Delhi District Court
Dhruv Garg vs Mithlesh Sharma on 23 December, 2024
IN THE COURT OF SH MUKESH KUMAR GUPTA
DISTRICT JUDGE(COMMERCIAL)-07(CENTRAL)
TIS HAZARI COURTS: DELHI
CS (Comm.) No. 298/2023
CNR No. DLCT010022692023
DLCT010022692023
Mr. Dhruv Garg,
(Proprietor of M/s Dhruv Garments)
Head office At H-16/92-93,
Gali No.003, Gobind Garh,
Tank Road, Karol Bagh,
Delhi-110005
(Through its Authorised Representative Shri Chirag Garg)
......Plaintiff.
Vs.
Smt. Mithlesh Sharma
(Proprietor of M/s Mitali Collection)
At : 313/89, Ground Floor, Gali No.6,
Tulsi Nagar, Near Inderlok,
Delhi-110035.
Email ID: [email protected]
Mob.: 9911999683, 9717464547 ... Defendant.
SUIT FOR RECOVERY OF RS. 22,79,892/-
Date of institution of suit : 09.02.2023
First Date before this court : 30.04.2024
Date on which reserved : 18.12.2024
Date of Judgment : 23.12.2024
Appearance(s) : Shri Rajeev Chauhan, Adv. Ld. Cl. for plaintiff.
Digitally
signed by
MUKESH
MUKESH
Shri M.P. Arora, Advocate, Ld. Cl. for the
KUMAR
KUMAR GUPTA
Date:
GUPTA 2024.12.23
16:08:08
+0530
defendant.
CS (Comm.) No. 298/2023 Dhruv Garg Vs. Mithlesh Sharma Page no. 1 of 30
JUDGMENT
(A) PRELUDE:
1. By way of present judgment, I shall conscientiously adjudicate
upon plaintiff’s suit for Recovery of Rs.22,79,892/- (which includes the
principal amount of Rs. 17,83,498/- and pre-suit interest component a
18% per annum amounting to Rs.4,96,394/- w.e.f. 15.05.2020 till filing
of the suit) alongwith interest @ 18% per annum pendentlite and future
from the date of filing of suit till its realisation. The plaintiff has also
prayed for costs of the suit against the defendant.
(B) CASE OF THE PLAINTIFF:-
2. Eschewing prolix reference to the pleadings crystallizing the same
the plaintiff has averred in the plaint that: –
2.1) The plaintiff is proprietor of a proprietorship firm engaged in
the business of trading of readymade garments under the name and style
of M/s Dhruv Garments having its registered office at H-16/92-93, Gali
No.03, Gobind Garh, Tank Road Karol Bagh, Delhi-110005. The present
suit has been instituted through its Authorized Representative Mr. Chirag
Garg who is conversant with the facts and circumstances of the present
case and is duly authorized by the plaintiff vide its authorization letter
dated 12.01.2023.
2.2) The defendant is also proprietor of a proprietorship firm M/s
Mitali Collections having its office at 313/89, Ground Floor, Gali No.6,
Tulsi Nagar, Near Inderlok, Delhi-35. As per plaintiff, the defendant
MUKESH by
Digitally signed
MUKESH
KUMAR GUPTA
approached the plaintiff and made request for supply of readymade
KUMAR Date:
GUPTA 2024.12.23
16:08:15 +0530
CS (Comm.) No. 298/2023 Dhruv Garg Vs. Mithlesh Sharma Page no. 2 of 30
garments. As per demand and request of the defendant, the plaintiff
supplied readymade garments from time to time to the defendant and in
the ordinary course of business, plaintiff raised invoices alongwith GST.
The said goods had been consumed/sold by the defendant without any
complaint.
2.3) Plaintiff has also claimed to have business dealing with
another firm of the defendant namely M/s Hootry and when the firm was
about to be closed, a request was made by the defendant for merging the
account of M/s Hootry with the account of defendant and accordingly,
on defendant’s request an outstanding bill amount of Rs.8,76,904/- of
M/s Hootry has been transferred as outstanding in the account books of
defendant whereafter which the account of defendant’s firm M/s Hootry
have been merged with the defendant. It is stated that after merger, the
defendant has cleared the outstanding amount of both the firms from
account of her firm namely M/s Mitali Collection and since 31.03.2021
has paid a sum of Rs.19,00,000/- on account, to the plaintiff whereafter
which an outstanding amount of Rs.17,83,498/- has been shown as due
in the statement of account as per the ledger statement maintained by the
plaintiff which the defendant has failed to pay.
2.4) Despite receiving the entire supply, the defendant did not
make the entire payment and as per the invoices raised by the defendant
for the goods supplied by the plaintiff for which repeated requests have
been made but of no avail. The plaintiff has sent messages and letters
Digitally signed
MUKESH
KUMAR
by MUKESH
KUMAR GUPTA
Date:
requesting the defendant to release the balance payment but defendant
2024.12.23
GUPTA 16:08:28did not pay any heed to the same and finally, plaintiff was compelled to
+0530issue a legal notice dated 27.05.2022, calling upon the defendant to pay
CS (Comm.) No. 298/2023 Dhruv Garg Vs. Mithlesh Sharma Page no. 3 of 30
the outstanding amount with interest @ 18% per annum. The defendant
instead of making the payment has sent false and frivolous reply dated
29.06.2022 thereby raising frivolous grounds for not making the payment
but did not dispute the delivery of entire goods to the entire satisfaction
of the defendant.
2.5) After following the mandatory procedure of pre-institution
mediation, the plaintiff has filed the present suit for recovery of
Rs.22,79,892/-(Rs.17,83,498/-being the principal amount plus
Rs.4,96,000/- as interest @18% per annum w.e.f 15.05.2020 till filing of
the suit against the defendant). The plaintiff has also prayed for interest
pendente lite and future @ 18% per annum from the date of filing of the
suit till actual payment.
(C) CASE OF THE DEFENDANT:-
3. On receipt of summons for settlement of issues, the defendant
contested the suit by filing a detailed Written Statement thereby taking
various preliminary objections as averred and mentioned herein under:-
3.1) The suit filed by the plaintiff is false and frivolous as plaintiff has
not come before the court with clean hands having wrongly included the
sum of Rs.8,76,904/- in the suit which belongs M/s Hootry merely on the
ground that the plaintiff was also doing the business with this firm. It
has also been denied that M/s Hootry is another firm of the defendant and
the defendant had ever requested that the aforesaid account may be
transferred and shown as outstanding from the defendant in the books of
the plaintiff or that the account of the defendant firm and M/s Hootry
MUKESH by
Digitally signed
MUKESH
KUMAR GUPTA
have been merged. It has also been denied that the
KUMAR Date:
GUPTA 2024.12.23
16:08:35 +0530 CS (Comm.) No. 298/2023 Dhruv Garg Vs. Mithlesh Sharma Page no. 4 of 30
defendant has cleared outstanding amount of both firms through accounts
of defendants’ firm. It has been contended that the defendant is not
liable to pay any interest as there is no such agreement in this regard and
also such a stipulation of interest is not mentioned on any of the invoices
supplied by the plaintiff to the defendant.
