Delhi District Court
M/S Global Medikit Limited vs M/S Zeus Healthcare India on 25 March, 2025
BEFORE THE COURT OF SH. SURINDER S. RATHI, DISTRICT JUDGE
(COMM.)-11 CENTRAL, THC, DELHI
CS Comm. No.118/2024
M/s Global Medikit Limited
Through its Authorised Signatory
Shio Prakash Singh
Registered Office at:
3, Dr. G.C. Narang Marg, Delhi-110007
Also at:
Khasra No. 323 (MI) Camp Road,
Selaqui, Dehradun, Uttrakhand-248197 ..............Plaintiff
Vs.
M/s Zeus Health Care India
Through its Proprietor
Ms. Pooja Dhingra
Office at : 182, F.F. DDA Office Complex,
Opp. Videocon Tower, Jhandewalan, Delhi-110055
Also at: B-966/1, B-Block,
Shastri Nagar, Delhi-110052 ...........Defendant
Date of Institution : 19.01.2024
Date of Final Arguments : 25.03.2025
Date of Judgment : 25.03.2025
Decision : Decreed
Judgment
1.
This suit seeks recovery of Rs.39,30,349/- (revised after including pre-suit
interest) from Rs. 26,13,264/- alongwith interest @ 18% per annum as
unpaid dues of goods supplied.
Case of the Plaintiff
2. Case of the plaintiff as per amended plaint is that it is a duly incorporated
company at (Civil Lines area) Delhi and is engaged in business of
CS Comm No.118/2024 page 1
M/s Global Medikit Vs. M/s Zeus Healthcare India
manufacturing and export of medical disposables. Plaint is filed through
its AR who is Senior Manager Sales. In the course of business in 2016
defendant Ms. Pooja Dhingra who is proprietor of M/s Zeus Healthcare
India at Jhandewalan, Delhi approached plaintiff for appointment as its
super distributor. She assured the plaintiff company that she has years of
experience in the same field and would increase the sales of the plaintiff’s
products. Relying on these assurances defendant was appointed as super
distributor for Delhi NCR and Haryana as per agreement dated
01.08.2016. It was agreed that all payments of the products supplied
during the course of month would be paid by 7th of very next month or
else interest @12% would be applied.
3. Under the agreement defendant deposited a sum of Rs.7 lakhs as
refundable security upon which plaintiff was to pay an interest @6%.
Thereafter, plaintiff started supplying goods to the defendant against
invoices and maintained an open running account qua the same. It is
pleaded that last transaction gtook place between the parties on
31.03.2021 when defendant returned some unsold inventory qua which
some credit note was issued by the plaintiff. As per plaintiff’s ledger there
was a debit balance of Rs.34,54,871/- as on 01.04.2021, the plaintiff
adjusted the security amount of Rs. 7 lakhs alongwith its accumulated
interest i.e. a total of Rs.8,41,607/- which brought down the debit balance
to Rs.26,13,264/-.
4. Plaintiff requested the defendant to clear the above dues but when the
defendant did not pay any heed legal notice dated 13.06.2022 was issued
but the same was neither replied nor complied. Corrigendum legal notice
dated 12.08.2022 was also issued. Plaintiff calculated pre-suit
interest@18% per annum. Plaintiff approached Central DLSA for Pre-
Institution Mediation under Section 12A of Commercial Courts Act,
CS Comm No.118/2024 page 2
M/s Global Medikit Vs. M/s Zeus Healthcare India
2015 on 09.09.2022 where defendant did not participate and Non-Starter
Report dated 06.01.2023 was issued. In this backdrop suit in hand was
filed for following reliefs:
Prayer:
i. Pass a money decree of Rs.26,13,264/- along with interest @18% per annum in
favour of plaintiff and against the defendant from the respective due date till
actual date of realization of the said amount.
ii. Cost of the suit may also be awarded in favour of the plaintiff and against the
defendant;
iii. Pass any other decree or order (s) which this Hon’ble Court may deem fit and
proper, under the facts and circumstances of the case in favour of the plaintiff and
against the defendant, in the interest of justice.
5. Summons of the suit was served upon the defendant who entered
appearance through Mr. Rishikesh Dev, Advocate followed by filing of
written statement.
Defendant’s Case
6. Case of the defendant as per WS to the amended plaint is that this suit
deserves to be dismissed as it has been filed by concealing true facts. The
WS is filed by defendant Ms. Pooja Dhingra through her SPA Sh. Ritesh
Dhingra. It is admitted that she is proprietor of M/s Zeus Healthcare. Her
business is handled by her husband/SPA. It is admitted that on 01.08.2016
super distributor agreement was entered between the parties whereunder
plaintiff was supposed to dispatch goods only according to purchase
orders sent by defendant. She was supposed to receive 6% margin money
on net sales. Plaint carries a table disclosing margin money payable by
plaintiff to her for four financial years ending on 31.03.2017, 31.03.2018,
31.03.2019 and 31.03.2020 according to the sales which is calculated at
Rs.1,01,96,077/-. She has also palced on record ledger as well balance
sheet for the years 2016 to 2021.
CS Comm No.118/2024 page 3
M/s Global Medikit Vs. M/s Zeus Healthcare India
7. It is pleaded that she was informed by the plaintiff that margin money of
6% would be paid after 5 years of becoming due on the pretext that the
plaintiff wants loyalty and commitment from the defendant and the
defendant desists from seeking distributorship from the competing brands.
However, defendant did not agitate this claim as she wanted to restart the
business with the plaintiff. It is pleaded that plaintiff is a large enterprise
whereas she is a small time distributor. She denied the liability to pay
debit balance of plaintiff’s ledger of Rs.34,54,871/- as on 01.04.2021. It is
pleaded that as many as four invoices cumulatively valuing Rs.5,73,832/-
between 15.09.2018 to 25.04.2019 whereby goods were returned back to
the plaintiff do not find mention in the plaintiff’s ledger. Upon adjusting
the same the claim amount of Rs.34,54,871/- is shown to be reduced to
Rs.28,81,039/-. E-way bills qua the four invoices have also been
mentioned in the pleadings.
