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Calcutta High Court
Agarwal Coal Corporation Pvt. Ltd vs R. K. Commotrade Pvt. Ltd. & Ors on 24 July, 2025
IN THE HIGH COURT AT CALCUTTA
(ORIGINAL SIDE)
COMMERCIAL DIVISION
Present:
The Hon'ble Justice Krishna Rao
GA (COM) No. 2 of 2024
In
CS (COM) No. 500 of 2024
[Old CS No. 85 of 2023]
Agarwal Coal Corporation Pvt. Ltd.
Versus
R. K. Commotrade Pvt. Ltd. & Ors.
Mr. Moti Sagar Tiwari
Mr. Sailendra Kumar Tiwari
Ms. Muskan Jalan
Ms. Shweta Poddar
... For the plaintiff.
Mr. Rajarshi Dutta.
Mr. Vikas Baisya
Mr. Aurin Chakraborty
Ms. Ranjana Seal
Mr. Abhisekh Agarwal
... For the defendants.
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Hearing Concluded On : 17.06.2025
Judgment on : 24.07.2025
Krishna Rao, J.:
1. The Plaintiff has filed the present application for judgment upon
admission for a sum of Rs.1,25,50,000/- along with an interest at the
rate of 12% per annum.
2. The Plaintiff is engaged in the business of transportation of Coal in
India and worldwide.
3. The Defendant no. 1 company, is engaged in the business of trading of
Coal and the Defendant Nos. 2 and 3 are the directors of the Defendant
No. 1 Company and are responsible for the day-to-day affairs and
operations of the Defendant No. 1 Company.
4. In or around 2019, both the parties mutually agreed to start their
business in which the terms and conditions of such sale was
deliberated between the parties.
5. In pursuance of the aforesaid, the Plaintiff made supplies of coal of
various qualities to the Defendant No. 1 Company from time to time.
Cumulatively, the plaintiff supplied goods (coal) aggregating to Rs.
11,86,96,743/- to the Defendant No. 1 Company against invoices
delivered at the registered office of the Defendant No. 1.
6. The Defendant No. 1 made part payment aggregating to Rs.
10,61,46,742/- against the aforesaid invoices. However, Rs.
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1,25,50,000/- still remains due and payable against the aforesaid
invoices by the Defendant No. 1.
7. In or around 2021, the Defendant No. 2 by the pen of Defendant No. 1
issued five cheques of Rs. 25,00,000/- each all dated 9th March, 2021
in favour of the Plaintiff being Cheque Nos. 119802, 119803, 119804,
119805 and 119806, drawn on the Bank of India, Rash Behari Avenue
Branch.
8. The Plaintiff states that after presenting the aforesaid cheques for
payment in its bank account, the aforesaid cheques were dishonoured
and returned unpaid with the reason “Exceeds Arrangement”. In such
circumstances, the plaintiff through their Counsel issued notices to the
Defendant No. 1 Company informing them about the status of the
cheque and further requested to pay the outstanding amount validly
due to the Plaintiff.
9. On 16th July, 2021, a Criminal Complaint was filed by the plaintiff
against the Defendant Nos. 1 and 2 before the Learned Court of
Metropolitan Magistrate, Calcutta, being Case No. CS- COMPLAINT
CASE (SOUTH) 40254/2021 under Sections 138/141 of The Negotiable
Instruments Act, 1881.
10. Further on 28th July, 2021, the Plaintiff has filed another case against
the Defendant Nos. 1 and 2 before the Learned Court of XVIII Civil
Judge, Class-II, Indore, Madhya Pradesh, being Case No. SC NIA –
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SPECIAL CASE Negotiable Instruments ACT 21845/2021 under Section
138 of The Negotiable Instruments Act, 1881.
11. Counsel for the Plaintiff submits that the Plaintiff had sent a Demand
Notice/Invoice dated 26th August, 2021 via email as well as via Speed
Post being Consignment No. EI131113994IN, demanding payment
under Section 8 of Insolvency and Bankruptcy Code, 2016 read with
rule 5 of the Insolvency and Bankruptcy (Application to Adjudicating
Authority) Rules, 2016.