3.2) On merits, all the allegations made in the plaint have been denied
as incorrect. It has been contended that plaintiff had assured the
defendant to supply the goods as per requirements of the orders placed by
the defendant and the defendant had assured and promised the plaintiff
that she will clear the bills and make the payments after adjustments of
goods return etc. from time to time. It has also been contended that as
per the direction, instructions and order of the defendant, the plaintiff had
supplied redymade garments time to time to the defendant in the ordinary
course of business had raised invoices alongwith GST and the defendant
had returned goods to the tune of Rs.5,12,300/- to the plaintiff on account
of supply of bad quality and wrong material but the credit for the same
has not been given by the plaintiff. The defendant had made a payment of
Rs.50,000/- to the plaintiff on 28.10.2018 and 14.12.2018 but the credit
for the same has not been given in the account of the defendant.
Similarly, amount of Rs.2,00,000/- and Rs.3,00,000/- have been debited
on 31.03.2020 in the account of the defendant maintained in the books of
the defendant but no such amount have received by the defendant and a
sum of Rs.3,00,000/- has been wrongly credited. Accordingly, the
Digitally signed defendants sought reconciliation of the accounts to know the exact
MUKESH by MUKESH
KUMAR GUPTA
KUMAR Date:
GUPTA 2024.12.23
16:08:44
outstanding.
+0530
CS (Comm.) No. 298/2023 Dhruv Garg Vs. Mithlesh Sharma Page no. 5 of 30
3.3.) It has also been contended that the defendant has not
received any material in respect of invoice No. 1133 dated 30.7.2021 for
Rs.6,30,147/- and invoice No. 1137 dated 31.07.2021 for Rs.4,59,976/-
and the plaintiff has not filed any proof in this regard on record. The
defendant has suffered losses as the plaintiff has not given credit for the
goods returned of Rs.5,12,300/-. It has further been denied that the
plaintiff is entitled to claim a sum of Rs.4,96,394/- as interest @ 18% per
annum from the date of outstanding of the bill till filing of the present
suit as there is no agreement to this effect and also the stipulation of
interest is mentioned in any of the invoices of the plaint given to the
defendant. Dismissal of suit with costs has been prayed.
4. A detailed Rejoinder/replication to the Written Statement was also
preferred by the plaintiff reiterating the contents of the plaint and
vehemently denying the contents of the Written Statement. It has been
reiterated by the plaintiff that the ledger account and alleged debit note as
placed by the defendant is defective and seems to be a false and
fabricated, because some of invoices raised by the plaintiff were not
entered by the defendant, similarly some invoices issued by the plaintiff
to the defendant Firm were entered into the M/s Hootry Account and
some invoices issued to M/s Hootry account were shown in the
defendant’s ledger account. The plaintiff has tried to explain the double
entries of Rs.3,00,000/- which were rectified in the statement dated
31.03.2020 in plaintiff’s ledger after reconciliation and has also
explained the credit entry of Rs.2,00,000/- during such reconciliation.
The plaintiff has reiterated receipt of material worth of Rs.6,30,147/- and
Rs.4,59,970/- against the invoice. The plaintiff has reiterated the prayer
Digitally signed clause as mentioned in the plaint.
MUKESH by MUKESH
KUMAR GUPTA
KUMAR Date:
GUPTA 2024.12.23 CS (Comm.) No. 298/2023 Dhruv Garg Vs. Mithlesh Sharma Page no. 6 of 30
16:08:59 +0530
(D) CRYSTALISING THE DISPUTE :-
5. On the pleadings of the parties and documents placed on record the
following issues were framed for adjudication vide order dated
18.03.2024.
ISSUES.
(i) Whether the defendant has returned goods
worth Rs.5,12,300/- to the plaintiff as they
were of inferior quality. If so, the effect
thereof?OPD
(ii) Whether the plaintiff is entitled to recovery
of the suit amount of Rs. 22,79,892/- from the
defendant ?OPP
(iii) Whether the plaintiff is entitled to any
interest from the defendant, if so, at what
rate and for what period ?OPP
(iv) Relief.
(E) EVIDENCE OF PLAINTIFF.
6. Plaintiff, in support of his case, got examined his Authorised
Representative Shri Chirag Garg as PW1 and reiterated the contents of
the plaint on oath in his affidavit Ex.PW1/A. He got exhibited the
Authorization letter in his favour issued by proprietor of plaintiff dated
12.01.2023 as Ex. PW1/1, Original Ledger Account of the plaintiff as Ex.
PW1/2 (colly), Tax invoices/bills dated 30.07.2021 as Ex.PW1/3 and
31.07.2021 Ex.PW1/4, Computer generated copy of GST Return as
Ex.PW1/5 (colly), Ledger account of the M/s Hootry as Ex.PW1/6, Tax
Invoice bills raised by plaintiff showing sales of material between
12.06.2018 and 21.01.2019 to M/s Hootry as Ex.PW1/7 to Ex.PW1/16,
Copy of Legal Notice as Ex.PW1/17 and Reply to Legal Notice dated
MUKESH by
Digitally signed
MUKESH
29.06.2022 as Ex.PW1/18. During examination-in-chief of the plaintiff, a
KUMAR GUPTA
KUMAR Date:
GUPTA 2024.12.23
16:09:06 +0530 CS (Comm.) No. 298/2023 Dhruv Garg Vs. Mithlesh Sharma Page no. 7 of 30
court question has been raised against the witness as to whether the
defendant has made any payment to the plaintiff firm during the
pendency of the present proceedings which was replied in negative.
7. The witness was subjected to a detailed cross-examination by Ld.
Counsel for defendant who has tried to puncture the testimony of PW1
on the aspects of invoices, statement of account, outstanding bills,
transfer of outstanding amount of M/s Hootry to the defendant firm and
even authorisation of PW1 to depose on behalf of plaintiff. He has
deposed that his brother Shri Dhruv Garg is proprietor of the plaintiff
firm and he is taking care of the business of the firm and his brother Shri
Dhruv Garg has authorised him to file the present suit. He has further
deposed that he is engaged in the business of readymade garments at
Tank Road, Karol Bagh for the last 7-8 years and he has dealt with the
defendant for the last 4 years. He has further deposed that his brother
Mr. Dhruv Garg has never met with Smt. Mithlesh Sharma, proprietor of
defendant firm. It has also been stated that he has never been issued any
Special Power of Attorney by his brother Shri Dhruv Garg to run the
business and to file the present suit but stated that his brother Shri Dhruv
Garg has signed the authorization letter issued to him for filing the
present suit. He has further deposed that his brother used to sign in the
invoices issued to defendant digitally. He has admitted the signature of
his brother Dhruv on the invoices bill Ex.PW1/3 and authorisation letter
Ex.PW1/1 and stated that his brother used to sign differently for bank
purpose and for other purposes, however, he did not remember the exact
period during which he has carried the business with M/s Hootry at the
same time voluntarily deposing that it may be 2-3 years. He has further
Digitally
signed bydeposed that he has been dealing with Smt. Mithilesh and her son Shri
MUKESH
MUKESH KUMAR
KUMAR GUPTA
GUPTA Date:
2024.12.23
16:09:19
+0530
CS (Comm.) No. 298/2023 Dhruv Garg Vs. Mithlesh Sharma Page no. 8 of 30
Aakash as the firm Hootry belongs to the defendant.