8. It is pleaded that there are several flaws in the plaintiff’s ledger and one
such entry is qua invoice dated 07.09.2020 dated 30.11.2020 which is
shown to be credit of Rs.15,16,581/- even though the invoice is of
Rs.16,17,565/-. It is claimed that the amount of Rs.28,81,039/- deserves to
be reduced by another Rs.1,00,984/- taking the claimable total to
Rs.27,80,055/-. Likewise, another instance is shown qua entry dated
25.12.2020 where there is a mismatch of Rs.1,33,508/- taking the debit
balance to Rs.26,46,547/-.
9. While not maintaining the chronology para 15 of the WS pleads that
defendant paid a sum of Rs. 2 lakhs to the plaintiff on 16.12.2019 through
NEFT but the same is not mentioned in the ledger which brings the
claimed debit balance to Rs.24,46,547/-. Another instance is shown on
01.08.2016 that sum of Rs. 7 lakhs was deposited as refundable security
@6% per annum which is calculated as Rs.8,41,607/- instead of
CS Comm No.118/2024 page 4
M/s Global Medikit Vs. M/s Zeus Healthcare India
Rs.9,00,501/-. Surprisingly, even though plaintiff has given credit of
Rs.8,41,607/- qua the security refund in the suit amount but still by adding
compound interest another sum of Rs.9,00,501/- is sought to be deducted
by the defendant all over again reducing the debit balance to
Rs.15,46,046/-.
10.It is further claimed that after the onset of covid on 31.03.2021
defendant’s business was closed and no transaction took place. During
this period paintiff started doing dealings with defendant’s clients directly.
It is pleaded that a sum of Rs.5,21,096/- payable by clients of the
defendant to her were actually collected by the plaintiff which too
deserves to be deducted from the debit balance bringing it to
Rs.10,24,949/-. Reference is made to certain payments made under C-
Form text for the State of Punjab, Haryana, UP and Rajasthan to the tune
of Rs.5,23,788/- which upon adjustment brings down the debit balance to
Rs.5,01,160/-
11.Defendant claims to have paid towards GST on sale invoices for return
which was to the tune of Rs.3,54,142/- during the FY 2018-19 which
further reduces the claimed debit balance to Rs.1,47,018/-.
12.In her reply on merits, defendant has accepted that she had business
relations with the plaintiff and Superdistributorship Agreement dated
01.08.2016 was entered between them. It is also accepted that business
dealings took place only up to 31.03.2021. She denied her liability to pay
Rs.26,13,264/- with interest i.e. Rs.39,30,349/-.
13.Defendant has denied the receipt of legal notice dated 13.06.2022 and
corrigendum dated 12.08.2022 however no specific reason for denial as
contemplated under Order 8 Rule 3A CPC as amended for commercial
suits is cited. A plea is raised that no receipt is filed even though the same
has been duly filed alongwith the plaint. It is pleaded that no notice for
CS Comm No.118/2024 page 5
M/s Global Medikit Vs. M/s Zeus Healthcare India
pre-institution mediation was received by the defendant. With these pleas
dismissal of the suit is prayed.
14.Separate affidavit of admission and denial is filed on behalf of defendant.
In the affidavit of admission denial defendant has admitted the
Superdistributorshp Agreement dated 01.08.2016 but has denied the
plaintiff’s ledger. Interestingly, even though receipt of legal notice is
denied in the WS via email and whatsapp is admitted and it is akin to
committing offence of perjury.
Replication
15.Separate replication was filed wherein plaintiff reiterated its pleaded case
and denied the averments of the defendant. it is denied by the planitiff that
defendant is entitled to addtional 6% margin money on overall sales other
than the profit margin already included in the discounted wholesale
prices. It is accepted that the plaintiff’s ledger missed out a credit entry of
Rs. 2 lakhs payment dated 16.12.2019. However, neither any correction
was made in the plaintiff’s ledger nor any updated ledger was filed on
record during the course of trial. Plaintiff has denied adjustment of other
claimed sum of money. It is also denied that defendant returned goods
worth Rs.5,73,832/- vide four invoices.
16. In the affidavit of admission and denial to defendant’s documents plaintiff
has not complied with Order 11 Rule 4 (3) CPC as no reasons for denial
has been mentioned. However, an updated affidavit of admission and
denial claimed to have been e-filed where defendant’s ledger, balance
sheet, four return invoices were denied.
17. Out of the pleadings following issues were identified by Ld. Predecessor
on 05.07.2024:
CS Comm No.118/2024 page 6
M/s Global Medikit Vs. M/s Zeus Healthcare India
Issues:
i. Whether the plaintiff concealed true facts / amount already paid by the
defendant and made wrong entries in the ledger and the plaintiff owes huge
amount to the defendant? OPD
ii. Whether the plaintiff and the defendant had agreed that the defendant would
get 6% of the net sales (excluding tax) and the plaintiff may, at any time,
revise its margin depending upon the performance of the defendant or
market conditions, if so, its effect? OPD
iii. Whether the plaintiff failed to pay margin amount of Rs. 1,01,96,077/-, as
detailed in Para No. 8 and 9 of the Preliminary Submissions in the Written
Statement, if so, its effect? OPD
iv. Whether the plaintiff has not accounted the returned goods in the ledger to
the extent of Rs. 5,73,832/-, as detailed in Para No. 12 of the Preliminary
Submissions in the Written Statement, if so, its effect? OPD
v. Whether the plaintiff failed to deduct the amount, as mentioned in Para No.
13, 14 and 15 of the Preliminary Submissions in the Written Statement, if so,
its effect? OPD
vi. Whether the plaintiff has wrongly calculated the amount against security
deposit along with interest at Rs. 8,41,607/- instead of Rs. 9,00,501/-, as
mentioned in Para No. 16 of the Preliminary Submissions in the Written
Statement, if so, its effect? OPD
vii. Whether the plaintiff had asked the defendant to raise bill on the dealers at
prices less than the price negotiated by the defendant in order to offer special
advantage to the dealers, if so, its effect? OPD
viii. Whether the plaintiff dealt with the buyers of the defendant directly and
offered special discounts to them and collected payments directly from the
buyers to the extent of Rs. 5,21,096/-, as mentioned in Para No. 18 of the
Preliminary Submissions in the Written Statement, if so, its effect? OPD
ix. Whether the plaintiff has not deducted an amount of Rs. 5,23,788.35/-
towards C Form Tax and Interest, as mentioned in Para No. 19 of the
Preliminary Submissions in the Written Statement, if so, its effect? OPD
x. Whether the plaintiff has not deducted an amount of Rs. 3,54,142.43/- qua
GST on the sales invoice for goods returned, as mentioned in Para No. 20 of
the Preliminary Submissions in the Written Statement, if so, its effect?OPD
xi. Whether the plaintiff is entitled to a decree for recovery of Rs. 26,13,264/-?