12. However, the Defendant No. 1 Company failed and neglected to reply to
such demand notice. Accordingly, the Plaintiff filed an Application
under Section 9 of Insolvency and Bankruptcy Code, 2016 read with
rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating
Authority) Rules, 2016 before Learned National Company Law Tribunal,
Kolkata Bench with case no. CP.(IB) 344/KB/2021, which was
withdrawn by the plaintiff with an order stated “Liberty is granted to
avail other remedies available as per law”.
13. Despite repeated requests, reminders and/or demands, the defendants
have failed and/or neglected and/or ignored to discharge the amount
due and/or payable by them to the plaintiff.
14. As the defendants failed to pay the amount to the plaintiff, the plaintiff
has initiated Pre-Institution Mediation process under Section 12-A of
Commercial Courts Act, 2015 read with rule 3(1) of the Commercial
Courts (Pre-Institution Mediation and Settlement) Rules, 2018 before
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the Mediation Centre, High Court at Calcutta, but the defendants have
not appeared, accordingly, “Non-Starter Report” is submitted, wherein
it was stated that “In spite of receiving final notice from the Mediation
Centre, High Court at Calcutta, the Opposite Party did not turn up for the
Mediation Process”.
15. After failure of Mediation process, the plaintiff has filed the present
suit.
16. Learned Counsel for the plaintiff submits that the claim for the plaintiff
amounting to Rs. 1,25,50,000/- appears in the defendant’s Audited
Balance Sheet for Financial Year 2020-2021, under the head “Trade
Payables”.
17. Learned Counsel for the plaintiff submits that the defendants have
admitted and has made unequivocal admission with regard to the claim
of the plaintiff by issuing cheques and the audited balance sheets for
the year 2020-2021 and there is no issue remains to be adjudicated by
this Court.
18. The plaintiff in support of his submissions has relied upon the following
judgments:
i. Asset Reconstruction Company (India)
Limited v. Bishal Jaiswal and Another,
reported in (2021) 6 SCC 366.
ii. Bengal Silk Mills Co. (In Liquidation) v.
Ismail Golam Hossain Ariff, reported in
1961 SCC OnLine Cal 128.
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iii. Asset Reconstruction Company (India)
Limited v. Tulip Star Hotels Limited &
Ors. reported in 2022 SCC OnLine SC 944.
iv. Barnwal Marketing & Ors. v. Gee Pee
Infotech Pvt. Ltd., reported in 2014 SCC
OnLine Cal 20106.
v. Deccan Chronicle Holdings Limited, a
Company incorporated under the
Companies Act, 1956 and Anr. v. Tata
Capital Financial Services Ltd., reported
in 2016 SCC OnLine BOM 5319 .
vi. Ultramatix Systems Pvt. Ltd. v. State
Bank of India and Others, reported in
2007 SCC OnLine Bom 286.
19. The defendants say that as per the assurance of the plaintiff that the
best quality of coal at in a low rate would be supplied with the
condition that the defendants would have to provide blank cheques for
the purpose of security before entering into a business transaction, the
defendant no.1 had issued 5 (five) cheques to the plaintiff for a total
sum of Rs.1,25,00,000/-.
20. It is the case of the defendants that on receipt of cheques, the plaintiff
supplied inferior and degraded quality of coal, which the defendant
no.1 could not be able to use and the same was duly informed to the
plaintiff and requested the plaintiff to return the cheuqes. The
defendants say that despite several requests, the plaintiff did not pay
any heed to the request of the defendants and had presented the
cheques for encashment only to harass the defendants and to extract
money from the defendants.
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21. The defendants submit that the plaintiff has filed false and frivolous
case against the defendants under Section 7 of the Insolvency and
Bankruptcy Code, 2016 which the plaintiff subsequently withdrawn the
same.
22. The defendants submit that on 27th April, 2021, the defendant no. 1
has lodged a General Diary with the Hare Street Police Station, Kolkata
against the plaintiff for return of cheques.
23. The defendants have relied upon the judgment in the case of Sandeep
Singh Vs. Hindustan Spirits Ltd. reported in 2023/DHC/000857
and submitted that the specific defence taken by the defendants in
regard to the nature of transactions which cannot be termed as an
unequivocal admission of liabilities of the Company.
