Delhi District Court
M/S Vson Creations Pvt Ltd vs M/S Raj Kumar Apparels Pvt Ltd And Anr on 31 July, 2025
BEFORE THE COURT OF SH. SURINDER S. RATHI, DISTRICT JUDGE
(COMM.)-11 CENTRAL, THC, DELHI
CS Comm. No.1007/2024
Vson Creations Pvt. Ltd.
Registered Office Earlier At-5574 A,
2nd Floor, New Chandrawal, Kamla Nagar, Delhi -110007
Currently At:
C-150, Phase-I, Naraina Industrial
Area, New Delhi -110028
Through Its Authorized Representative .........Plaintiff
Vs.
M/s Raj Kumar Apparels Pvt. Ltd.
Registered Office At: H. No. 22,
Ward No. 23, Tulsi Nagar,
Atarra Banda, Uttar Pradesh -210201
Commercial Office At:-
2/20, M.G. Road, Sadar Bazar, Agra
Cantt., Idgah Colony, Uttar Pradesh-282001 ..........Defendant
Date of Institution : 11.09.2024
Date of Final Arguments : 31.07.2025
Date of Judgment : 31.07.2025
Decision : Decreed
Judgment
1. This suit is filed by plaintiff company for recovery Rs.70,10,420/-
alongwith interest @18% per annum as unpaid dues of goods sold.
Case of the Plaintiff
2. Case of the plaintiff as per plaint and the documents filed is that it is a
duly incorporated private ltd. company at Kamla Nagar, Delhi and is
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engaged in the business of manufacturing and sale of Jodhpuri suits
and garments. The suit is filed through its Director-cum-AR. In the
course of business defendant, also a duly incorporated private ltd.
company at District Baanda, UP, approached the plaintiff at their
Delhi office for purchase of garments. After several meetings plaintiff
started selling and supplying garments to the defendant against orders
placed through duly issued invoices. There was no dispute qua the
quantity or the quality of the material supplied but the defendant
became irregular in making the payments.
3. The plaint is silent as to when the sales were started and what was the
total value of the garments sold or payments received. All that is
stated is that as on 15.11.2021 there was a principal debit balance of
Rs.48,75,118/-. The plaint mentions that defendant did not make
payments bill wise but paid in lumpsum in small tranches. Upon due
persuasion defendant company issued 9 post dated cheques drawn
between 12.10.2021 and 15.11.2021. Although the plaint is silent but
Court is apprised that these cheques were cumulatively valuing worth
Rs.29 lakhs and were drawn towards partial discharge of the debit
balance. All these cheques on presentation were dishonoured for the
reason "payment stopped by drawer". Separate Section 138 NI Act
case was filed. However Court is apprised during the course of final
arguments that the NI Act complaint was dismissed.
4. The plaint mentions that on 21.10.2021 Director of the defendant
company issued an acknowledgement of debt of Rs.29,39,404/-.
However perusal of this document shows that it is just a photocopy
and is unstamped. During the course of hearing of final arguments Ld.
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Counsel for plaintiff submits at bar that he is not pressing this
document and for this reason he has not exhibited the same in the
evidence as well and no circumstance as provided under Section 60 of
Bhartiya Sakshya Adhiniyam, 2023 (Section 65 of Indian
Evidence Act, 1872) has been proved on record.
5. It is in this backdrop that when the debit balance of Rs.48,75,118/-
was not cleared, plaintiff sent a legal notice dated 09.01.2024
demanding the same alongwith interest but the same was neither
replied nor complied. Plaintiff calculated pre suit interest @18% per
annum from the next day of date of each invoice. This calculation is
ex-facie illegal in so far as according to Article 14 of Schedule
attached to Limitation Act, 1963 r/w Section 31 of Sale of Goods
Act, 1930 the duty of the defendant to pay the invoice starts from the
date of delivery and not from the date of invoice. By adding pre-suit
interest of Rs.21,35,302/- the total debit amount was enhanced to
Rs.70,10,420/-. Plaintiff approached Central DLSA for Pre-Institution
Mediation under Section 12A of Commercial Courts Act, 2015
where defendant did appear through counsel but no settlement was
arrived at and as such Non-Starter Report dated 21.05.2024 was
issued. In this backdrop, suit in hand filed for following reliefs:
Prayer:
i. Pass a decree for recovery of sum of Rs. 70,10,420/- (Rupees Seventy Seven
Lakhs Ten Thousand Four Hundred twenty only) in favor of the Plaintiff
Company and against the Defendants alongwith pendent lite and future
interest @ 18% per annum from the date of filing of the suit till realization.
ii. Costs of the suit and Legal Expenses to the tune of Rs. 1,50,000/- may also
be awarded in favor of the Plaintiff Company and against the Defendants.
