has been actually paid to the Government, either in cash or
through utilization of input tax credit admissible in respect of the said supply;
and
(d) he has furnished the return under section 39:
Provided that where the goods against an invoice are received in lots or instalments, the
registered person shall be entitled to take credit upon receipt of the last lot or
instalment:
Provided further that where a recipient fails to pay to the supplier of goods or services
or both, other than the supplies on which tax is payable on reverse charge basis, the
amount towards the value of supply along with tax payable thereon within a period of
one hundred and eighty days from the date of issue of invoice by the supplier, an amount
equal to the input tax credit availed by the recipient shall be added to his output tax
liability, along with interest thereon, in such manner as may be prescribed:
Provided also that the recipient shall be entitled to avail of the credit of input tax on
payment made by him of the amount towards the value of supply of goods or services or
both along with tax payable thereon.
(Emphasis Supplied)
65.Although plaintiff has placed on record GSTR-1 of his GST records but
neither they were proved by PW1 alongwith affidavit under Order 11
Rule 6 CPC nor any witness was summoned from the GST department.
Even otherwise it is a settled legal proposition that GSTR-1 under GST
Act only shows the Goods and Services Tax deposited by the supplier of
the services. It has absolutely nothing to do with the availing of input tax
credit by the receiver of the services i.e. buyer. As per scheme of these
forms entries of GSTR-1 get autopopulated as GSTR-2A and GSTR-2B
of the buyer who in turn verify and prepare GSTR Form 2 of all his
inward suppliers whereby monthly data of all the Input Tax Credit is
collected in the form of GSTR-3B. In the absence thereof nothing is
proved by the plaintiff to show that defendant availed ITC of the claimed
supply of Rs.96 lakhs and no presumption under Section 16 (2) arises in
favour of plaintiff and against the defendant.
CS Comm No.1100/2024 Page 25 of 26
M/s Shiva Milk Foods Vs. Asha Ram and Sons
66.In the absence thereof once the plaintiff has failed to prove actual physical
delivery of the goods as mandated under Section 31, 33 and 39 of Sale of
Goods Act, 1930 question of defendant paying any money to the plaintiff
does not arise. Plaintiff has accordingly failed to discharge onus of issue
no. 1. Accordingly, this issue is answered against the plaintiff and in
favour of defendant.
Issue no. 2
2. Whether plaintiff is entitled to litigation cost of Rs. 5 lakhs? OPP
67.In view of decision of issue no. 1, relief qua this issue is not made out.
Accordingly, this issue is decided against the plaintiff and in favour of
defendant.
Relief
68.In view of the above discussion, this Court has no hesitation in concluding
that plaintiff has miserably failed to discharge the onus of proving this
case and suit of the plaintiff is accordingly dismissed with cost.
Defendant’s lawyer’s fees is assessed as Rs.50,000/-.
69.Decree Sheet be prepared accordingly. File be consigned to Record Room
after due compliance.
Digitally
signed by
SURINDER
SURINDER S RATHI
S RATHI Date:
2025.06.02
15:38:14
+0530(SURINDER S. RATHI)
District Judge,
Commercial Court -11
Central District, THC
Delhi/26.05.2025CS Comm No.1100/2024 Page 26 of 26
M/s Shiva Milk Foods Vs. Asha Ram and Sons