OPP
xii. Whether the plaintiff is entitled to pendente lite and future interest @ 18%
per annum, if so, at what rate and for which period? OPP
xiii. Relief.
Evidence
18. Evidence in this case was ordered to be recorded before Sh. Sahil Singh,
Advocate, Ld. LC as per protocol created by this Court under Order 18
CS Comm No.118/2024 page 7
M/s Global Medikit Vs. M/s Zeus Healthcare India
Rule 4 CPC read with Order 15A Rule 6(l) CPC as applicable to
Commercial suits for the sake of timely disposal of this case.
Plaintiff’s Evidence
19. To prove its case plaintiff company examined PW1 Shio Prakash Singh,
its AR-cum-Senior Manager Sales. Vide affidavit Ex.PW1/A he
deposed on the lines of plaint and exhibited following documents:
i. Copy of certificate of incorporation of plaintiff company is Ex.PW-1/1;
ii. Original board resolution dated 10.06.2022 is Ex.PW-1/2;
iii. Audited ledger account of the defendant maintained by the plaintiff company is
Ex.PW-1/3;
iv. Certificate issued by chartered accountant dated 12.01.2024 verifying the ledger
account of the defendant maintained by plaintiff is Ex.PW-1/4.
v. Certificate under Section 65B of Evidence Act, 1872 is Ex.PW-1/5;
vi. Copy of legal demand notice dated 13.06.2022 is marked as P-1.
vii. The copies of registered postal receipt as well as courier receipt alongwith
tracking report are marked as P-2 (Colly.)
viii.The copy of whatsapp screen shots and email of notice are marked as P-3 (colly.)
ix. The plaintiff has also sent corrigendum to the legal demand notice dated
13.06.2022 correcting the some typographical error on 12.08.2022 the copy of the
same is marked as P-4.
x. The agreement dated 01.08.2022 is already Ex.DW-1/P-1.
20.In his cross-examination done by Ld. Counsel for defendant Sh. Karan
Singh that he is working with the plaintiff company for last around 10
years. He accepted that he has no personal knowledge in this matter and
deposing on the basis of records maintained by the company. He added
that the plaintiff company does not have any specific godown for receipt
of returned goods and the same is received at their factory in Dehradun,
Uttrakhand. Plaintiff company maintains records of all the sales and
receipts. He denied that plaintiff has deliberately not filed goods return
record and GST return of 2018-19. After checking his records he apprised
that no such delivery register is now available. He accepted that email ID
on 4 emails dated 06.01.2017, 20.11.2017, 19.06.2018 and 25.09.2018
Ex.PW1/D1 belongs to the plaintiff company. He denied the suggestion
CS Comm No.118/2024 page 8
M/s Global Medikit Vs. M/s Zeus Healthcare India
that plaintiff company used to compel the defendant to sell goods at a
discounted price.
21.In order to show that plaintiff was already granting 6% margin money to
the defendant the witness has placed on record additional invoices
Ex.PW1/D2. He maintained that plaintiff company gave 6% margin on all
the invoices raised. He accepted that email Id mentinoed in emails
Ex.PW1/D3 and Ex.PW1/D4 belongs to the plaintiff.
22.On the other hand defenndant examined her SPA/her husband Ritesh
Dhingra. Vide his affidavit Ex.DW1/A he deposed on the lines of WS and
exhibited following documents:
i. Copy of Registration Certificate No. 07ATCPD3167G1ZZ along with Aadhar Card
and PAN Card of the defendant’s proprietor (from Page No. 33 to 37) is Ex.DW1/1
(Colly.)
ii. Copy of SPA in favour of Mr. Ritesh Dhingra is Ex.DW1/2;
iii. Copy of Balance Sheet from 2016-2021 (from Page No. 60 to 78) is Ex.DW1/3;
iv. Copy of Ledger Account (from Page No. 79 to 98) is Ex.DW1/4;
v. Copy of GST Bill / Invoice bearing No. ZH(T)485/18-19 of Rs. 2,06,420 along with
E-way Bill and Transportation Receipt all dated 15.09.2018 (from Page No. 99 to
102) is Ex.DW1/5;
vi. Copy of GST Bill / Invoice bearing No. ZH(T)493/18-19 of Rs. 56,483 along with E-
way Bill and Transportation Receipt all dated 17.09.2018 (from Page No. 103 to 106)
is Ex.DW1/6;
vii. Copy of GST Bill / Invoice bearing No. ZH(T)512/18-19 of Rs. 3,979/- along with E-
way Bill and Transportation Receipt all dated 21.09.2018 (from Page No. 107 to 109)
is Ex.DW1/7;
viii. Copy of GST Bill / Invoice bearing No. ZH(T)0067/19-20 of Rs. 3,06,950/- along
with E-way Bill and Transportation Receipt all dated 25.04.2019 (from Page No. 110
to 115) is Ex.DW1/8
ix. Copy of GST Bill / Invoice bearing No. ZH(T)063/20-21 of Rs. 16,17,565/- along
with E-way Bill and Transportation Receipt all dated 07.09.2020 (from Page No. 116
to 133) is Ex.DW1/9;
x. Copy of GST Bill / Invoice bearing No. ZH(T)070/20-21 of Rs. 19,11,676/- along
with E-way Bill and Transportation Receipt all dated 09.10.2020 (from Page No. 134
to 199) is Ex.DW1/10;
xi. Copy of Bank Statement is Ex.DW1/11;
xii. Calculation Chart of Interest calculation on security deposit is Ex.DW1/12;
xiii. Calculation Chart of Special Discount (from Page No. 41 to 59) is Ex.DW1/13;
xiv. Details of payments which are collected directly by the plaintiff from the buyers
(from Page No. 202 to 203) is Ex.DW1/14;
xv. Copy of Forms Receivable of State of Punjab, Haryana, UP and Rajasthan (from
Page No. 204 to 207) is Ex.DW1/15;
xvi. Copy of GSTR-2A is Ex.DW1/16;
xvii. Certificate under Section 65B of ‘The Indian Evidence Act, 1872‘ is Ex.DW1/17.