8. He has further deposed that tax invoices have been issued in the
name of M/s Hootary, however, he has not mentioned the name of M/s
Hootry in the Legal Notice issued to the defendant. He showed
ignorance about any amendment been carried out in the plaint after
filing the suit. He has further deposed that he has issued legal notice to
the defendant for a sum of Rs.22 lakhs (approx.) out of which the
principal amount is of Rs.17.83 lakhs (approx.). He has further
deposed that he has filed the pre-mediation proceedings in the suit and
the name of M/s Hootry in the pre-mediation proceedings was
mentioned. He has admitted that he was required to take a sum of Rs.8
lakhs from M/s Hootry which was having a separate GST Number. He
has denied the suggestion that the balance of M/s Hootry was added in
the present suit only for the reason that the claim was time barred. He
has further deposed that he has been asked by the defendant to include
the balance of M/s Hootry in his account, though it was always oral.
9. The witness was confronted with the document Ex.PW1/2 and
asked whether he has given a sum of Rs.2 lakhs to the defendant on
31.03.2020 to which the witness has replied that he has not given that
amount to the defendant, however, he has voluntarily deposed that it is a
part of re-conciliation which they have mentioned in the document. He
has further deposed that he did not know about the transaction of Rs.2
lakhs as the same has been done by his Chartered Accountant. He has
further deposed that he does not know whether any document regarding
reconciliation has been filed on record or not and he could not say
Digitallywithout checking any record as to whether defendant has paid a sum of
signed by
MUKESH
MUKESH KUMAR
KUMAR GUPTA
GUPTA Date:
2024.12.23
16:09:30
+0530 CS (Comm.) No. 298/2023 Dhruv Garg Vs. Mithlesh Sharma Page no. 9 of 30
Rs.2,00,000/- on 31.07.2018. He has further deposed that his answer is
the same as to the payment of Rs.50,000/- on 28.10.2018. He has further
deposed that there was no written agreement regarding 18% as interest on
delayed payment, however, he has mentioned in his legal notice that the
defendant is liable to pay interest @ 18% per annum on delayed
payment. He has admitted that the amount of Rs.50,000/- paid by the
defendant to the plaintiff on 28.10.2018 was adjusted on 29.10.2019 with
M/s Hootry account. He has further deposed that he has not taken any
signature of defendant on the invoices/challans issued to the defendant in
respect of the goods supplied adding voluntarily that as a matter of
practice, he does not take any signature on the invoices from the buyers
of the goods. He has denied the suggestion that the defendant has
returned the goods of Rs.5,12,300/- during the period 12.09.2019 to
15.05.2020. He has voluntarily deposed that the accounts maintained by
the plaintiff in respect of the defendant was naturally and orders were
made by the defendant on phone. He has further deposed that during the
entire transaction with the defendant, there has been instances of
defective items being returned by the defendant against which there used
to be either replacement or changing of the goods. He showed lack of
knowledge regarding the GST return of one year being filed by stating
that his balance sheet and ITR shows the outstanding amount against the
defendant. He has denied the suggestion that he has not filed any
balance sheet on record because he did not have to take any money from
the defendant.
10. No other witness was examined by the plaintiff and the evidence of
Digitally signed the plaintiff was closed by the statement of AR on 30.04.2024.
MUKESH by MUKESH
KUMAR GUPTA
KUMAR Date:
2024.12.23
GUPTA 16:09:37
+0530CS (Comm.) No. 298/2023 Dhruv Garg Vs. Mithlesh Sharma Page no. 10 of 30
(F) DEFENDANT’S EVIDENCE :-
11. The defendant in its defence examined two witnesses, one its
proprietor Ms. Mithlesh Sharma as DW1 and other Shri Vaibhav
Sharma, her son-in-law as DW2.
12. DW1 Ms Mithlesh Sharma, tendered her evidence by way of
affidavit Ex.DW1/A and reiterated the contents of the Written Statement
on oath and emphasized more on the payment being made on the basis of
invoices on lump sum basis. She has deposed that the plaintiff has
wrongly included in the suit a sum of Rs.8,76,904/- shown as amount
receivable from M/s Hootry on the ground that the plaintiff was also
doing the business with that firm and she has denied that she has another
firm in the name of M/s Hootry. She got exhibited the ledger account
of the defendant as Ex. DW1/1 (Colly), Five Goods Returned Memos as
Ex. DW1/2 (colly) and copy of Bank Statement of one of its bank namely
Canara Bank as Ex. DW1/3.
13. The witness was subjected to an extensive cross-examination by
Ld. Counsel for the plaintiff, wherein DW1 has deposed that she is
engaged in the business of garments since 2017 and her business with
Dhruv Garments from June 2018. She has admitted that Mr. Aakash is
her son and her son has separate business but added ignorance as to his
business. She has deposed that she is proprietor of M/s Mithali Collection
only and there is no connection with M/s Hoootry and the accounts of her
firm were looked after by her Chartered Accountant. She has denied the
suggestion that her firm and M/s Hootry were being dealt jointly with
Digitally
signed by
M/s Dhruv Garments. She has voluntarily deposed that she was dealing
MUKESH
MUKESH
with the plaintiff directly and she was not placing orders for purchase of
KUMAR
KUMAR GUPTA
Date:
GUPTA 2024.12.23
16:15:35
+0530
CS (Comm.) No. 298/2023 Dhruv Garg Vs. Mithlesh Sharma Page no. 11 of 30
materials on behalf of M/s Hootry.
14. The witness when confronted with the document Ex.DW1/1 i.e.
Ledger Account of defendant and asked as to whether some of the goods
were purchased for Hootry account as mentioned in this ledger and their
payments were made from the account of M/s Hootry, denied the same.