24. Order XII, Rule 6 of the Code of Civil Procedure, 1908, reads as follows:
“ORDER XII
ADMISSIONS
6. Judgment on admissions.–(1) Where
admissions of fact have been made either in the
pleading or otherwise; whether orally or in writing,
the Court may at any stage of the suit, either on the
application of any party or of its own motion and
without waiting for the determination of any other
question-between the parties, make such order or
give such judgment as it may think fit, having
regard to such admissions.
(2) Whenever a judgment is pronounced under
sub-rule (1) a decree shall be drawn up in
accordance with the judgment and the decree shall
bear the date on which the judgment was
pronounced.”
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25. On receipt of order of the defendants, the plaintiff delivered coal worth
of Rs. 11,86,96,743/- and raised altogether 569 invoices upon the
defendants. The defendants have received materials and invoices and
have not raised any objection either to the materials supplied or the
invoices raised by the plaintiff. Out of the total bill amount of Rs.
11,86,96,743/-, the defendants have made part payment of Rs.
10,61,46,742/- from time to time by leaving the balance amount of Rs.
1,25,50,000/-.
26. The defendants have issued five (5) cheques of Rs.25,00,000/- each
cheque dated 9th March, 2021 to the plaintiff. The plaintiff has
presented the cheques for encashment but the cheques were returned
with the endorsement “Exceeds Arrangement”.
27. The plaintiff has disclosed the balance sheet of the defendant as on 31st
March, 2021 wherein an amount of Rs. 1,25,50,000/- is showing in
favour of the plaintiff as Sundry Creditor.
28. In the case of Asset Reconstruction Company (India) Limited Vs.
Tulip Star Hotels Limited and Others reported in 2022 SCC OnLine
SC 944, the Hon’ble Supreme Court held that:
“85. It is well-settled that entries in books of
accounts and/or balance sheets of a corporate
debtor would amount to an acknowledgment under
section 18 of the Limitation Act. In Asset
Reconstruction Co. (India) Ltd. v. Bishal Jaiswal
authored by Nariman, J. this court quoted with
approval the judgments, inter alia, of Calcutta High
Court in Bengal Silk Mills Co. v. Ismail Golam
Hossain Ariff and Pandam Tea Co. Ltd., the
judgment of the Delhi High Court in South Asia
9Industries P. Ltd. v. General Krishna Shamsher
Jung Bahadur Rana and the judgment of
Karnataka High Court in Hegde and Golay Ltd. v.
State Bank of India and held that an
acknowledgment of liability that is made in a
balance-sheet can amount to an acknowledgment
of debt.
86. In Bengal Silk Mills Co. v. Ismail Golam
Hossain Ariff, the Calcutta High Court held:
“9. I am unable to agree with the
reasoning of the Nagpur decision that a
balance-sheet does not save limitation
because it is drawn up under a duty to set out
the claims made on the company and not with
the intention of acknowledging liability. The
balance sheet contains admissions of liability ;
the agent of the company who makes and
signs it intends to make those admissions.
The admissions do not cease to be
acknowledgments of liability merely on the
ground that they were made in discharge of a
statutory duty. I notice that in the Nagpur case
the balance-sheet had been signed by a
director and had not been passed either by
the board of directors or by the company at its
annual general meeting and it seems that the
actual decision may be distinguished on the
ground that the balance-sheet was not made
or signed by a duly authorized agent of the
company. ..
11. To come under section 19 an
acknowledgment of a debt need not be made
to the creditor nor need it amount to a promise
to pay the debt. In England it has been held
that a balance-sheet of a company stating the
amount of its indebtedness to the creditor is a
sufficient acknowledgment in respect of a
speciality debt under section 5 of the Civil
Procedure Act, 1833 (3 and 4 Will–4c. 42),
see Atlantic and Pacific Fibre Importing and
Manufacturing Co. Ltd., In re [1928] Ch D
836.”
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29. The defendant by a letter dated 8th January, 2020, issued six (6)
cheques of the Bank of India of Rs. 25,00,000/- each cheque to the
plaintiff with an undertaking that in case the cheque in not honoured
by any reasons, the defendants shall be held liable for all the cost and
consequences of the same.
