Delhi District Court
Rakesh Kumar Jain vs Rohit Gupta on 23 January, 2025
IN THE COURT OF MS. KIRAN BANSAL:
DISTRICT JUDGE (COMMERCIAL COURT-02)
SHAHDARA DISTRICT
KARKARDOOMA COURTS : DELHI
Civil Suit (Comm) No. 337/2022
IN THE MATTER OF:
SH. RAKESH KUMAR JAIN
S/O SH. KHACHERU SINGH JAIN
PROP. M/S JAIN BANDHU TRADERS
OFFICE AT X/3424, GALI NO. 1, RAGHUBARPURA NO. 2,
OPPOSITE GALI NO. 12, SHANTI MOHALLA, GANDHI
NAGAR, DELHI-110031
...PLAINTIFF
VERSUS
M/S ROHIT ENTERPRISES
THROUGH ITS PROPRIETOR
SH. ROHIT GUPTA
S/O SH. SANJAY GUPTA
OFFICE CUM RESIDENT AT:-
R-2/72, RAJ NAGAR,
GHAZIABAD, U.P. ...DEFENDANT
Date of Institution :19.05.2022
Date of final arguments :21.12.2024
Date of conclusion :23.01.2025
JUDGMENT
1. At the outset, it is pertinent to mention that the present
case was initially filed under Order XXXVII of the Civil Procedure
Code (hereinafter referred to as the CPC) and was received on e-portal
on 19.05.2022 and physically in the court on 16.07.2022. However,
the service was never effected upon the defendant under the
prescribed format of Order 37 CPC and the counsel for plaintiff never
insisted that defendant be served under the prescribed format of Order
37 CPC. Vide order dated 28.09.2022, summons for commercial suit
CS (Comm) No. 337/2022 SH. RAKESH KUMAR JAIN Vs. M/S ROHIT ENTERPRISES Page No.1 of 32
were issued to defendant with directions to file WS within stipulated
period of 30 days. Thereafter, at request of counsel for plaintiff, fresh
summons were issued to defendant for service of defendant through
the court of Ms. Shruti Chaudhary, Ld. MM (East), KKD Courts,
Delhi and at that time also counsel for plaintiff never insisted that
summons under the prescribed format under Order 37 CPC be issued
to the defendant. Perusal of order dated 06.01.2023 reveals that
defendant appeared along with counsel and thereafter, matter was
proceeded as an ordinary commercial suit.
2. Brief facts of the case are that plaintiff has filed the suit
against the defendant for recovery of Rs. 9,87,643/- along with
pendente lite and future interest. It is stated that plaintiff, being the
proprietor of his firm in the name and style of M/s Jain Bandhu
Traders, is doing his business of all kind of grey fabrics and the
defendant came in contact of plaintiff in the last week of June, 2018
and approached to purchase all kind of grey fabric and assured for
payment. It is stated that plaintiff believing the defendant, got ready to
do business with defendant and defendant placed order for grey fabric
on 05-07-2018 and 06-07-2018 for an amount of Rs.1,88,988/- and
Rs.2,10,668/- and the same was duly delivered vide bill no. JBT/18-
19/279 and JBT/18-19/286 respectively. Thereafter, defendant issued
cheque bearing no. 000141 amounting to Rs. 2,10,668/-, dated 24-08-
2018 and assured the payment of bill no. JBT/18-19/279 amounting to
Rs. 1,88,988/- through bank transfer within a week. On 07.07.2018,
the defendant transferred Rs.1,00,000/- and on 11.07.2018 and
12.07.2018, defendant transferred Rs.50,000/- and Rs.38,988/- in
discharge of liability of bill no. JBT/18- 19/279.
2.1 Thereafter, on 15.07.2018, defendant further placed
order and plaintiff delivered grey fabric amounting to Rs.1,94,247/-
vide bill no. JBT/18-19/316, dated 15.07.2018 and on 18.07.2018,
defendant also received grey fabrics amounting to Rs.2,08,379/- and
CS (Comm) No. 337/2022 SH. RAKESH KUMAR JAIN Vs. M/S ROHIT ENTERPRISES Page No.2 of 32
Rs.2,16,693/- vide bill no. JBT/18-19/327 and JBT/18-19/328 and
defendant received all material against the bills, thereafter, plaintiff
asked the defendant for payment of Rs.6,19,319/- on which defendant
promised that he will repay within two weeks. On 29.07.2018,
plaintiff again approached the defendant for payment of Rs.6,19,319/-
on which defendant issued cheque bearing no. 000153, dated
10.09.2018 for Rs.3,00,000/- and on the next day defendant
transferred Rs.2,00,000/-and Rs.1,00,000/- on 10.08.2018 into the
account of plaintiff and gave further order to purchase grey fabric
which was delivered vide bill no. JBT/18-19/421 amounting to
Rs.3,96,915/-.