Similarly, the witness was again confronted with the document
Ex.DW1/1 and asked whether the entries encircled in red as marked ‘A’
to ‘D’ i.e. entries dated 17.07.2018, 28.07.2018, 28.10.2018 and
31.01.2019 are the payments against purchase made from Hootry
account were denied. Similarly, the witness has confronted with the
ledger account Ex.PW1/6 of M/s Hootry maintained by the plaintiff in
which the entries stated above are reflected and asked the witness
whether these entries are correct to which the witness has replied in
negative. She has denied the suggestion that they were maintaining
both the accounts of M/s Hootry and M/s Mithali Garments. She has
also denied the suggestion that she has merged the accounts of Mithali
Collection and Hootry in one ledger of plaintiff on the pretext that M/s
Hootry is going to be closed due to some reasons. She has denied the
suggestion that she insisted the plaintiff to transfer the outstanding
balance of Rs. 8,76,904/- to the plaintiff firm for some smooth
Digitally
MUKESH
signed by
MUKESH
KUMAR
accounting. She has further denied the suggestion that she has cleared
KUMAR GUPTA
GUPTA Date:
2024.12.23
16:09:52
+0530
outstanding bills of Mithali Collection as well as M/s Hootary after
31.03.2021. She has admitted that plaintiff used to call her through
telephone as well as WhatsApp for payment of M/s Mithali Collection.
She has also denied the suggestion that plaintiff also used to call her for
outstanding payment of M/s Hootry.
CS (Comm.) No. 298/2023 Dhruv Garg Vs. Mithlesh Sharma Page no. 12 of 30
15. The witness was confronted with the document Ex.DW1/P-1, the
print out of WhatsAapp chat between plaintiff and one Akash, stated to
be son of defendant on mobile Number 9911999683 and asked as to
whether ledger account of M/s Hootry or M/s Mithali Collections is joint
and demand of payment was made by the plaintiff to which the witness
has denied, however, the mobile number of the WhatsApp Chat has been
admitted. She has admitted that she has made payment of Rs.13 lakhs to
the plaintiff from 01.04.2021 to 09.07.2021 and she has made payment
excess of outstanding of M/s Mitali Collection but denied the suggestion
that the aforesaid excess payment was made to clear the outstanding
payment of M/s Hootry. Witness has also been confronted with the
document Ex.DW1/2 and asked as to whether any signature has been
depicting on the documents as acknowledgement of receiving to which
the witness has denied. She has deposed that the document Ex.DW1/2
has been sent through the person who used to bring material of the
plaintiff. She has deposed that she has not placed on record any
document to show that any e-mail, letter, whatsApp chat has been
written or that these documents have been sent. She has also denied the
suggestion that the documents Ex.DW1/2 are forged and fabricated and
being the fabricated once and therefore not recorded in defendant’s
ledger account.
16. The witness has also been confronted with the document
Ex.DW1/1 and asked as to whether as on date any amount is payable to
the plaintiff to which witness has denied but deposed that the balance
shown on 21.03.2022 is Rs. 5,71,806/52ps. She has admitted that she
Digitally
used to make payment on lump sum basis and not on bill to bill basis.
signed by
MUKESH
MUKESH KUMAR
KUMAR GUPTA She has denied the suggestion that they have not made the payment to
GUPTA Date:
2024.12.23
16:09:59
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CS (Comm.) No. 298/2023 Dhruv Garg Vs. Mithlesh Sharma Page no. 13 of 30
the plaintiff despite receiving the material from the plaintiff. She
deposed that she cannot say that the plaintiff used to maintain account
of M/s Hootry as well as M/s Mithali Collection and due to this some
accounting entries were placed on different dates and different accounts
after reconciliation. She has voluntarily deposed that she has made
payment of Rs.2 lakhs, on 31.07.2018 through online from Canara bank,
another payments of Rs.50,000/- each in the month of October, 2018 and
December, 2018 and denied the suggestion that the payment of Rs. 2
lakhs on 31.07.2018 and Rs.50,000/- on 29.10.2019 were made by her in
the accounts of M/s Hootry reiterating voluntarily that she is concerned
with Mithali collections only. She has denied the suggestion that she has
received a supply of goods worth Rs.6,30,147/- on 30.07.2021 and
Rs.4,59,976/- on 31.07.2021 from the plaintiff. Though she cannot
specify the exact amount of payment made after 31.03.2021 but stated
that as and when there used to be a demand from the plaintiff, she used
to pay the same adding that the exact amount can only be informed by
her CA. She has also denied the suggestion that her son Aakash also had
dealing with the plaintiff qua the business of Mitali Collection and M/s
Hootry. She has denied the suggestion that plaintiff used to call and
message Aakash for reminding of payment of both accounts of M/s
Mithali and M/s Hootry.
17. DW2 Sh. Vaibhav Sharma, son in law of the Ms. Mithlesh Sharma
has been examined as DW2 who has tendered his examination-in-chief
by way of affidavit as Ex. DW2/A. He has deposed that he is aware of
the sale and purchase transactions between the plaintiff and the defendant
and is involved in the conversation in regard to business dealings
Digitally signed
MUKESH
KUMAR
by MUKESH
KUMAR GUPTA
Date:
between plaintiff and the defendant from the beginning till date. He has
2024.12.23
GUPTA 16:10:10
+0530 CS (Comm.) No. 298/2023 Dhruv Garg Vs. Mithlesh Sharma Page no. 14 of 30
deposed that M/s Hootry has been a separate firm with its own GST
registration number and dealings between plaintiff and M/s Hootry has
no bearing on the defendant and since M/s Hootry has been closed and
amount receivable if any from M/s Hootry was beyond the statutory
period of limitation being time barred. He has deposed that the plaintiff
has deliberately included the sum of Rs.8,76,904/- in the amount shown
receivable from the defendant. He has further deposed that defendant has
returned goods to the tune of Rs.5,12,300/- to the plaintiff on account of
supply of bad quality but the credit for the same has not been given by
the plaintiff to the defendant despite repeated requests made by the
defendant. He has further reiterated that plaintiff has not given credit of
certain payments made by the defendant which proved that the suit of the
plaintiff is false and bogus. He has further deposed that the defendant
has never requested the plaintiff that the amount of Rs.8,76,904/-
relating to M/s Hootry may be transferred and shown as outstanding from
him in the books of the plaintiff.
18. During cross-examination, the witness has deposed that after
demise of husband of defendant Ms. Mithlesh Sharma, he used to help
her for technical or operational basis. He has denied the suggestion that
Smt. Mithlesh Sharma is also running business in the name of M/s
Hootry as M/s Hootry is run by Mr. Gagan Sharma who is her son. He
has admitted that the shop of M/s Hootry and defendant firm are situated
in a same building on different floors. He has deposed that the son of
Ms. Mithlesh Sharma, Shri Aakash Sharma always busy in his job. He
has denied the suggestion that Shri Aakash Sharma was actually involved
Digitally
MUKESH
signed by
MUKESH
KUMAR
in the business of M/s Hootry and with the defendant also and his mobile
KUMAR GUPTA
number is 9911999683, again said: 9717464547.
Date:
GUPTA 2024.12.23
16:10:18
+0530
CS (Comm.) No. 298/2023 Dhruv Garg Vs. Mithlesh Sharma Page no. 15 of 30
19. The witness has confronted with the WhatsApp chat Ex.DW2/X-1
showing the name of Aakash Ji with Mobile No. 9717464547 and asked
as to whether the aforesaid Aakash Sharma is asking for payment from
the AR of the plaintiff to which the witness has replied that he did not
know anything for the same and seen the same for the first time.