30. The defence of the defendants that the plaintiff has supplied inferior
quality of coal to the defendants which the defendants could not be
used the same and the same was informed to the plaintiff. The
defendants have not disclosed any document either in the affidavit-in-
opposition or in the written statement that when the defendants found
that the plaintiff has supplied inferior quality of coal, the defendants
have informed to the plaintiff.
31. The judgment relied by the defendant in the case of Sandeep Singh
(supra), the same is distinguishable from the facts and circumstances
of the present case. In the present case, the defendants have taken the
defence that the defendants have issued cheques for the purpose of
security but in the letter dated 8th January, 2020 by which the
defendants have issued cheques to the plaintiff in the said letter is is
categorically mentioned that “in case above cheques is not honoured by
any reason, we shall be held liable for all the cost and consequences of
the same”. The case relied by the defendants, in the said case, the
defendants have initiated counterclaim against the plaintiff but in the
present case there is no counter claim filed by the defendants.
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32. In the case of Barnwal Marketing & Ors. Vs. Gee Pee Infotesh Pvt.
Ltd. reported in 2014 SCC Online Cal 20106, the Coordinate Bench
of this Court held that :
“(17) The case sough to be made out by the
respondent in its affidavit-in-opposition is not
credible. There was no reason or occasion for the
respondent to furnish security to the petitioner in
the form of the two cheques which were
subsequently dishonoured. The respondent has, in
my opinion, concocted a story which is not
acceptable. This is unfortunate but nothing new.
We have often come across stories being churned
out in a desperate attempt to raise a defence to a
claim. The present case seems to be one of such
examples.
(18) The defence of the respondent as noted
above, in my opinion, is completely incongruous
and also vague, nebulous and convoluted. I have
no hesitation in saying that the defence is moon
shine. In my opinion, no triable issue has been
raised by the defendant and it will be a travesty of
justice to relegate the petitioner’s claim in this
application to trial. The object of Order 12 Rule 6 of
the Code of Civil Procedure is to enable a party to
obtain a speedy judgment at least to the extent of
the admission made by the other party. If frivolous
defences are allowed to stand in the way of the
plaintiff obtaining expeditious judgment to the
extent of the admission made by the defendant, the
purpose of Order 12 Rule 6 would be defeated.
Recalcitrant parties to a litigation often raise
disputes and defences only with a view to
protracting the litigation and delaying grant of relief
to the other party. This cannot be encouraged.”
33. In the present case also the plaintiff has supplied coal of various
qualities to the defendants for a total sum of Rs. 11,86,96,743/- and
the defendants have made part payment of Rs. 10,61,46,742/- keeping
the balance amount of Rs. 1,25,50,000/-. The defendants have also
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issued five cheques of Rs. 25,00,000/- each cheque but all the cheques
were dishonoured with the reasons “Exceeds Arrangement”.
Considering the defence of the defendants as mentioned above, this
Court finds that the same is moon shine and no triable issue has been
raised by the defendants to relegate the suit for trial.
34. In view of the above, the plaintiff is entitled to get decree on admission
amounting to Rs. 1,25,50,000/- along with interest at the rate of 12%
per annum from 17th November, 2020 till realisation of the total
amount. The defendants are directed to pay Rs.1,25,50,000/- along
with interest at the rate of 12% per annum from 17th November, 2020
till the realisation of the total amount. The suit filed by the paintiff is
commercial in nature and before initiation of the suit, the plaintiff has
issued notice to the defendants for payment but the defendants failed
to pay the said amount and the plaintiff has also initiated pre-
institution mediation process but the defendants failed to appear in the
mediation process. The defendants compelled the plaintiff to filed the
present suit and thus the plaintiff is also entitled to get cost of Rs.
1,00,000/-. The defendants are also directed to pay the cost of Rs.
1,00,000/- to the plaintiff.
35. G.A. (Com) No. 2 of 2024 is allowed. C.S. (Com) No. 500 of 2024
(Old No. CS. 85 of 2023) is disposed of. Decree be drawn accordingly.
(Krishna Rao, J.)
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