2.2 Further it is stated that till 11.08.2018, defendant had
purchased grey fabrics from plaintiff amounting to Rs.14,15,890/- and
defendant paid Rs.4,88,988/- to plaintiff by way of bank transfer and
for remaining amount of Rs.9,26,902/- defendant had issued cheque
bearing no.000141, dated 24.08.2018, amounting to Rs.2,10,668/- and
another cheque bearing no.000153, dated 10.09.2018, amounting to
Rs.3,00,000/- and remaining amount was Rs. 4,16,234/-
2.3 It is stated that after delivering grey fabrics vide bill no.
JBT/18-19/421 of amount of Rs.3,96,915/- plaintiff asked the
defendant to pay Rs.4,16,234/- which is the amount apart from cheque
amount and same is also a legal enforceable liability on which
defendant again started showing his inability in paying the same and
requested not to present both the cheques and also sought time till
15.11.2018.
2.4 On 15.11.2018, plaintiff contacted the defendant and
asked about the payment of cheque bearing no. 000141 for
Rs.2,10,668/- and cheque bearing no. 000153 for Rs.3,00,000/-as well
as remaining part payment of Rs.4,16,234/- and the defendant assured
that he will pay the remaining amount on or before 20.11.2018.
CS (Comm) No. 337/2022 SH. RAKESH KUMAR JAIN Vs. M/S ROHIT ENTERPRISES Page No.3 of 32
Thereafter, plaintiff presented both the cheques bearing no.000141 and
000153, however, both cheques got dishonored for the reason “Funds
Insufficient”. On giving information of dishonoring of both the
cheques to the defendant, the defendant did not give any satisfactory
reply to plaintiff. Thereafter, a legal notice dated 12.12.2018 was
served upon the defendant through speed post and registered A.D.
However, defendant neither gave reply nor made payment of the
cheque. Thereafter, plaintiff filed a complaint case under Section 138
N.I. Act against the defendant qua cheque bearing no. 000141 and
000153 which is pending in the court of Ld. MM, Ms. Shruti
Chaudhary, East District, Karkardooma Courts. It is stated that during
the pendency of complaint case under Section 138 N.I. Act, a meeting
was held between plaintiff and defendant on 09.08.2019, where
defendant assured the plaintiff that he shall make full and final
payment of cheque amount as well as remaining amount of
Rs.4,16,234/- to the defendant within three months and further assured
that firstly he will transfer the amount which is legal enforceable
liability on part of the defendant apart from the cheque amount. On
01.11.2019, defendant transferred Rs.1,10,668/- in the account of
plaintiff, but, thereafter no payment was made by the defendant and
still Rs.8,16,234/- is due, on which defendant is liable to pay interest
@ 1% per month as per the settlement arrived between plaintiff and
defendant on 09.08.2019.
2.5 It is stated that defendant with mala fide intention has
not paid the amount of Rs.8,16,234/-, so defendant is liable to pay
interest @ 1% per month from 06.11.2019 till 06.08.2021 which
comes to Rs.1,71,409/-, hence, the defendant is liable to Rs.9,87,643/-
along with pendente lite and future interest. It is further stated that
cause of action arose in favour of plaintiff and against the defendant as
defendant despite receiving the legal notice 12.12.2018, neither
replied nor made payment of the cheque amount in question to the
plaintiff and thus, the cause of action is still subsisting. It is further
CS (Comm) No. 337/2022 SH. RAKESH KUMAR JAIN Vs. M/S ROHIT ENTERPRISES Page No.4 of 32
stated that no relief has been claimed in the present suit which does
not fall within the ambit of provisions of Commercial Court Act,
2015. It is further stated that suit is valued for the purpose of court fee
and jurisdiction for a sum of Rs.9,87,643/- upon which requisite court
fee of Rs.12,100/- has been affixed. It is further stated that this court
has territorial jurisdiction to try and entertain the present suit as
plaintiff is residing at Krishna Nagar within the jurisdiction of this
court.