20. No other witness was examined by the defendant and the evidence
of the defendant was closed vide statement dated 27.11.2024.
(G) ARGUMENTS ADDRESSED: -
ARGUMENTS OF PLAINTIFF.
21. Ld. counsel for the plaintiff Shri Rajeev Chauhan has vehemently
argued that the present case is a case based on the supply of readymade
garments by the plaintiff to the defendant to which the defendant has
made on account part payment from time to time leaving a balance
payment of Rs. 17,83,498 which is to be recovered. It has been argued
that the plaintiff was doing business with the two firms related with
defendant, out of which one is the defendant’s firm i.e. M/s Mitali
Collection having office at 313/319, Ground Floor, Gali No.6, Tulsi
Nagar, Inderlok, Delhi which is run by its proprietor Ms. Mithlesh
Sharma and second one is M/s Hootry having office at 13/319, Near
Naag Mandir, Tulsi Nagar, Delhi-35 through its proprietor Mr. Gagan
Sharma i.e. son of Mithlesh Sharma. It has also been vehemently argued
that in the last week of March, 2021, the defendant and her son Shri
Gagan Sharma told the plaintiff that M/s Hootry is going to close due to
MUKESH by
Digitally signed
MUKESH
KUMAR GUPTA
KUMAR Date:
some reasons and for the smooth accounting of business, accounts of
GUPTA 2024.12.23both M/s Mitali Collection and M/s Hootry be merged and accordingly
16:10:33 +0530CS (Comm.) No. 298/2023 Dhruv Garg Vs. Mithlesh Sharma Page no. 16 of 30
after merging of both the accounts, at the request of defendant, an
outstanding bill amount of Rs.8,76,9054/- of M/s Hootry had been
transferred in the account book of M/s Mitali Collection on 31.03.2021.
Ld. Counsel has further argued that after merging of the accounts, the
defendant M/s Mitali Collection cleared the outstanding bill amount of
Rs.19,00,000/- from the joint account to the plaintiff leaving the balance
of Rs.17,83,498/- which is outstanding principal amount. Ld. Counsel
has also clarified that entries of Rs.50,000/-, Rs.2,00,000/- and
Rs.3,00,000/- which are not shown in the account books of the plaintiff.
The amount of Rs.50,000/- paid on 28.10.2018 was adjusted on
29.10.2019 with the M/s Hootry’s account and similarly entry of
Rs.2,00,000/- dated 31.08.2018 already credited to M/s Hootry Garments
Ledger on 31.07.2018, however, these entries have been wrongly shown
by the defendant in her ledger. On the contrary, the defendant has shown
her ignorance in his deposition while deposing about the entries of
Rs.50,000/-, Rs.2,00,000/- and Rs.3,00,000/- shown in Hootry account.
It has further been argued that lastly, defendant has made payment of
Rs.1,00,000/- on 30.07.2021 from the merged account and after closing
of the firm M/s Hootry. It has vehemently been argued that the
defendant in her Written Statement has denied the fact of merger of his
son firm M/s Hootry with her firm but witness DW2 Shri Vaibhav
Sharma who used to help the defendant who has deposed that address of
both the firms is of the same building but their floor is separate and the
witness has shown his ignorance about the WhatsApp chat Ex.DW2/X-1
between Shri Akash, proprietor of M/s Hootry and Shri Chirag Garg, the
AR of the plaintiff. Finally, it has been prayed that the defendant is
liable to pay the outstanding amount of good supplied to her alongwith
Digitally signed
by MUKESH
MUKESH KUMAR
GUPTA
KUMAR Date:
GUPTA
accrued interests & costs.
2024.12.23
16:10:40
+0530CS (Comm.) No. 298/2023 Dhruv Garg Vs. Mithlesh Sharma Page no. 17 of 30
ARGUMENTS OF DEFENDANT:
22. Ld. Counsel for the defendant Shri M.P. Arora has vehemently
argued that the suit filed by the plaintiff is not only false and vexatious
but also barred by limitation in as much as the plaintiff has deliberately
and with ulterior motives shifted the time barred outstanding balance of
Rs.8,76,904/- which was due from a different proprietorship firm M/s
Hootry on 01.04.2020 to the account of the defendant just to save the
limitation. Ld. Counsel has further argued that M/s Mitali Collection
and M/s Hootry are two different proprietorship firm of the defendant
and her son Gagan Sharma respectively having separate GST number and
are different legal entities which cannot be merged under the law. It has
further been argued that the defendant has never requested or insisted to
transfer the outstanding balance of M/s Hootry to the account of the
defendant firm M/s Mitali Collection, on the pretext that M/s Hootry was
going to be closed soon. It has been stated that even if it was desired, it
was not legally possible. It has been stated that though the proprietors of
these two firms may be related to each other but that does not extinguish
the legal entity of another. Ld. Counsel for defendant has gone on to the
extent of stating that even if it is presumed though not admitted that M/s
Hootry had an outstanding balance the liability qua the aforesaid firm
cannot be transferred to the defendant or her firm and any relief in this
respect qua his debt could not be given in the absence of the aforesaid
proprietorship firm being made a party to the suit. He has relied upon
the provisions of order I Rule 9 CPC to argued that the suit is bad for
non-joinder of necessary party and also relied upon the pronouncement
of law laid down in 2004 (115) DLT 471 titled Miraj Marketing
Digitally
Corporation Vs. Vishakha Engineering & Anr. to plead that the
signed by
proprietorship firm has no separate legal entity and can only sue or be
MUKESH
MUKESH KUMAR
KUMAR GUPTA
Date:
GUPTA 2024.12.23
16:10:47
+0530 CS (Comm.) No. 298/2023 Dhruv Garg Vs. Mithlesh Sharma Page no. 18 of 30
sued through its proprietor. Ld. Counsel has further argued that the suit
of the plaintiff is even bad for mis-joinder of cause of action in as much
as Order 2 Rule 3 CPC clearly prescribes that more than one of cause of
action can be joined only when the same are against one defendant which
is not the case herein. Ld. Counsel for defendant has also gone on to
challenge the authority of Shri Chirag Garg the AR of the plaintiff to file
the suit or deposed on behalf of the plaintiff besides challenging the
legality of statement of account filed by the plaintiff being hit by Section
34 of the Indian Evidence Act, while relying upon the judgment of
Hon’ble Supreme Court in AIR 1967 SC 1058 titled Chanderdhar
Goswami and Anr. Vs. The Gauhati Bank Ltd. to say that mere
entries in the books of accounts are not sufficient to charge anyone with
liability unless correctness entries are admitted.