CS Comm No.118/2024 page 9
M/s Global Medikit Vs. M/s Zeus Healthcare India
23.In his cross-examination he submits that he is MBA in marketing. He
started the defendant firm in 2014 with his wife. He stated that his wife
does not participate in business and it is independently handled by him.
No separate power of attorney is executed for the purpose of handling the
business. He accepted that the agreement dated 01.08.2016 further
exhibited as Ex.DW1/P1 bears his signatures. He also accepted that he
has not filed any document in suport of his plea that plaintiff company
collected money directly from defendant’s clients. He denied that 6%
margin money has already been received by the defendnat. He accepted
that no demand letter was ever sent by defendant to the plaintiff for
additional claim of margin money @6%. He denied the suggestion that
the goods under four invoices Ex.DW1/5 to Ex.DW1/8 was never
received by the plaintiff company. He added that invoices alongwith e-
way bills and bilties have been duly proved and exhibited on record. He
also pointed out that emails were issued to the plaintiff company in this
regard vide Ex.DW1/3 and Ex.DW1/4 which were admittedly received
by the plaintiff but no reply in the form of denial is filed. Rather in a reply
sent to the defendant only reason for return is elicited but the factum of
receipt is not denied. He accepted that the goods received from the
plaintiff was being sold independently to the defendant’s clients and
payments were collected directly. The sale price would vary according to
the market circumstance. Nothing is filed on record to show that goods
were sold at a price lesser than the price at which they were bought from
the plaintiff.
24.He denied the suggestion that plaintiff has not concealed material facts or
that defendant has already availed 6% margin money as per contract. He
accepted that no notice or letter was sent by him qua claiming additional
6% margin money and that this aspect is raised for the first time in the
CS Comm No.118/2024 page 10
M/s Global Medikit Vs. M/s Zeus Healthcare India
written statement. Witness added that he might have issued some email in
this regard but no such email was placed or proved on record. He did not
deny the fact that neither in the ledger Ex.DW1/4 nor in the balance sheet
Ex.DW1/3 there is any entry of additional 6% margin money.
25.He denied that no goods under GST invoices Ex.DW1/5 to Ex.DW1/8
were ever delivered by the defendant to the plaintiff. He admittted that
there is no endorsement on these invoices qua delivery.
26.He claimed that usually he used to sell goods at a price higher than his
purchase price and many a times goods were sold at a price lower than the
purchase price. He admitted that he has not placed anything on record to
show that he sold goods to his clients at a price lower than his purchase
price. He accepted that the price mentioned in the defendant’s invoices
qua return of goods Ex.DW1/9 and Ex.DW1/10 carries a price higher
than the purchase price which is equivalent to Rs.1,00,984/- and
Rs.1,33,508/- respectively. He accepted that there is no entry qua C-Form
tax in GST in the ledger Ex.PW1/4 even though the same is agitated in
the WS.
27.Defendant Pooja Dhingra did not step into the witness box at all.
28. I have heard arguments of Sh. S. K. Chaturvedi and Mr. Nishi Ranjan
Singh, Ld. Counsels for plaintiff and Sh. Sonal Anand, Ms. Surbhi
Singh and Sh. Karan Singh, Ld. Counsels for defendant and have
perused the case file carefully.
29. Now I shall dispose of individual issues framed in this case.
Issue No. 1, 2, 3, 7:
1. Whether the plaintiff concealed true facts / amount already paid by the
defendant and made wrong entries in the ledger and the plaintiff owes
huge amount to the defendant? OPD
2. Whether the plaintiff and the defendant had agreed that the defendant
would get 6% of the net sales (excluding tax) and the plaintiff may, at any
time, revise its margin depending upon the performance of the defendant
or market conditions, if so, its effect? OPDCS Comm No.118/2024 page 11
M/s Global Medikit Vs. M/s Zeus Healthcare India
3. Whether the plaintiff failed to pay margin amount of Rs. 1,01,96,077/-,
as detailed in Para No. 8 and 9 of the Preliminary Submissions in the
Written Statement, if so, its effect? OPD
7. Whether the plaintiff had asked the defendant to raise bill on the
dealers at prices less than the price negotiated by the defendant in order
to offer special advantage to the dealers, if so, its effect? OPD
30.At the onset it would be appropriate to cull out facts admitted by both the
parties. It is admitted case of both the sides that plaintiff is a leading
manufacturer of medical disposables and that defendant, a proprietorshp
concern of Ms. Pooja Dhingra had entered into a contract with the
plaintiff as a super distributor for the States of Haryana and Delhi NCR
vide agreement dated 01.08.2016 Ex.DW1/P1. As per terms of the
agreement it was initially for a period of one year expiring on 31.03.2018.
Although there was provision for its renewal but no such renewal
agreement was entered. Also, admittedly, the supply of medical
disposables were made by the plaintiff to the defendant as per orders
received against GST paid invoices and were treated as outright sale.
Admittedly, plaintiff was maintaining an open running account of all the
sales made and payments received on account. Admittedly, defendant was
supposed to pay up for all the goods sold during the month by 7th day of
succeeding month. Admittedly, last transaction was carried out between
the parties on 31.03.2021 when defendant returned some unsold
inventory. Admittedly, at the time of being appointed as a super distributor
defendant deposited a refundable security of Rs. 7 lakhs with the plaintiff
on which plaintiff was supposed to pay 6% per annum interest.
Admittedly, this amount alonggwith interest was adjusted by the plaintiff
by making a credit entry of Rs.8,41,607/- against the debit balance of the
defendant.
31.Admittedly, there was a provision for return of unsold inventory by the
defendant to the plaintiff by issuing a reverse sale invoice qua which
CS Comm No.118/2024 page 12
M/s Global Medikit Vs. M/s Zeus Healthcare India
plaintiff was supposed to issue credit notes and make appropriate entry in
the ledger. Admittedly, defendant did return goods vide invoices
Ex.DW1/9 and Ex.DW1/10 dated 30.11.2020 and 25.12.2020
respectively. The cumulative value of these two returned articles as per
sale made by the plaintiff initially is Rs. 32,94,742/- even though
defendant has drawn these two returned invoices by adding profit over the
purchase price at a value Rs.35,29,241/-.