Along with this plaint, supporting affidavit of Sh.
Rakesh Kumar Jain, Proprietor of M/s. Jain Bandhu Tranders,
Affidavit cum Statement of truth of plaintiff is filed.
3. The WS was filed on 27.02.2023. In the WS, it is stated
that plaintiff has not come to the court with clean hands and the plaint
is liable to be dismissed on account of concealment and suppression of
facts with heavy cost. It is stated that plaintiff approached the
defendant and apprised about his business to the defendant and further
stated that he wish to start business with defendant in future and
thereafter, a meeting was fixed and the defendant for further business
deal given a cheque bearing no.000153, drawn on Andhra Bank to the
plaintiff as security cheque, thereafter, plaintiff assured for giving best
services and fulfill all business requirements as per order by the
defendant, but, the plaintiff deliberately and intentionally failed to
supply goods as per demand and quality to the defendant.
3.1 It is stated that on receiving the grey fabric which was
supplied by plaintiff, the same was found inferior as comparison to
samples, despite that defendant paid amount against the received
goods on the assurance of the plaintiff that plaintiff will improve the
quality of goods in his next delivery and further assured the defendant
that plaintiff will reduce/adjust the price of said goods and will settle
the difference amount against the bills/invoices. It is further stated that
on the assurance and confirmation of plaintiff, defendant transferred a
CS (Comm) No. 337/2022 SH. RAKESH KUMAR JAIN Vs. M/S ROHIT ENTERPRISES Page No.5 of 32
sum of Rs.1,00,000/- on 07.07.2018, Rs.50,000/- on 11.07.2018 and
Rs.38,988/- on 12.07.2018 against bill no. JBT/18-19/279 and as such,
defendant paid entire sum of Rs.1,88,988/- against bill/ invoice no.
JBT/18-19/279 to the plaintiff. On 15.07.2018, the goods received
vide bill invoice no. JBT/18-19/316, for a sum of Rs.1,94,247/- were
found poor in quality wherein the defendant lodged a complaint before
the plaintiff in respect of said goods, but, the plaintiff again
apologized and requested the defendant that he shall reduce the
difference amount and adjust it in future. Thereafter, defendant paid
Rs.2,00,000/- on 30.07.2018 against bill no. JBT/18-19/286, dated
06.07.2018, out of the PDC amount of Rs.2,10,668/- which defendant
issued in favour of plaintiff on 24.08.2018 and the defendant several
time requested the plaintiff to return the said post dated cheque no.
000141, but, the plaintiff intentionally not returned the said cheque to
defendant and thereafter, he came to know that plaintiff has misused
the said cheque and filed compliant case under Section 138 N.I. Act
against him. Thereafter, defendant paid sum of Rs.1,00,000/- on
10.08.2018 against bill no. JBT/18-19/316, out of Rs.1,94,247/- after
the adjustment and thereafter the defendant terminated all business
deals with plaintiff, but, the plaintiff deliberately and intentionally
compel the defendant to make the payment of pending amount,
whereas, the defendant severed all business relation with plaintiff and
clearly refused to take any further delivery from the plaintiff, however,
plaintiff has issued fake and forged bill in the name of defendant’s
firm.
3.2 The defendant in his WS has admitted three invoices
bearing no. JBT/ 18-19/ 279 dated 05.07.2018 amounting to Rs.
1,88,988/-; JBT/ 18-19/ 286 dated 06.07.2018 amounting to Rs.
2,10,668/-; JBT/ 18-19/ 316 dated 15.07.2018 amounting to Rs.
1,94,247/- and the remaining three invoices were denied. However, in
the affidavit dated 05.07.2023 of admission and denial of the
documents of plaintiff filed by the defendant, the defendant has
CS (Comm) No. 337/2022 SH. RAKESH KUMAR JAIN Vs. M/S ROHIT ENTERPRISES Page No.6 of 32
admitted all the six invoices raised by the plaintiff.