23. Ld. Counsel has further argued that even otherwise the entries
shown by the plaintiff in the statement of account are not correct as the
plaintiff has not given due credit to some of the payments made by the
defendant on 28.10.2018 and 14.12.2018 besides showing certain entries
which were shown without any payment. Ld. Counsel has stated that
besides the aforesaid, the defendant has returned defective goods worth
of Rs.5,12,300/- against which no credit has been given. Ld. Counsel has
stated that the total outstanding as per his books of accounts on
31.03.2022 is merely Rs.5,71,806.52ps and after adjustment of the goods
returned only a minor sum is due and outstanding. Finally, he has denied
the receipt of material from the plaintiff on 30.07.2021 and 31.07.2021
worth Rs.6,30,147/- and Rs.4,59,976/- respectively, and prayed for
Digitally signed
MUKESH by MUKESH
KUMAR GUPTA
KUMAR Date:
dismissal of the suit with exemplary costs.
GUPTA 2024.12.23
16:11:05 +0530CS (Comm.) No. 298/2023 Dhruv Garg Vs. Mithlesh Sharma Page no. 19 of 30
ANALYSIS & DETERMINATION: –
24. I have heard the arguments addressed by the Ld. Counsels for the
parties, perused the entire record and have given a thoughtful
consideration to the same. My issue-wise determination is as under: –
ISSUE No.1: “Whether the defendant has returned goods worth Rs.5,12,300/- to the plaintiff as they
were of inferior quality. If so, the effect thereof? OPD?”
25. The onus to prove this issue was held upon the defendant who has
taken a defence in para No.8 of the Written Statement stating that the
plaintiff has not allowed the credit of Rs.5,12,300/-which was the amount
of goods returned by the defendant to the plaintiff on account of poor
quality and damaged products. This has been specifically refuted by the
plaintiff in its replication. The defendant on its part has relied upon the
testimony of his witnesses DW1 Ms. Mithlesh Sharma and DW2 Shri
Vaibhav Sharma besides relied upon 5 Goods Return Memos for the
period between 12.09.2019 and 15.05.2020 Ex.DW1/2 (colly) which are
drawn by the defendant’s firm on its letter head, under her signature. It
may be seen that these so called goods return memos are neither
addressed to anyone nor mentions any reasons for such return. The same
even does not mention the signature of any person acknowledging the
receipt of the so-called goods returned. Ld. Counsel for defendant has
tried to rely upon the cross-examination of PW1 to say that since the sale
invoices relied upon by the plaintiff also do not carry any
acknowledgment, the same parity should be applied to the defendant’s
document. However, since the return of goods has been categorically
been denied, it is for the defendant to prove the same by succinct and
Digitally
signed by
clear evidence. Admittedly, there is neither any communication with
MUKESH
MUKESH KUMAR
KUMAR
GUPTA
GUPTA
Date: respect to the aforesaid goods being defective and returned by the
2024.12.23
16:11:32
+0530
CS (Comm.) No. 298/2023 Dhruv Garg Vs. Mithlesh Sharma Page no. 20 of 30
defendant to the plaintiff nor the same has been shown in the statement of
account Ex.DW1/1 relied upon by the defendant itself. Interestingly, as
per its own defence and admitted case, the defendant was making
payment on lump-sum basis (on account from time to time against the
demand and even the demand has paid a huge amount of Rs.19 lakhs
between the period 01.04.2021 uptil 21.03.2022 and if the goods were
defective or returned at least it was reasonably expected for the defendant
to ask for such adjustment of Rs.5,12,300/- which is in respect of goods
of 2019-2020. Even if the best case of the defendant is taken that the
same was not asked for, since it was an open mutual and running account,
even then there is no such entry of these goods being returned in the
statement Ex.DW1/1. The defendant has admittedly failed to file his
GST returns (or GST R-1 form) which could have at least reflected the
aforesaid entry. In the absence of any clear and cogent evidence in this
regard and taken on the yardstick of preponderance of probability, the
court is of the considered view that the defendant has failed to discharge
the onus in respect of this issue. The issue is liable to be decided against
the defendant and in favour of the plaintiff. Before parting this issue, it
could be important to refer to the stand of parity being taken by the
defendant in respect of acknowledgment, however, when Ex.DW1/2 is
compared to Tax Invoices/bills of the plaintiff Ex.PW1/3 and Ex.PW1/4,
the same clearly shows not only the name of buyer the invoice number
but also the e-way bill number showing a clear movement of goods from
plaintiff to defendant. Compared thereto, the defendant has failed to
mention the name of the person who has taken these goods for return or
the vehicle/lorry number through which the same were returned, even by
way of oral evidence and the defendant during her cross-examination has
merely deposed that Ex.DW1/2 has been sent through the person who
Digitally signed
MUKESH by MUKESH
KUMAR GUPTA
KUMAR Date:
2024.12.23
GUPTA 16:11:49
+0530 CS (Comm.) No. 298/2023 Dhruv Garg Vs. Mithlesh Sharma Page no. 21 of 30
used to bring the material of plaintiff while admitting that there is no e-
mail or even WhatsApp in respect of the fact that these documents
(Ex.DW1/2 ) have been sent. In view of aforesaid discussion, this issue
is, accordingly decided against the defendant and in favour of the
plaintiff.
Issue no.2: “Whether the plaintiff is entitled to recovery of the suit amount of Rs. 22,79,892/- from the
defendant? OPP.
26. The onus of proving this issue is held upon the plaintiff and this
issue is pivotal to the entire controversy between the parties. This issue
arises on the basis of the averments made by the plaintiff in the plaint
seeking recovery of Rs.17,83,498/- as principal amount outstanding as on
31.03.2022 against the supply of readymade garments to the defendant
alongwith pre-suit interest of Rs.4,96,394/- @ 18% per annum from the
date of outstanding bill uptil filing of the suit. The plaintiff has relied
upon his testimony as PW1 besides relying upon the statement of account
for the period 01.04.2017 to 31.03.2022 as being maintained as open
mutual and current account showing reciprocal demand and payments.
The statement of Account Ex.PW1/2 also includes the outstanding
balance of Rs.8,76,904/- which pertains to another proprietorship namely
M/s Hootry belonging to defendant’s son Shri Gagan Sharma. The case
of the plaintiff is the aforesaid amount was merged at the request of the
defendant on the pretext that M/s Hootry has been merged and it would
be easier to deal with the same for accounting purposes. The plaintiff has
even gone on to rely upon the statement of account of the defendant
Ex.DW1/1 to show that the purchases made by M/s Hootry as per
statement of account Ex.PW1/6 has itself been shown by the defendant in
Digitallythe statement Ex. DW1/1 of M/s Mitali Collection, more particularly, the
signed by
MUKESH
MUKESH KUMAR
KUMAR GUPTA
GUPTA Date:
2024.12.23
16:12:52
+0530
entries dated 17.07.2018 and 28.07.2018. The plaintiff has even relied
CS (Comm.) No. 298/2023 Dhruv Garg Vs. Mithlesh Sharma Page no. 22 of 30
upon certain on account payments being made by the defendant towards
the liability of M/s Hootry in his books of accounts. The defendant has
vehemently refuted the same to be legally impermissible besides taking a
stand that the defendant has nothing to do with the liability of M/s Hootry
which was a separate legal entity.