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iii. Such other or further relief which this Hon'ble Court may deem fit and
proper be also granted in favor of the Plaintiff Company.
6. The list of documents filed with the plaint is not as per format
provided under Order 11 Rule 2 CPC as amended for Commercial
Courts. The statement of truth filed by the AR of the planitiff
company is not as per Appendix I of Order 6 Rule 15A CPC.
7. Before issuance of summons of the suit all the directors of the
defendant company who were impleaded as co-defendants were
dropped from the array of defendants and a fresh memo was filed.
8. Summons of the suit was issued to the defendant company as per
registered address available in the Registrar of Companies record but
the same was received back with the report "moved". Accordingly,
defendant was served by way of publication in National Dailies "The
Hindu" and "Veer Arjun" dated 07.02.2025. No WS was filed within
30 days or thereafter and defendant's right to file WS was closed on
03.04.2025.
9. Upon completion of pleadings following notional issues were
identified by this Court on 03.04.2025:
Notional Issues:
i. Whether the plaintiff is entitled to recovery of Rs.70,10,420/- alongwith
interest @ 18% per annum? OPP
ii. Relief.
10.To prove his case Director of the plaintiff stepped into the witness box
as PW1 Girish Gakhar. Vide affidavit Ex.PW1/1 he deposed on the
lines of plaint and exhibited following documents:
i. Copy of Master Data is Mark A.
ii. Board Resolution dated 21.10.2023 is Ex.PW1/3.
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iii. Copy of Invoices and Lorry receipts/builty (from Page No. 32 to 58)
alongwith Affidavit under Order 11 Rule 6 CPC are Ex.PW1/4 (Colly.)
(OSR).
iv. Certified copies of cheques and return memos are Ex.PW1/5 (Colly.) and
Ex.PW1/6 (Colly.) (OSR).
v. Copy of Letter Head dated 21.10.2021 is Mark B.
vi. Copy of Legal Notice dated 09.01.2024 is Ex.PW1/8 (OSR).
vii. Postal Receipt is Ex.PW1/9 (OSR).
viii.Tracking Report is Ex.PW1/10 (OSR).
ix. Copy of Ledger is Ex.PW1/11 (Colly.).
x. The complete copy of ledger account is Ex.PW1/11A colly.
xi. Non-Starter Report dated 21.05.2024 is Ex.PW1/12.
xii. E-way bills alongwith affidavit under Order 11 Rule 6 CPC is Ex.PW1/13
Colly.
xiii.Transportation Receipts and 5 Courier Receipts are Mark C and Mark D.
11.None appeared on behalf of defendant for cross-examining PW1.
12.I have heard arguments of Sh. Dinesh Khatri, Ld. Counsel for
plaintiff and have perused the case file carefully. None appeared on
behalf of defendant to argue the case.
13.Now I shall dispose of notional issues framed in this case.
Issue No. 1:
i. Whether the plaintiff is entitled to recovery of Rs.70,10,420/- alongwith
interest @ 18% per annum? OPP
14.Plaintiff is relying on invoices and bilties collectively exhibited as
Ex.PW1/4. In order to discharge the onus of proving the delivery
plaintiff has proved on record e-way bills Ex.PW1/13 colly. apart
from transportation/courier receipts. Although the claimed
acknowledgement of debt of Rs.29,39,404/- not proved as per law but
certified copy of 9 cheques alongwith dishonoured memo Ex.PW1/5
and Ex.PW1/6 valuing Rs.29 lakhs and also being relied for showing
liability of the defendant to pay up the money to the plaintiff as per
presumption available to the plaintiff under Section 118 and 139 of
NI Act.
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15.In order to discharge the onus of proving this case to seek recovery of
the suit amount plaintiff has relied on 28 invoices Ex.PW1/4.
However perusal of these invoices shows that nnone of them carry
any endorsement of receipt nor acknowledgement qua delivery of
goods from the defendant. It is pleaded case of the plaintiff company
and also argued during the course of final arguments that the goods
were dispatched through transportation. However not a single e-way
bill in support of the 28 bills has been filed even though barring
couple of bills all the invoices are more than the threshold value of
Rs.50,000/- for interstate transportation as per CGST Rules, 2017.
16.However during the course of final arguments on a request made by
Ld. Counsel for plaintiff, plaintiff was allowed to place on record e-
way bills and corresponding bilty/goods receipts in order to discharge
onus under Section 31, 33 and 39 of Sale of Goods Act, 1930.