32.Although the defendant has denied in the WS but in the affidavit of
admission denial receipt of legal notice Mark P1 (now exhibited as
admitted document Ex.PW1/A1) but in the affidavit of admission
denial, its receipt by way of whatsapp as well as email has been admitted.
Also, admittedly, no reply to this legal notice has been issued by the
defendant to the plaintiff. Further it is admitted case of the parties that
Clause 3 of the Super Distributor Agreement Ex.DW1/P1 carries a
stipulation whereunder the defendant is entitled to 6% margin money on
the net sales (excluding taxes). Although in thsi regard as per plaintiff, the
6% margin was availed by the defendant routinely on each invoice since
the sale price was less than the MRP treated on the medical disposables.
However, as per the defendant this 6% was receivable by the defendant
from the plaintiff over and above the purchases made from the plaintiff at
prices lower than the MRP. It is admitted that prior to filing of this WS
neither defendant has ever issued any communication or legal notice
demanding additional 6% margin money over and above the
profits/margins available routinely nor any cross-claim has been filed or
pursued in this regard. Although it is claimed that a cross-claim of
Rs.1,01,96,077/- as CS (Comm.) No.46/2024 but admittedly neither any
court fees was paid thereon and the same was rejected by this Court vide
order dated 25.11.2024.
CS Comm No.118/2024 page 13
M/s Global Medikit Vs. M/s Zeus Healthcare India
33.Another important fact which is admitted is that even though defendant
paid a sum of Rs. 2 lakhs by way of NEFT dated 16.12.2019 to the
plaintiff but the same did not find any mention as a credit entry in the
plaintiff’s ledger Ex.PW1/3. This is admitted by Ld. Counsel for the
plaintiff as an inadvertant oversight. However, admittedly, neither revised
ledger was filed by planitiff on record by reducing it by Rs. 2 lakhs nor
any amendment application was filed for reducing the suit claim by Rs. 2
lakhs.
34.As far as issue no. 1 is concerned, it is submitted by Ld. Counsel for
plaintiff that this issue has two facets, first qua failure to make credit entry
of Rs. 2 lakhs in the ledger and second whether plaintiff owes a huge
amount of money to the defendant. This latter aspect also covers issue no.
3. As regards the first aspect it is conceded that due to inadvertant
oversight the credit entry of Rs. 2 lakhs was not made, as detailed supra
and that as per submission made at Bar plaintiff company is not pressing
for the said Rs. 2 lakhs. It is rather pointed out that, again inadvertantly,
the accounts team of the plaintiff company ended up making a credit entry
of Rs. 15 lakhs on 05.06.2020 even though no such payment was made by
the defendant. This fact is not disputed by the defendant in so far as there
is no such entry available in the ledger/balance sheet filed by the
defendant on record.
35.Even though plaintiff could have updated the ledger by reversing the
credit entry of Rs. 15 lakhs, but for the reasons best known to them no
such attempt was made to reverse the entry which resulted in
unintentional gain of Rs. 15 lakhs to the defendant.
36.On the other hand, it is argued by Ld. Counsel for the defenant that failure
of plaintiff to make Rs. 2 lakhs credit entry vitiates the entire ledger
Ex.PW1/3 rendering it unbelieveworthy. I am not in conformity with this
CS Comm No.118/2024 page 14
M/s Global Medikit Vs. M/s Zeus Healthcare India
plea in so far as such like inadvertant omissions are not unnatural. In the
fitness of things, plaintiff should have corrected and placed on record the
updated ledger followed by reduction of the suit amount by Rs. 2 lakhs by
seeking an amendment but the fact that a statement is made at bar would
suffice. Moreover, this is an isolated mistake in the ledger out of five
years business containing several hundred entries and as such nothing
more can be read into the same.
37.As regards the second facet of issue no. 1 as also issue no. 3 that plaintiff
owes huge money to the defendant, as mentioned supra, no sincere efforts
were made on behalf of defendant to pursue the cross claim. No evidence
has been filed or proved on record in this regard. Evidently, in the absence
of any counter-claim, seeking a mere declaration by way of raising an
objection without seeking any consequential relief is legally
inconsequential.
38.It is submitted by Ld. Counsel for defendant that plaintiff had under
Clause 3 under the title “Margin” had assured that defendant would earn
net margin of 6%. For ready reference the same is reproduced hereunder:
“M/s Zeus Healthcare India will get a margin of 6% on net sales (excluding tax),
M/s Global Medikit Limited may at any time revise its margin depending upon
performance of M/s Zeus Healthcare India or market conditions.”
39.Ld. counsel for defendant has drawn attention of this Court to certain
annexures which are purportedly some account sheets sent by employee
of the plaintiff to the defendant company vide email Ex.PW1/D1. Having
gone through this annexure, it is obviously not discernible as to what is
the purpose of these account sheets. Nothing has been shown on record
which could show that plaintiff was not selling and supplying medical
disposables to the defendant with at least 6% margin from the maximum
retail price. As mentioned supra, not a single instance/communication is
shown on behalf of the defendant that she ever demanded additional 6%
CS Comm No.118/2024 page 15
M/s Global Medikit Vs. M/s Zeus Healthcare India
margin over and above the rate difference which she was getting against
the MRP and the sale price of the plaintiff.
40.In the absence of any cogent and reliable evidence, Ld. Counsel for
defendant has not been able to establish that it was the plaintiff company
which was regulating the defendant’s sale prices. There is nothing in the
agreement Ex.DW1/P1 that plaintiff would arrange buyers for the
products sold by it to the defendant. In the light of the above issue no. 1,
2, 3 and 7 are decided in favour of plaintiff and against the defendant.