3.3 It is stated that plaintiff approached the defendant and
demanded to make the payment of alleged balance amount sum of
Rs.1,04,935/- while defendant clearly refused, but the plaintiff got
angry and filed the present case, thereafter, the defendant also
transferred a sum of Rs.1,10,000/- in plaintiff’s account, so that he can
withdraw the case. Thereafter, plaintiff prepared fake and forged
bill/invoices and made forged signature of the employee of defendant,
whereas, the defendant is the sole owner and not having any
employee. Defendant has stated that plaintiff intentionally had
misused the said cheques and filed false case against the defendant
under Section 138 N.I. Act and wants to extort money from him. It is
stated that plaintiff has filed the present suit for recovery with motive
to extort money from the defendant, whereas, the defendant paid all
outstanding amount against the receipt and nothing is pending.
However, no such receipt is filed on record by the defendant.
Rest of the material contents of the plaint are denied by
the defendant and prayer has been made for dismissal of the suit heavy
cost.
4. Replication to the WS has been not been preferred by the
plaintiff.
5. As per order dated 13.09.2023, the defendant had filed
an affidavit of admission and denial of documents along with WS
which is dated 27.02.2023. As per this affidavit, the Non Starter
Report issued by DLSA was admitted, copy of order dated
27.08.2021/17.11.2021, page no. 21 to 22 was also admitted, page no.
23 to 103 containing the invoices, complaint under Section 138 N.I.
Act was partly admitted and partly denied. Similarly, page no. 103 to
213 containing the copy of civil suit was partly admitted and partly
denied. The invoices, the cheques, the cheque returning memo i.e.
CS (Comm) No. 337/2022 SH. RAKESH KUMAR JAIN Vs. M/S ROHIT ENTERPRISES Page No.7 of 32
page no. 40 to 64 was partly admitted and partly denied, page no. 214
to 215 i.e. copy of GST return file was denied and certificate under
Section 65B of Indian Evidence Act was also denied.
6. Perusal of the record reveals that the defendant has
initially filed an affidavit of admission and denial on 01.03.2023.
However, the same was not as per the Commercial Courts Act and one
last opportunity was granted to file the same vide order dated
21.03.2023. Thereafter, defendant had filed an affidavit of admission
and denial on 29.04.2023 and it was not clear as to which documents
are denied and which are admitted. The defendant had sought time to
file it afresh and the same was allowed vide order dated 25.05.2023.
Thereafter, the defendant had filed an affidavit of admission and
denial on 11.07.2023. Therefore, in the interest of justice, the affidavit
of admission and denial dated 05.07.2023 being filed on 11.07.2023 is
considered as affidavit of admission and denial filed by the defendant.
Perusal of the same reveals that the defendant in his affidavit of
admission and denial has admitted documents filed by the plaintiff
from pages 23-103 which includes the invoices, ledger account,
cheque bearing no. 000141 and 000153, cheque returning memos
dated 24.08.2022 and 10.09.2022, copy of legal notice dated
12.12.2018, copy of postal receipt along with delivery report and copy
of receipt (registered A.D.) along with delivery report. During
admission and denial on 13.09.2023, the defendant had admitted the
following documents:
• Non Starter Report of DLSA Page No.A;
• Court Order at page no. 21 to 22;
• Certified copy of the criminal complaint under Section 138 N.I.
Act along with invoices, cheques, returning memo etc. at page
No. 23 – 103;
• Copy of plaint and certified copy of the criminal complaint
along with the documents at page no. 214 – 216;
CS (Comm) No. 337/2022 SH. RAKESH KUMAR JAIN Vs. M/S ROHIT ENTERPRISES Page No.8 of 32
7. On 13.09.2023 after completion of pleadings of the
parties, the following issues were framed for consideration:
(i). Whether the plaintiff is entitled for money decree? If so, to
what amount? OPP.
(ii). Whether the plaintiff is entitled to any interest? If so, at
what rate and for which period? OPP.
(iii). Relief.
8. In support of its case, plaintiff has examined 3 witnesses.
Sh. Daman Preet Singh, Ahlmad in the Court of Ms. Shruti
Chaudhary, Ld. MM (Mahila Court)-01, East District, Karkardooma
Courts, Delhi examined as PW-1 has brought the complete record of
complaint case bearing no. 379/19, titled as ‘Rakesh Kumar Jain vs.