Plaintiff has proved on record e-way bills and bilties.
17.It is a settled legal position that plaintiff is entitled to recovery of only
value of such goods which stands duly delivered. The law in regard to
sale and delivery is governed under Sale of Goods Act, 1930,
Carriage by Road Act, 2007 and Carriage by Road Rules, 2011.
The relevant statute which governs sale of movable articles is Section
23 (2), Section 31, Section 33 and Section 39 of Sale of Goods Act,
1930. 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:
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M/s Vson Creations Pvt. Ltd. Vs. M/s Raj Kumar Apparels Pvt. Ltd.
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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."
18.The term delivery also stands defined under the Statute under Section
33 of Sale of Goods Act, 1930 . The same is reproduced hereunder:
Section 33: Delivery
"Delivery of goods sold may be made by doing anything which the parties agree
shall be treated as delivery or which has the effect of putting the goods in the
possession of the buyer or of any person authorised to hold them on his behalf."
19.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.
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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."
20.To prove delivery by a carrier, copy of Rule 7 and 8 of Carriage by
Road Rules,2011 should have been placed on record. Form 7 as per
Carriage by Road Rules, 2011 is whereunder a seller hands over the
consignment/material/goods to the carrier under endorsement. Form
8 i.e. popularly known as 'Bilty' is whereunder the carrier issues a
receipt in favour of the seller thereby acknowledging the receipt of
goods.
21.Every transport company or a carrier of goods carries out business
under Carriage by Road Act, 2007 whereunder every movable
article as and when booked for transportation shall be done as per
documentation provided under the statute. The term common carrier
is defined in Section 2 (a) of this Act.
Section 2 of Carriage by Road Act. 2007 : Definitions.-
In this Act, unless the context otherwise requires,--
i. "common carrier" means a person engaged in the business of collecting, storing, forwarding
or distributing goods to be carried by goods carriages under a goods receipt or transporting
for hire of goods from place to place by motorised transport on road, for all persons
undiscriminatingly and includes a goods booking company, contractor, agent, broker and
courier agency engaged in the doorto-door transportation of documents, goods or articles
utilising the services of a person, either directly or indirectly, to carry or accompany such
documents, goods or articles, but does not include the Government;
ii. "consignee" means the person named as consignee in the goods forwarding note;
iii. "consignment" means documents, goods or articles entrusted by the consignor to the
common carrier for carriage, the description or details of which are given in the goods
forwarding note;
iv. "consignor" means a person, named as consignor in the goods forwarding note, by whom or
on whose behalf the documents, goods or articles covered by such forwarding note are
entrusted to the common carrier for carriage thereof;
v. "goods" includes--
i. Containers, pallets or similar articles of transport used to consolidate goods; and
ii. animals or livestock;
vi. "goods forwarding note" means the document executed under section 8;
vii. "goods receipt" means the receipt issued under section 9;
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viii. "person" includes any association or body of persons, whether incorporated or not, a road
transport booking company, contractor and an agent or a broker carrying on the business of
a common carrier;
ix. "prescribed" means prescribed by rules made under this Act;
x. "registering authority" means a State Transport Authority or a Regional Transport Authority
constituted under section 68 of the Motor Vehicles Act, 1988 (59 of 1988);
xi. "registration" means the registration granted or renewed under sub-section (5) of section
22.Section 2 of this Act also defines the specific terms like Consignee
in Section 2(b), Consignment in Section 2 (c) and Consignor in
Section 2 (d). Even the terms "Goods Receipt" issued under Section
9 of this Act also stands defined under Section 2 (g).
Section 9 of Carriage by Road Act, 2007 : Goods Receipt
1. A Common Carrier shall,-
i. in case where the goods are to be loaded by the consignor, on the completion of such
loading; or
ii. in any other case, on the acceptance of the goods by him, issue a goods receipts in such
form and manner as may be prescribed.
2. The goods receipt shall be issued in triplicate and the original shall be given to the
consignor.
3. The goods receipt shall be prime facie evidence of the weight or measure and other particulars
of the goods and the number of packages stated therein.
4. The goods receipt shall include an undertaking by the common carrier about the liability under
Section 10 or Section 11.
23.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."
24. Form 7 and 8 of Rules, 2011 are pictorially represented as under:
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CS Comm No.1007/2024
M/s Vson Creations Pvt. Ltd. Vs. M/s Raj Kumar Apparels Pvt. Ltd.