Issue no. 4 and 5:
4. Whether the plaintiff has not accounted the returned goods in the ledger
to the extent of Rs. 5,73,832/-, as detailed in Para No. 12 of the Preliminary
Submissions in the Written Statement, if so, its effect? OPD
5. Whether the plaintiff failed to deduct the amount, as mentioned in Para
No. 13, 14 and 15 of the Preliminary Submissions in the Written Statement,
if so, its effect? OPD
41.It is admitted case of the parties that under the contract Ex.DW1/P1 the
plaitniff was obliged to take back in return the unsold inventories. As per
defendant goods were returned on numerous occasions during the five
years business between 2016 to 2021 however within the ambit of the suit
in hand defendant has cited and relied on 6 return sale invoices namely
Ex.DW1/5 to Ex.DW1/8 as also Ex.DW1/9 and Ex.DW1/10. While the
return of goods under the latter two invoices stands duly admitted by the
plaintiff company and due credit note as per appropriate sale price has
already been made as per ledger Ex.PW1/3 but the plaintiff company has
categorically denied not only in the replication but also in the affidavit of
admission denial, the receipt/return of goods under defendant’s invoices
Ex.PW1/5 to Ex.PW1/8. As far as proof of delivery of goods is
concerned, the relevant law can be summarised as under:
CS Comm No.118/2024 page 16
M/s Global Medikit Vs. M/s Zeus Healthcare India
42.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
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.”
43.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.118/2024 page 17
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(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.”
44. 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,–
(a) “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;
(b) “consignee” means the person named as consignee in the goods
forwarding note;
(c) “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;
(d) “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;
(e) “goods” includes–
i. Containers, pallets or similar articles of transport used to
consolidate goods; and
ii. animals or livestock;
(f) “goods forwarding note” means the document executed under section 8;
(g) “goods receipt” means the receipt issued under section 9;
(h) “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;
(i) “prescribed” means prescribed by rules made under this Act;
(j) “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);
CS Comm No.118/2024 page 18
M/s Global Medikit Vs. M/s Zeus Healthcare India
(k) “registration” means the registration granted or renewed under sub-
section (5) of section 4.
45. 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,-
a) in case where the goods are to be loaded by the consignor, on the
completion of such loading; or
b) 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.
46. 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.”
47. Form 7 and 8 of Rules, 2011 are pictorially represented as under:
CS Comm No.118/2024 page 19
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CS Comm No.118/2024 page 20
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48. As far as presumption under Section 16 (2) of CGST Act is concerned,
the same can be claimed by the seller only in one circumstance i.e. the
defendant has availed Input Tax Credit under the CGST Act. The term ITC 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;
49. 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.
[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
CS Comm No.118/2024 page 21
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(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)
50.Applying the above legal position on the facts of this case it is found that
admittedly neither of the invoices carry any endorsement or rubber stamp
of any official of the plantiff. However, each of the four invoices
Ex.PW1/5 to Ex.PW1/8 are duly supported with e-way bills generated by
the defendant as also accompanying the copy of the bilty issued by M/s
Nitco as per Carriage by Road Rules, 2011 promulgated under Carriage
by Road Act, 2007. if the above documents are read in consonance with
Section 23 (2) and 39 of Sale of Goods Act, 1930, the onus of proving
the delivery at the end of defendant is discharged the moment the goods
are delivered to the carrier.
51.This proposition is opposed by Ld. Counsel for the plaintiff with a
submission that perusal of all the four bilties show that under the column
titled “to pay amount (tp)”, a money figure is mentioned and this
according to Ld. Counsel for plaintiff signifies that this amount is
supposed to be paid by the consignee. It is argued that until and unless
consignee pay this amount, the consignment will not be released by the
carrier/transporter. In so far as this document is prepared at the time of the
booking of the consignment by the consigner which is defendant in the
case in hand, the question of proof of plaintiff paying the “to pay amount”
does not arise.
CS Comm No.118/2024 page 22
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52. Another submission made in this regard is that the space meant for
signature of customer is found to be blank. Evidently this is not a copy
which was returned post delivery of the goods to the plaintiff but rather
appears to be a copy obtained at the time of booking of consignment. As
far as onus of proving of factual matrix of a case is concerned, primary
onus remains on the plaintiff as per Section 104 of Bhartiya Sakshya
Adhiniyam, 2023 (Section 101 of Evidence Act) and the onus of return
of goods through four invoices rests on the defendant as per Section 105
of Bhartiya Sakshya Adhiniyam, 2023 (Section 102 of Indian
Evidence Act). For ready reference the law is reproduced hereunder:
Section 104 of Bhartiya Sakshya Adhiniyam, 2023 (Section 101 of In-
dian Evidence Act): Burden of ProofWhoever desires any Court to give judgment as to any legal right or liability
dependent on the existence of facts which he asserts, must prove that those facts exist.
When a person is bound to prove the existence of any fact, it is said that the burden of
proof lies on that person.
Illustrations:
(a) A desires a Court to give judgment that B shall be punished for a crime which A
says B has committed.
A must prove that B has committed the crime.
(b) A desires a Court to give judgment that he is entitled to certain land in the
possession of B, by reason of facts which he asserts, and which B denies, to be true.
A must prove the existence of those facts.
53. In case titled Rangammal Vs. Kuppuswami and Anr., 2011 Latest
Caselaw 417 SC dated 13.05.2011 Hon’ble Supreme Court held as
under:
Section 101 of the Evidence Act, 1872 defines “burden of
proof” which clearly lays down that:
“101. Burden of proof.–Whoever desires any court to give judgment as to any legal
right or liability dependent on the existence of facts which he asserts, must prove that
those facts exist.
CS Comm No.118/2024 page 23
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When a person is bound to prove the existence of any fact, it is said that the burden
of proof lies on that person.”
Thus, the Evidence Act has clearly laid down that the burden of proving a fact
always lies upon the person who asserts it. Until such burden is discharged, the
other party is not required to be called upon to prove his case. The court has to
examine as to whether the person upon whom the burden lies has been able to
discharge his burden. Until he arrives at such conclusion, he cannot proceed on the
basis of weakness of the other party.
Section 105 of Bhartiya Sakshya Adhiniyam, 2023 (Section 102 of
Indian Evidence Act) : On whom burden of proof lies
The burden of proof in a suit or proceeding lies on that person who would
fail if no evidence at all were given on either side.
Illustration:
(a) A sues B for land of which B is in possession, and which, as A asserts,
was left to A by the will of C, B’s father.
If no evidence were given no either side, B would be entitled to retain his
possession. Therefore the burden of proof is on A.
(b) A sues B for money due on a bond.
The execution of the bond is admitted, but B says that it was obtained by
fraud, which A denies.
If no evidence were given on either side, A would succeed, as the bond is
not disputed and the fraud is not proved.
Therefore the burden of proof is on B.