M/s Rohit Enterprises’ and proved the following documents on record:
• The certified copy of the complaint as Ex.PW1/1(OSR);
• The tax invoice No. JBT/18-19/279 dtd. 05.07.2018 as
Ex.PW1/2(OSR);
• The tax invoice No. JBT/18-19/286 dtd. 06.07.2018 as
Ex.PW1/3(OSR);
• The tax invoice No. JBT/18-19/316 dtd. 15.07.2018 as
Ex.PW1/4(OSR);
• The tax invoice No. JBT/18-19/327 dtd. 18.07.2018 as
Ex.PW1/5(OSR);
• The tax invoice No. JBT/18-19/328 dtd. 18.07.2018 as
Ex.PW1/6(OSR);
• The tax invoice No. JBT/18-19/421 dtd. 11.08.2018 as
Ex.PW1/7(OSR);
• The copy of Ledger Account of Rohit Enterprises, Ghaziabad
from 01.04.2018 to 10.12.2018 as Ex.PW1/8(OSR);
• The cheque bearing No. 000141 dated 24.08.2018 of amount
Rs.2,10,668/- in the name of Jain Bandhu Traders drawn at
Andhra Bank, Raj Nagar DC, Ghaziabad as Ex.PW1/9(OSR);
• The cheque bearing No. 000153 dtd. 10.09.2018 of amountCS (Comm) No. 337/2022 SH. RAKESH KUMAR JAIN Vs. M/S ROHIT ENTERPRISES Page No.9 of 32
Rs.3,00,000/- in the name of Jain Bandhu Traders drawn at
Andhra Bank, Raj Nagar DC, Ghaziabad as Ex.PW1/10(OSR);
• The return memo dated 17.11.2018 of cheque bearing No.
000141 dtd. 24.08.2018 of amount Rs.2,10,668/- in the name of
Jain Bandhu Traders drawn at Andhra Bank, Raj Nagar DC,
Ghaziabad as Ex.PW1/11(OSR);
• The return memo dated 17.11.2018 of cheque bearing No.
000153 dtd. 10.09.2018 of amount Rs.3,00,000/- in the name of
Jain Bandhu Traders drawn at Andhra Bank, Raj Nagar DC,
Ghaziabad as Ex.PW1/12(OSR);
• The legal notice dated 12.12.2018 as Ex.PW1/13(OSR);
• The postal receipts dated 14.12.2018 alongwith the tracking
reports as Ex.PW1/14(colly)(OSR);
• The Certificate u/s 65B of Indian Evidence Act as
Ex.PW1/15(OSR);
• The copy of Evidence by way of Affidavit on behalf of the
complainant/CW-1 of Rakesh Kumar Jain attested on
25.01.2019 as Ex.PW1/16(OSR);
• The copies of orders started from 30.01.2019 till 16.03.2022 as
Ex.PW1/17(colly)(OSR);
• The Notice framed on Rohit Gupta on dated 09.08.2019
alongwith the statement/PSE of Rakesh Kumar Jain dated
02.02.2019 as Ex.PW1/18(colly)(OSR).
PW-1 has not been cross examined by ld. counsel for defendant
despite opportunity being given.
8.1 Sh. Rakesh Kumar Jain, plaintiff has been examined as
PW-2, who tendered the following documents:
• The true copy of Order dated 27.08.2021 passed by Sh. Vineet
Kumar, ADJ-1, SHD/KKD/ Delhi as Ex.PW2/1;
• The true copy of Order dated 17.11.2021 passed by Ms.
Sukhvinder Kaur, Ld. DJ, Commercial Court, SHD/KKD/
Delhi as Ex.PW2/2;
CS (Comm) No. 337/2022 SH. RAKESH KUMAR JAIN Vs. M/S ROHIT ENTERPRISES Page No.10 of 32
• Copy of previously filed case upon same cause of action which
was dismissed as withdrawn with liberty to file fresh as per law
as Ex.PW2/3(colly);
• Printout taken from the site of GST Deptt. of the receipt of
Goods and Services Tax as Ex.PW2/4.
• Certificate u/s 65B of Indian Evidence Act as Ex.PW2/5;
• Affidavit under Order XI Rule 6(3) of the Commercial
Courts,Commercial Division and Commercial Appellate
Division of High Court, 2005 as Ex.PW2/6;
He also relied upon the documents which were already
exhibited and proved by PW1.