27. The law relating to merger of a proprietorship firm with another
proprietorship firm or shifting of its liability is clear in as much as a sole
proprietorship by its very nature is a business enterprise that is owned
and control by one person who possesses the entire authority and
responsibility with respect to the business. The proprietor can hire
employees and manage the business of the proprietorship firm, the way
he/she likes but the legal responsibility for the obligation of the business
is only of the sole proprietor. By its very nature, the obligations and
rights of one proprietorship firm cannot be transferred to another
proprietorship firm unless its assets, machinery, products and customer
lists used for marketing is transferred completely to another sole
proprietorship firm and that too by way of an express agreement between
the transferor proprietorship firm and the transferee firm. NCLT Delhi in
Company Petition No. 322/2023, (DOD 01.12.2023) SVS Marketing
Vs. Sanitaryware Pvt. Ltd. has held that the sole proprietorship firm or
the individual proprietor cannot be compared to a company under section
2 (20) of the Companies Act, 2013 and a merger or amalgamation of a
proprietorship firm is not permissible u/s 232 of the Companies Act,
2013.
28. Applying the aforesaid preposition of law to the facts of the case, it
Digitallymay be seen that the defendant has clearly denied any such merger or
signed by
MUKESH
MUKESH KUMAR
KUMAR GUPTA
Date:
GUPTA 2024.12.23
16:12:59
+0530 CS (Comm.) No. 298/2023 Dhruv Garg Vs. Mithlesh Sharma Page no. 23 of 30
transfer of M/s Hootry assets or accounts with the defendant’s firm at any
point of time. Though the proprietor of both the firms are related to each
other but the same does not extinguish the legal entity of one firm.
Though both firms may be operating from the same address and may be
into the same business and further may be also in business relationship
with the plaintiff but the identity of both these firms are distinct and
legally separated which is also reflected from different GST numbers
being maintained by both the firms. While M/s Mitali Collections, the
proprietorship firm of defendant has GST No. 07AZJPS5416Q1ZK, M/s
Hootry, her son Shri Gagan Sharma’s firm has GST No. 07HNTPSW
1591H1Z6. Separate commercial relations with the aforesaid two firms
and the plaintiff has been clearly reflected from the tax invoice/bills
Ex.PW1/3 and 4 (Mitali Collection) and Ex.PW1/7 to Ex.PW1/16 (M/s
Hootry). The plaintiff has even maintained a separate ledger account in
respect of M/s Hootry as per Ex.PW1/6 which is a statement of account
of the plaintiff between 01.04.2017 and 31.03.2023. The deposition of
DW1 in this regard is clear and categoric and has not been breached
during the cross-examination. Even if, it is presumed that the defendant
has shown certain payments and sales of M/s Hootry, the same does not
legally create any right in favour of the plaintiff to transfer the
outstanding balance of M/s Hootry to the defendant’s proprietorship firm,
more so, when there is absolutely no written or express agreement to do
so between the plaintiff, the defendant and the proprietor of M/s Hootry.
Admittedly, M/s Hootry is not a party before the court nor has entered the
witness box to support either the case of plaintiff or refute the same. The
liability qua M/s Hootry cannot be enforced against the defendant in such
circumstances and in absence of any clear or categoric agreement for the
same between the three parties necessary to regulate their rights and
Digitally
signed by
MUKESH
MUKESH KUMAR
KUMAR GUPTA
Date:
GUPTA 2024.12.23 CS (Comm.) No. 298/2023 Dhruv Garg Vs. Mithlesh Sharma Page no. 24 of 30
16:13:07
+0530
liabilities.
29. Now adverting to the issue of entitlement, the court shall first take
up the issue of limitation which is a legal issue, which the court is
required to determine for the purpose of deciding the entitlement of
plaintiff to the relief claimed. As per Section 3 of the Limitation Act,
1963, any suit, application or appeal has to be filed within the period of
limitation as prescribed under the schedule annexed to the Limitation Act
and subject to provisions contained in Section 4 to 24. This has to be
done irrespective of the fact whether limitation has been set up as a
defence or not. It is a settled proposition of law that law of limitation is a
law of repose, peace and justice which bars the remedy after the lapse of
particular period by a public policy and expediency. Reliance is placed
on AIR 1991 Kerala 83 Craft Centre V. Koncherry Coir Factories.
As per Article 1 of the Schedule annexed to the Limitation Act, 1963 the
period of Limitation is 3 years from the close of the year in which the last
item is admitted or proved and entered in such account. The amount of
invoices have been corroborated with the statement of accounts which
shows the credit and the debit entries of the amount in respect of the
invoices raised against the supply of readymade garments to the
defendant. It may be seen that the present suit is for recovery of amount
outstanding against the defendant for the invoices/bills raised by the
plaintiff company against the defendant in respect of the supply of the
readymade garments. The case of the plaintiff is based on invoices/bills
Ex. PW1/3, Ex. PW1/4 and E-way Bills Ex. PW1/6 – Ex. PW1/17 raised
during the period 01.04.2017 to 31.03.2023 pursuance to the supply of
readymade garments by the plaintiff to the defendant and statement of
accounts/ledger Ex. PW1/2 for the period 01.04.2017 uptil 31.03.2023.
Digitally signed
MUKESH by MUKESH
KUMAR GUPTA
KUMAR Date:
2024.12.23
GUPTA 16:13:14
+0530 CS (Comm.) No. 298/2023 Dhruv Garg Vs. Mithlesh Sharma Page no. 25 of 30
The statement of account contains the entries of the credits and debits of
the payments/ transactions taken place between the plaintiff and the
defendant, which is a mutual and running account for which the plaintiff
has raised invoices. The first invoice raised by the plaintiff upon the
defendant is of dated 10.06.2018 and the last invoice is of dated
11.01.2023. The present suit has been filed by the plaintiff on
09.02.2023. Therefore, as per Article 1 of the Limitation Act, the present
suit having been filed on 09.02.2023 is well within the period of
limitation.