54. In case titled Anil Rishi Vs. Gurbaksh Singh, 2006 Latest Caselaw 269
SC dated 02.05.2006 Hon’ble Supreme Court held as under:
“The suit will fail If both the parties do not adduce any evidence, in view of
Section 102 of the Evidence Act. Thus, ordinarily, the burden of proof would be
on the party who asserts the affirmative of the issue and it rests, after evidence is
gone into, upon the party against whom, at the time the question arises,
judgment would be given, if no further evidence were to be adduced by either
side.”
55.Having placed on record GST paid return sale invoices supported with e-
way bills and bilties issued with relevant GST numbers and e-way bills
presumption is drawn in favour of defendant and against the plaintiff.
Furthermore, the moment an eway bill is generated a presumption under
Rule 138 (12) of GST Rules, 2017 comes into play. As per Rule 138 of
CGST Rules a SMS message and a pop up message is sent to the
CS Comm No.118/2024 page 24
M/s Global Medikit Vs. M/s Zeus Healthcare India
registered mobile and the registered account of the portal of the defendant.
For ready reference the same is reproduced hereunder:
(12) Where the person to whom the information specified in sub-rule (11) has
been made available does not communicate his acceptance or rejection within
seventy two hours of the details being made available to him on the common
portal, or the time of delivery of goods whichever is earlier, it shall be deemed
that he has accepted the said details.
56.There is nothing on record to show that the planitiff company ever refuted
the SMS generated qua the four e-way bills in question and hence the
presumption which has arisen in favour of plaintiff and against the
defendant has remained unrefuted. The issue no. 4 and 5 (partially) are
answered against the plaintiff and in favour of defendant.
Issue no. 6:
6. Whether the plaintiff has wrongly calculated the amount against
security deposit along with interest at Rs. 8,41,607/- instead of Rs.
9,00,501/-, as mentioned in Para No. 16 of the Preliminary Submissions
in the Written Statement, if so, its effect? OPD
57.Issue no.6 is not pressed by Ld. Counsel for defendant in so far as due
credit of Rs. 7 lakhs security with 6% interest already adjusted by making
a credit of Rs.8,41,607/- whereas the same was wrongly calculated at
Rs.9,00,501/- by the defendant by invoking compound interest. This Issue
stands disposed of accordingly.
Issue no. 8, 9, 10:
8. Whether the plaintiff dealt with the buyers of the defendant directly
and offered special discounts to them and collected payments directly
from the buyers to the extent of Rs. 5,21,096/-, as mentioned in Para No.
18 of the Preliminary Submissions in the Written Statement, if so, its
effect? OPD
9. Whether the plaintiff has not deducted an amount of Rs. 5,23,788.35/-
towards C Form Tax and Interest, as mentioned in Para No. 19 of the
Preliminary Submissions in the Written Statement, if so, its effect? OPD
10. Whether the plaintiff has not deducted an amount of Rs.
3,54,142.43/- qua GST on the sales invoice for goods returned, as
CS Comm No.118/2024 page 25
M/s Global Medikit Vs. M/s Zeus Healthcare India
mentioned in Para No. 20 of the Preliminary Submissions in the Written
Statement, if so, its effect? OPD
58.Ld. Counsel for defendant submits that although detailed defence is taken
in the WS qua these issues but no evidence has been brought on record
and hence the onus of proving these issues on the defendant stands not
discharged. These issues are answered in favour of plaintiff and
against the defendant.
Issue no. 11:
11. Whether the plaintiff is entitled to a decree for recovery of Rs.
26,13,264/-? OPP
59. As discussed supra the suit amount of Rs. 26,13,264/- is upwardly revised
to Rs.39,30,349/- after adding pre-suit interest @18% per annum. As far
as this suit amount is concerned, plaintiff has not placed or proved any
single invoice to show any sale whatsoever to the defendant. Primarily the
entire suit is based only on a debit ledger balance. The evidenciary value
of a ledger is covered under Section 28 of Bhartiya Sakshya
Adhiniyam, 2023 (Section 34 Indian Evidence Act, 1872). For ready
reference the same is reproduced as under:
Section 28 of Bhartiya Sakshya Adhiniyam, 2023 : [Entries in books
of account, including those maintained in an electronic form] when
relevant.
“Entries in books of account, including those maintained in an electronic
from, regularly kept in the course of business, are relevant whenever they
refer to a matter into which the Court has to inquire, but such statements
shall not alone be sufficient evidence to charge any person with liability.”
Illustration:
A sues B for Rs.1,000/- and shows entries in his account books showing B
to be indebted to him to this amount. The entries are relevant, but are not
sufficient, without other evidence, to prove the debt.”
(Emphasis Supplied)
CS Comm No.118/2024 page 26
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60. In case titled Chandradhar Goswami and ors. Vs. Gauhati Bank Ltd.,
1966 Latest Caselaw 225 SC dated 14.10.1966 of Hon’ble Supreme
Court wherein it is held that :
“The main question urged before us is that there is no evidence besides the
certified copy of the account to prove that a sum of Rs 10,000 was advanced to
the appellants and therefore in view of Section 34 of the Evidence Act the
appellants cannot be saddled with liability for that amount. Section 34 is in
these terms:
“Entries in books of account, regularly kept in the course of business, are
relevant whenever they refer to a matter into which the court has to inquire, but
such statements shall not alone be sufficient evidence to charge any person with
liability.”
61. In case titled Ishwar Dass Jain (Dead) through LRs Vs. Sohan Lal
(Dead) by LRs, 1999 Latest Caselaw 405 SC dated 29.11.1999 of
Hon’ble Supreme Court wherein it is held that :
“Under Section 34 of the Evidence Act, entries in “account books” regularly
kept in the course of business are admissible though they by themselves
cannot create any liability. Section 34 reads as follows:
“34. Entries in books of account when relevant.–Entries in books of
account, regularly kept in the course of business, are relevant whenever they
refer to a matter into which the court has to inquire, but such statements
shall not alone be sufficient evidence to charge any person with liability.”
It will be noticed that sanctity is attached in the law of evidence to books of
account if the books are indeed “account books” i.e in original and if they
show, on their face, that they are kept in the “regular course of business”.