8.2 Another summoned witness Sh. Raghvendra Vikram
Singh, Commercial Tax Officer, State Tax Department, Raj Nagar,
Ghaziabad, U.P. examined as PW-3 have brought the summoned
record i.e. printout of tax liability and input tax credit summary which
shows the input credit entries and 6 tax invoices related to GSTIN
No.07AALPJ6327Q1Z2 showing entries monthwise in GSTR2A of
Rohit Enterprises GSTIN 09AQXPG4940J1Z7 as Ex.PW3/A (colly).
His authority letter is Ex.PW3/A and certificate under Section 65B of
Indian Evidence Act is Ex.PW3/C. Sh. Raghvendra Vikram Singh was
examined as PW-3 in place of Sh. Naveen Singh Rawat who was on
leave due to dengue and testimony of Sh. Naveen Singh Rawat was
not concluded. He was duly cross examined by ld. counsel for
defendant.
9. In rebuttal, defendant has examined himself as DW-1
who tendered his evidence by way of affidavit Ex.DW1/A. He was
duly cross examined by ld. counsel for plaintiff. Thereafter, DE was
closed on the statement of defendant Sh. Rohit Gupta.
10. The court has heard ld. counsel for the plaintiff as well
as ld. counsel for the defendant and have also gone through the
records of the case. The findings on the issues are as under :
CS (Comm) No. 337/2022 SH. RAKESH KUMAR JAIN Vs. M/S ROHIT ENTERPRISES Page No.11 of 32
ISSUE No.(i). Whether the plaintiff is entitled for money decree? If
so, to what amount? OPP.
11. The onus of proving this issue was upon the plaintiff.
The suit is commercial in nature and squarely falls within the purview
of Section 2 (1) (C) of Commercial Courts Act and plaintiff has also
duly complied with mandatory provision of Pre-Institution Mediation
and Conciliation as provided in Section 12 A of Commercial Courts
Act, as per the Non-Starter Report dated 06.12.2021 as per which
“respondent did not provide any consent to participate in the process
of Pre Institution Mediation despite giving date.”
12. As far as territorial jurisdiction is concerned, the order for
the goods were placed to the plaintiff at his registered address and the
goods were supplied to defendant from the place of the plaintiff, which is
within the territorial jurisdiction of this Hon’ble court. The offer and
acceptance were made within the jurisdiction of this court giving rise to
valid contract. Further goods were also sent from the place of the
plaintiff. Also, on the tax invoice Ex.PW1/4, the bank details are given
wherein the defendant was to make payment of the amount as mentioned
in the invoices. The said bank account of the plaintiff in Yes Bank
Limited is situated at Krishna Nagar, Delhi.
13. The Hon’ble Delhi High Court in Satyapal Vs. Slick Auto
Accessories Pvt. Ltd. & Ors., 2014 SCC Online Del 998 has held that
“Since the trial court has written, in my opinion, a
very thorough and an excellent judgment, I would
like to reproduce the relevant paras of the judgment
of the trial court instead of using my words. The
relevant paras of the trial court are 19 to 25 and the
same read as under:
“ISSUE NO. 1:
“19. The question to be answered is as to whether
this court has no territorial jurisdiction to try and
entertain the present suit. The onus to prove this issueCS (Comm) No. 337/2022 SH. RAKESH KUMAR JAIN Vs. M/S ROHIT ENTERPRISES Page No.12 of 32
was upon the defendant.
20. The defendants have contended that the
office/factory of the defendants is situated in
Bhiwadi, District-Alwar, Rajasthan and the delivery
of the goods was also made at Bhawadi, District-
Alwar, Rajasthan at the office/factory of the
defendants and therefore no part of the cause of
action arose within the jurisdiction of this court.
DW1 has deposed on these lines.
21. There is no doubt the material was supplied by
the plaintiff to the defendants at Bhiwadi, District-
Alwar, Rajasthan. The same is clear from the
invoices Ex. PW1/A and Ex. PW1/B. However even
if the material was delivered at Bhiwadi, District-
Alwar, Rajasthan it is clear that the material was
supplied from the office/factory of the plaintiff
situated at Jwala Nagar, Shahdara, Delhi-32 which
falls within the jurisdiction of this court.