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25.In this backdrop the onus of proving the delivery of the goods is on
the plaintiff and under the law plaintiff could have proved delivery by
any of the following methods:-
i. Admission by defendant/defendant acknowledges the delivery.
ii. Endorsement of receipt by the defendant on the invoices.
iii. Filing and proving Form 7 or Form 8 (Bilty) under Carriage by
Road Rules, 2011 to show that plaintiff delivered the goods to the
carrier and is entitled to benefit under Section 39 of Sale of
Goods Act, 1930.
iv. By proving on record that the GST claimed to have been
deposited by the plaintiff qua these invoices, defendant took input
tax credit under Section 2 (63) of CGST Act, 2017 and plaintiff
is entitled to presumption under Section 16 (2) of CGST Act,
2017.
26.It is submitted that the plaintiff had issued a legal notice to the
defendant containing all the necessary facts which remained
unreubtted as no reply was sent. Law in this regard is well-settled. As
per case titled Jayam Company Vs. T. Ravi Chandaran 2003 (3)
RCR (Cr.) 154 Madras presumption is drawn against defendant that
they have admitted the contents of the legal notice.
27.In another case titled as Metropolis Travels & Resorts (I) Pvt. Ltd.
Vs. Sumit Kalra and Ors., 2002 Latest Caselaw 714 Del wherein it
was observed that :
"13. There is another aspect of the matter which negates the argument
of the respondent and that is that the appellant served a legal notice
on the respondent vide Ex. PW1/3. No rely to the same was given by
the respondent. But in spite of the same, no adverse inference was
drawn against the defendant. This court in the case of Kalu Ram Vs.
Sita Ram 1980 RLR 44 observed that service of notice having been
admitted without reservation and that having not been replied in
that eventuality, adverse inference should be drawn because he kept
CS Comm No.1007/2024
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quite over the notice and did not send any reply. Observations of
Kalu Ram‘s case (supra) apply on all force to the facts of this case. In
the case in hand also despite receipt of notice, respondent did not care
to reply nor refuted the averments of demand of the amount on the
basis of the invoices/ bills in question. But the Ld. Trial court failed to
draw inference against the respondent”.
(Emphasis Supplied)
28.Ld. Counsel for plaintiff has also relied upon case titled as Krishan
Kumar Aggarwal Vs. Life Insurance Corporation 2010 Latest
Caselaw 3344 Del wherein Hon’ble Delhi High Court observed that:
“65. No explanation has been rendered by the respondent as to why
letter dated 23rd August, 2008 and the legal notice send by the
appellant were not repudiated or even replied. Despite due receipt, the
respondent did not bother to even send any response to the letter
dated 23rd August, 2008 or the legal notice, the contents whereof
would be deemed to have been admitted. In the judicial precedents
reported in Rakesh Kumar Vs. Hindustan Everest Tool Ltd.
MANU/SC0396/1988: (1988) 2 SCC 165 & Hirallal Kapur Vs. Prabhu
Chaudhary MANU/SC/0189/1988 : (1988) 2 SCC 172 it was held by
the Supreme Court that a categorical assertion by the landlord in a
legal notice if not replied to and controverted, can be treated as an
admission by a tenant.
“66. In a Division Bench proceedings of this court reported in
Metropolis Travels and Resorts Vs. Sumit Kalra MANU/DE/0562/2002
: 98 (2002) DLT 573 (DB), no adverse inference was drawn against
the respondent for failure to reply the legal notice on consideration of
the facts and circumstances of the case. Reference was made to
proceedings reported in Kalu Ram Vs. Sita Ram wherein it had been
observed that service of notice being admitted without reservation
and that having not been replied, in that eventuality, adverse
inference should be drawn”.
(Emphasis Supplied)
29.As per judgments of Division Bench of Hon’ble High Court of Delhi,
plaintiff has been successful in showing on record that non-reply of
legal notice by the defendant calls for drawing of presumption as to
correctness of the facts contained therein.
30.The evidence in this case is primarily documentary. The documents
relied upon by the plaintiff are the documents maintained by a
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company in the ordinary course of its business. Though the exceptions
cannot be ruled out, but generally taking a judicial notice of the
business, these documents can be considered to be duly executed in
due course of the business and capable of binding the parties into a
contractual relationship.
31. The pleadings in the plaint and annexed documents have remained
unrebutted, unchallenged and uncontroverted. In the absence of any
plausible denial on behalf of defendant, case of the plaintiff is deemed
to be admitted. On the basis of pleadings, evidence led and the
documents exhibited plaintiff has discharged the onus of proving
his case.
Interest:
32. Plaintiff has sought 18% interest. 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.
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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)
33. 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.
34. 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.