Such sanctity, in our opinion, cannot attach to private extracts of alleged
account books where the original accounts are not filed into court. This is
because, from the extracts, it cannot be discovered whether the accounts are
kept in the regular course of business or if there are any interpolations or
whether the interpolations are in a different ink or whether the accounts are
in the form of a book with continuous page-numbering. Hence, if the original
books have not been produced, it is not possible to know whether the entries
relating to payment of rent are entries made in the regular course of
business.”
62. In case titled Central Bureau of Investigation v. V. C Shukla (1998) 3
SCC 410 it has been laid down:
“That for purposes of Section 34, “book” ordinarily means a collection of
sheets of paper or other material, blank, written or printed, fastened or
bound together so as to form a material whole. Loose sheets of paper or
scraps of paper cannot be termed as “book” for they can be easily detached
and replaced. It has also been held that:
CS Comm No.118/2024 page 27
M/s Global Medikit Vs. M/s Zeus Healthcare India
“The rationale behind admissibility of parties’ books of account as evidence
is that the regularity of habit, the difficulty of falsification and the fair
certainty of ultimate detection give them in a sufficient degree a probability
of trustworthiness.”
When that is the legal position, extracts of alleged account books, in our
view, were wrongly treated as admissible by the courts below though the
original books were not produced for comparison nor was their non-
production explained and nor was the person who had prepared the extracts
examined.”
63.As per above statutory provision and settled law no decree can be passed
solely on the basis of ledger. However in the case in hand onus of the
plaintiff to establish and prove its entitlementt to seek recovery of
Rs.39,30,349/- stands dischaged by defendant’s act of admitting the sales.
Not a single instance is shown where any entry of purported sale is denied
or disputed by the defendant. Rather, on the contrary, defendant herself
has placed on record her ledger Ex.DW1/4 and balance sheet which as
compared to plaintiff’s ledger Ex.PW1/3 of Rs.26,13,264/- is showing
closing balance of Rs.31,27,470/- which is much more than what plaintiff
is asking for.
64. However, as conceded supra, the suit amount of Rs.26,13,264/- deserves
to be reduced by Rs. 2 lakhs for failure of plaintiff to make a credit entry
in plaintiff’s ledger. Consequently, the suit claim of Rs.26,13,264/- is
reduced to Rs.24,13,264/-. This amount is further liable to be reduced by
Rs.5,73,832/- bringing it down to Rs.18,39,432/-. This issue is answered
accordingly in favour of plaintiff and against the defendant.
65.Plaintiff is claiming pre-suit interest of Rs.13,17,085/-. Attention of the
plaintiff and his counsel was drawn to Section 15 (2) (d) and Section 12
(6) of CGST Act, 2017 which provide that the interest earned or claimed
on sale of goods which attracts GST, additional GST is payable even on
the interest component.
66.AR of the plaintiff company is directed to file an affidavit thereby
undertaking to pay up applicable GST as per Section 12(6) r/w Section
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M/s Global Medikit Vs. M/s Zeus Healthcare India
15(2) (d) of CGST Act, 2017 on the pre-suit, pendente lite and future
interest components in case the suit is decreed and the payment is
received in pursuance thereof from the defendant.
Issue No. 12:
12. Whether the plaintiff is entitled to pendente lite and future
interest @ 18% per annum, if so, at what rate and for which period?
OPP
Interest
67. Plaintiff has claimed interest @ 18% per annum. The interest is payable as
per Section 34 CPC. For ready reference, Section 34 CPC is reproduced
hereunder:
Section 34 CPC: Interest
(i)”Where and in so far as a decree is for the payment of money, the Court
may, in the decree, order interest at such rate as the Court deems
reasonable to be paid on the principal sum adjudged, from the date of the
suit to the date of the decree, in addition to any interest adjudged on such
principal sum for any period prior to the institution of the suit, with further
interest at such rate not exceeding 6% per annum as the Court deems
reasonable on such principal sum from the date of the decree to the date of
payment, or to such earlier date as the court thinks fit.
(ii).Provided that where the liability in relation to the sum so adjudged had
arisen out of a commercial transaction, the rate of such further interest may
exceed 6% per annum but shall not exceed the contractual rate or interest or
where there is no contractual rate, the rate at which moneys are lent or
advanced by nationalized banks in relation to commercial transactions.
Explanation (i) In this sub-section, “nationalized bank” means a
corresponding new bank as defined in the Banking Companies (Acquisition
and Transfer of Undertakings) Act 1970.
Explanation (ii) For the purposes of this section, a transaction is a
commercial transaction, if it is connected with the industry, trade or business
of the party incurring the liability.
Where such a decree is silent with respect to the payment of further interest
(on such principal sum) from the date of the decree to the date of the payment
or other earlier date, the Court shall be deemed to have refused such interest,
and a separate suit therefore shall not lie.
(Emphasis Supplied)
CS Comm No.118/2024 page 29
M/s Global Medikit Vs. M/s Zeus Healthcare India
68. Section 34 CPC provides that plaintiff will be entitled the interest at the
rate at which Court finds reasonable. For a general suit, the rate of interest
prescribed is 6% and for commercial suit, the Parliament promulgates that
rate of interest may increase from 6% to a rate which is found reasonable.
Plaintiff is accordingly entitled to only the rate at which RBI has issued
Circular for Commercial suits.
69. As far as the interest is concerned, rate applicable to Commercial
transaction shall be payable. As per RBI notification dated 30.08.2022
issued vide Press Release no.2022-2023/794 whereby advisory issued by
RBI to Schedule Commercial banks of accepting deposit rates @ 9.05%
per annum.
Issue No. 13 : Relief
70.In view of the above, suit of the plaintiff is decreed with cost for
Rs.18,39,432/- with 9% interest w.e.f. 01.03.2020 (as per date of last
sale) onwards pendente lite and till realization). Plaintiff’s Lawyer’s
fees is assessed as Rs.50,000/-.
71.Decree sheet be prepared accordingly with a rider that plaintiff company
shall deposit GST on the interest component. File be consigned to Record
Room after due compliance. Digitally
signed by
SURINDER
SURINDER S RATHI
S RATHI Date:
2025.04.02
15:06:24
+0530
(SURINDER S. RATHI)
District Judge,
Commercial Court -11
Central District, THC
Delhi/25.03.2025CS Comm No.118/2024 page 30
M/s Global Medikit Vs. M/s Zeus Healthcare India
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