22. It is a well established principle of law that
where, under a contract no place of payment is
specified, the debtor must seek his creditor and
therefore a suit for recovery is maintainable at the
place where the creditor resides or works for gain,
because a part of the cause of action arises at that
place also with the contemplation of section 20 (c) of
the Code of Civil Procedure. Reference may be made
to the judgments titled as “State of Punjab V. A. K.
Raha” reported as AIR 1964 CALCUTTA 418 (DB),
“Jose Paul v. Jose” reported as AIR 2002 KERALA
397 (DB), “Rajasthan State Electricity Board V. M/s
Dayal Wood Works” reported as AIR 1998 ANDHRA
PRADESH 381, “Munnisa Begum V. Noore Mohd.”
Reported as AIR 1965 ANDHRA PRADESH 231
and “State of U.P.v. Raja Ram” reported as AIR 1966
AllAHABAD 159.
23. In the judgment titled as “State of Punjab v. A. K.
Raha” reported as AIR 1964 CALCUTTA 418 (DB)
it was clearly held:
“………..The general rule is that where no place of
payment is specified in the contract either expressly
or impliedly, the debtor must seek the creditor, see
The Eider (1893) P 119 at p. 136, Drexel v. Drexel.
(1916) 1 Ch 251 at p. 261, North Bengal, Das
Brothers Zemindary Co. Ltd V. Surendera Nath Das,
ILR (1957) 2 Cal 8. The obligation to pay the debt
involves the obligation to find the creditor and to pay
him at the place where he is when the money is
payable. The application of the general rule is not
excluded because the amount of debt is disputed….”
CS (Comm) No. 337/2022 SH. RAKESH KUMAR JAIN Vs. M/S ROHIT ENTERPRISES Page No.13 of 32
24. In the judgment titled as Sreenivasa Pulvarising
vs Jal Glass & Chemicals pvt. Ltd. reported as AIR
1985 Cal 74 it was also held:
“……In a contract of the nature now under
consideration performance of the contract consists
not only of delivery of the goods but also of payment
of the price. Therefore, cause of action for a suit on
breach of such a contract would arise not only where
the goods were to be delivered but also where the
price would be payable on such delivery…..”
It was further held:
“…….9. Therefore, the law continues to remain the
same and in a suit arising out of a contract, a part of
the cause of action arises at the place where in
performance of the contract any money to which the
suit relates in payable….”
Adverting to the facts of the present case
office/factory of the Plaintiff is situated at Jwala
nagar, Shahdara, Delhi-32. No place of payment has
been specified in the contract/bills/invoices. The
defendants are liable to make the payment for the
goods supplied to them. No application was made by
the defendants to the plaintiffs for fixing a place of
payment and Sec. 49 of the Indian Contract Act
cannot apply to the facts of the case. Therefore, the
payment was to be made at the office of the plaintiff.
Further the purchase order was placed at Jwala
Nagar, Shahdara, Delhi-32 and the goods were
supplied from Jwala nagar, Shahdara, Delhi-32
Therefore a part of th cause of action definitely arises
at Jawala Nagar, Shahdara, Delhi-32. Hence the
present suit for recovery of the sale price can be filed
before this court as the office of the plaintiff is
situated within the territorial limits of the jurisdiction
of the court.
25. I therefore hold that this court has the territorial
jurisdiction to try and entertain the present suit. This
issue is therefore decided in favour of the plaintiff
and against the defendants.”
(underlining added)
6. I completely agree with the conclusion of the trial
court because it is settled law that the debtor has to
seek the creditor and since no place of payment was
agreed upon, payment would have been made to the
seller/appellant who is residing and working for gain
at New Delhi. Trial court has also rightly relied upon
CS (Comm) No. 337/2022 SH. RAKESH KUMAR JAIN Vs. M/S ROHIT ENTERPRISES Page No.14 of 32
Section 49 of the Indian Contract Act, 1872 that it
was upon the respondent no.1/defendant no. 1 to fix
the place of payment and which has not been done,
and therefore payment would have been made by the
debtor to the creditor at the place of the
creditor/plaintiff/appellant.”