30. Now adverting to the remaining part of the entitlement of the
plaintiff to the suit amount claimed. The plaintiff has relied upon not
only the statement of account Ex.PW1/2 but also the connected invoices
in respect of the outstanding payment Ex.PW1/3 and Ex.PW1/4 which
not only shows the supply of goods to the defendant but also clearly
mentions the e-way bill number and even the GST R-1 form Ex.PW1/5
which has been filed on record. The defendant during cross-examination
has clearly admitted the business relationship and supplies of garments
being made by the defendant with the plaintiff from time to time and
during the course of arguments Ld. Counsel for the defendant has
brought to the notice of the court that the business between the plaintiff
and the defendant during the period 10.06.2018 and 31.03.2022 was to
the tune of more than Rs.3 crores against which time to time on account
payments have been made. Though, the defendant has tried to refute the
supplies being made by the defendant on 30.07.2021 for a sum of
Rs.6,30,147/- and 31.07.2021 for a sum of Rs.4,59,976/- , however, the
same has been duly proved by the plaintiff by way of its invoices/bill
Digitally signedEx.PW1/3 and Ex.PW1/4 which even mentions not only the name of the
by MUKESH
MUKESH KUMAR
GUPTA
KUMAR Date:
GUPTA 2024.12.23
16:13:24
+0530 CS (Comm.) No. 298/2023 Dhruv Garg Vs. Mithlesh Sharma Page no. 26 of 30
buyer its GST number, the invoice number but also the e-way bills
through which such supplies were made. Contrary to the aforesaid, the
defendant has failed to bring any succinct evidence rebutting or
controverting the same.
31. Finally, adverting to the certain amounts and entries being made
disputed by the defendant in Statement of Account of the plaintiff
Ex.PW1/2, when compared to his statement of account Ex.DW1/1. The
same are entries of Rs.2,00,000/- on 31.07.2018, two entries of
Rs.50,000/- thousand each on 28.10.2018 and 14.12.2018, one entry of
Rs.3,00,000/- on 24.09.2018 and finally, one entry of Rs.3,00,000/- on
11.12.2018. The plaintiff has not only clarified these entries in its
replication but also during the course of arguments, stating that these
entries have been reflected in the account of plaintiff on different dates
due to NEFT Payment method and have been given due credit after
reconciliation to the defendant for each entry and all payments made by
the defendant has been reflected in finality with nothing remain disputed.
The same finds its due reflection in Ex.PW1/2 when compared to
Ex.DW1/1 which is the statement of account of the defendant.
32. Thus, on the basis of aforesaid discussion and findings of the court
and taken on the yardstick of preponderance of probabilities, the court is
of the considered opinion that the plaintiff has been successful in
established its entitlement to the outstanding principal amount except the
amount of Rs.8,76,904/- pertaining to the liability of another
proprietorship firm namely M/s Hootry. Deducting this amount and
Digitally signed
MUKESH by MUKESH
KUMAR GUPTA
KUMAR Date: calculating the outstanding on the basis of Statement of Account
GUPTA 2024.12.23
16:13:31 +0530
Ex.PW1/1, the plaintiff shall accordingly be entitled to a sum of
CS (Comm.) No. 298/2023 Dhruv Garg Vs. Mithlesh Sharma Page no. 27 of 30
Rs.9,06,594/- as principal amount outstanding against the defendant. The
aspect of interest component shall be dealt with in the determination of
issue No.3. This issue is accordingly decided partly in favour of the
plaintiff and partly against the defendant to the extent discussed above.
Issue no.3: “Whether the plaintiff is entitled to any interest from the defendant, if so, at what rate and
for what period? OPP”
33. The onus of proving this issue was also held upon the plaintiff
who has claimed a pre-suit interest of Rs.4,96,394/- @ 18% per annum
on the principal amount of Rs.17,83,498/- besides an interest @ 18% per
annum on the outstanding amount pendentlite and future. As already
discussed, there is no stipulation of interest component of 18% per
annum either in the invoices Ex.PW1/3 and Ex.PW1/4 or even on
Ex.PW1/7 to Ex.PW1/16. There is nothing on record to suggest that any
such stipulation was ever made or even proposed between the parties. In
the absence of any agreement to show the same, the court shall be left
with no option but to advert to the provisions of section 34 of CPC and
provisions of Interest Act since the amount is outstanding. However,
Hon’ble Supreme court in a number of judgments reported as Pt.
Munshi Ram @ Associates (P) Lt. Vs. DDA, 2010 SCC Online Delhi
2444, Rajendra Construction Co. Vs. Maharashtra Housing & Area
Development Authority and others, 2005 (6) SCC 678, McDermott
International Inc. Vs. Burn Standard Co. Ltd. and others, 2006 (11)
SCC 181, Rajasthan State Road Transport Corporation Vs. Indag
Rubber Ltd., (2006) 7 SCC 700, Krishna Bhagya Jala Nigam Ltd.
MUKESH by
Digitally signed
MUKESH
KUMAR GUPTA
KUMAR Date:
Vs. G. Harischandra, 2007 (2) SCC 720 & State of Rajasthan Vs.
GUPTA 2024.12.23
16:13:39 +0530
Ferro Concrete Construction Pvt. Ltd. (2009) 3 Arb. LR 140 (SC)
has repeatedly mandated that courts must reduce the high rates of interest
on account of the consistent fall in the rates of interest in changed
CS (Comm.) No. 298/2023 Dhruv Garg Vs. Mithlesh Sharma Page no. 28 of 30
economic scenario. Under the facts and circumstances of the case,
keeping in view the nature of transactions of the case and the aforesaid
settled law as also the determination on issue No. 2, this court is of the
considered opinion that interest of justice would be met, if an interest @
7.5% per annum is granted to the plaintiff on the principal outstanding
amount of Rs.9,06,594/- w.e.f. 01.04.2022 i.e. the day after the closure of
the last financial year on which the amount was shown due and
outstanding till the date of its realization which will automatically
include pre-suit, pendentlite and future interest. This issue is,
accordingly decided in favour of plaintiff.
CONCLUSION:-
Issue No. 4: “Relief”
34. In view of the aforesaid discussions and finding of this court on the
aforesaid issue, the court is of the considered opinion that the plaintiff
has been able to successfully prove its entitlement to the recovery against
the defendant. The suit of the plaintiff is, accordingly decreed against the
defendant for a sum of Rs. 9,06,594/-. The plaintiff shall also be entitled
to a simple interest @7.5% per annum w.e.f. 01.04.2022 till its
realization which will automatically include pre-suit, pendentlite and
future interest.
MUKESH by
Digitally signed
MUKESH
KUMAR GUPTA 35. In the specific facts and circumstances of the case, the plaintiff shall
KUMAR Date:
2024.12.23
GUPTA
also be entitled to the costs of the suit throughout.
16:13:47
+0530
36. Decree sheet be drawn accordingly.
CS (Comm.) No. 298/2023 Dhruv Garg Vs. Mithlesh Sharma Page no. 29 of 30
37. File be consigned to record room after due completion.
PRONOUNCED IN OPEN COURT. Digitally signed
MUKESH by MUKESH
On this 23rd December, 2024 KUMAR GUPTA
KUMAR Date:
2024.12.23
GUPTA 16:14:06
+0530
(MUKESH KUMAR GUPTA)
DISTRICT JUDGE (COMM. COURT)-07
CENTRAL/DELHI (pk)
CS (Comm.) No. 298/2023 Dhruv Garg Vs. Mithlesh Sharma Page no. 30 of 30