35. In so far as no separate undertaking has yet been filed, it is clarified
that the decree sheet prepared in the matter shall not be executed
unless plaintiff submits an undertaking to pay GST in terms of
Section 12 (6) and Section 15 (2) (d) of CGST of pre-suit, pendente-
lite and future interest by way of affidavit.
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36.The law in this regard is well-settled. Section 15 of CGST Act, 2017
provides for calculation of value of the taxable supply. For ready
reference the same is reproduced hereunder:
Section 15: Value of Taxable Supply.-
1. The value of a supply of goods or services or both shall be the transaction value,
which is the price actually paid or payable for the said supply of goods or
services or both where the supplier and the recipient of the supply are not related
and the price is the sole consideration for the supply.
2. The value of supply shall include-
a) Any taxes, duties, cesses, fees and charges levied under any law for the
time being in force other than this Act, the State Goods and Services Tax
Act, the Union Territory Goods and Services Tax Act and the Goods and
Services Tax (Compensation to States) Act, if charged separately by the
supplier;
b) Any amount that the supplier is liable to pay in relation to such supply but
which has been incurred by the recipient of the supply and not included in
the price actually paid or payable for the goods or services or both;
c) incidental expenses, including commission and packing, charged by the
supplier to the recipient of a supply and any amount charged for anything
done by the supplier in respect of the supply of goods or services or both
at the time of, or before delivery of goods or supply of services;
d) Interest or late fee or penalty for delayed payment of any consideration
for any supply; and
e) subsidies directly linked to the price excluding subsidies provided by the
Central Government and State Governments.
Explanation.-For the purposes of this sub-section, the amount of subsidy
shall be included in the value of supply of the supplier who receives the
subsidy.
3. …….
4. …….
5. ……
(Emphasis Supplied)
37.Plain reading of Section 15 (2) (d) shows that the value of the goods
supplied or a service rendered shall include the interest or late fee or
any penalty for delay in payment of such supply or service.
Consequently, in case the value of the goods sold is for example Rs.1
lakhs and the invoices not paid within the agreed credit period, say 15
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days, and on account of delay as per terms of the invoice an interest
component of Rs.25,000/- is accrued on the same. This component of
Rs.25,000/- as per Section 15 of CGST Act, 2017 shall form the
enhanced value of the very invoice itself and attracts equal tax as
applicable to the goods.
38.In the absence of any invoice generated by the plaintiff against the
defendant qua the interest leviable neither the GST Department nor its
portal or the ledger of the plaintiff would be aware that plaintiff is
entitled to recover additional sum of money over and above the value
of the invoice for the goods/services supplied/rendered. Consequently,
it appears that a plaintiff in a similar situation is supposed to generate
a new standalone/additional invoice for the pre-suit interest
component.
39.Another related aspect which is of relevance is Section 12 (6) of
CGST Act, 2017. For ready reference the same is reproduced
hereunder:
“The time of supply to the extent it relates to an addition in the value of
supply by way of interest, late fee or penalty for delayed payment of any
consideration shall be the date on which the supplier receives such
addition in value.”
40.This Chapter 4 of the CGST Act pertains to time of supply of goods
and provides that in case the supplier/seller/service provider earns
additional amount by way of interest, the tax would be payable only
on the date when the supplier receives such additional value. In cases
of interest/late fee/penalty on delayed payments, same has to be
considered and reckoned for all the 3 phases namely pre-suit interest,
pendente lite and future interest. Plaintiff is required in law to do the
CS Comm No.1007/2024
M/s Vson Creations Pvt. Ltd. Vs. M/s Raj Kumar Apparels Pvt. Ltd.
page 16
needful to assure the Court that the intends to pay GST on the interest
components.
Relief
41.In view of the above, suit of the plaintiff is decreed with cost for
Rs.48,75,118/- + Rs.11,45,032/- {interest @ 9% w.e.f 01.12.2021 (as
per last sale) to 11.09.2024 (date of filing of the suit)} =
Rs.57,20,150/- onwards and further 9% interest on Rs.57,20,150/-
pendente lite and till realization. Plaintiff’s lawyer’s fees is assessed
as Rs.50,000/-.
42. Decree sheet be prepared accordingly. File be consigned to Record
Room after due compliance. Digitally
signed by
SURINDER
SURINDER S RATHI
S RATHI Date:
2025.08.13
16:14:26
+0530(SURINDER S. RATHI)
District Judge,
Commercial Court -11
Central District, THC
Delhi/31.07.2025CS Comm No.1007/2024
M/s Vson Creations Pvt. Ltd. Vs. M/s Raj Kumar Apparels Pvt. Ltd.
page 17