14. There is nothing on record to suggest that any place of
payment was agreed upon between the parties. As no place of payment
seems to have been agreed upon by the parties, the principal that the
debtor must seek the creditor would apply. The bank account of the
plaintiff bank is in Yes Bank Limited at Krishna Nagar, Delhi Branch
which falls within the jurisdiction of present court and therefore, also, the
present court has territorial jurisdiction to decide the present case.
15. This court also has the pecuniary jurisdiction over the
matter since the suit amount claimed by the plaintiff is more than the
specified value of Rs.3 lacs of the Commercial Courts. The Invoices
are of the year 2018. The plaintiff initially filed a regular civil suit on
10.08.2021 before the court of Ld. ADJ, Shahdara District. However,
vide order dated 27.08.2021, it was transferred to the concerned
Commercial court, as the suit involved some commercial dispute. Vide
order dated 17.11.2021, owing to non-compliance of the Pre-Institution
Mediation Settlement under section 12A of The Commercial Courts Act,
the suit was dismissed as withdrawn with liberty to file afresh, as per law.
16. Thereafter, the plaintiff filed the present suit after
complying with section 12A of the Commercial Courts Act, 2015 and
obtaining a Non-Starter Report. Therefore, the period between
10.08.2021 to 17.11.2021 would stand excluded and the period between
01.10.2021 to 06.12.2021 for complying with section 12A of the CC Act
shall also be excluded in view of Section 12A(3) of the Act. The Invoices
Ex.PW1/2 to Ex.PW1/7 are of July and August, 2018 and the last
payment was made on 01.11.2019 as per the plaint for an amount of
Rs.1,10,668/-. It is pertinent to mention that the Apex Court has in the
CS (Comm) No. 337/2022 SH. RAKESH KUMAR JAIN Vs. M/S ROHIT ENTERPRISES Page No.15 of 32
order dated 10.01.2022 in suo moto Writ Petition(c) 2020 In Re:
Cognizance for extension of limitation, while discussing the difficulties
faced by litigants due to outbreak of Corona Virus, directed that period
from 15.03.2020 till 28.02.2022 shall stand excluded for the purpose of
limitation as may be prescribed under any general or specific laws in
respect of all judicial or quasi judicial proceedings. The present suit has
been instituted on 19.05.2022 and thus, is filed within the period of
limitation.
17. The stand taken by the defendant in the WS is that he
had issued cheque bearing no. 000141 amounting to Rs. 2,10,668/-
against bill no. JBT/18-19/286, dated 06.07.2018, out of which he
paid a sum of Rs.2,00,000/- on 30.07.2018 and plaintiff had misused
the same and filed the complaint case under Section 138 N.I. Act.
Perusal of Ledger Account Ex.PW1/8 reveals that the amount of
Rs.2,10,668/- was debited against bill no. JBT/18- 19/286 Ex.PW1/3
and thereafter, payment of Rs.1,00,000/- was credited on 07.07.2018,
Rs.50,000/- was credited on 11.07.2018 and Rs.38,989/- was credited
on 12.07.2018, total comes to Rs.1,88,988/- which pertains to the
amount of Invoice No. JBT/18- 19/279 Ex.PW1/2. PW-2 has duly
proved the cheque bearing no. 000141 amounting to Rs.2,10,668/- as
Ex.PW1/9 and has stated in his cross examination that in regard to
second bill, defendant provided a post-dated cheque of Rs.2,10,668/-
and the cheque was dishonored. The cross of PW-2 being relevant is
reproduced hereinbelow:
“…..At the time of first delivery, the defendant
did not provide any cheque to me (Vol. After
passing 2-3 days, the defendant transferred an
amount of Rs. One lac through RTGS and
thereafter, he cleared first bill by paying the
amount in three installments). In regard to the
second bill, the defendant provided a post-datedCS (Comm) No. 337/2022 SH. RAKESH KUMAR JAIN Vs. M/S ROHIT ENTERPRISES Page No.16 of 32
cheque of the amount of Rs.2,10,668/- and that
cheque was dishonored. I have filed the criminal
complaint case in regard to the said cheque. Prior
to dishonor of the said cheque, the defendant
approached me to supply more goods which was
supplied by me to him. Defendant used to receive
the goods himself from my godown and his
associate used to come with him. I used to take
signature of the receiver of the person at the
instructions of my customer……”
18. As per the case of plaintiff, defendant placed order for
grey fabric on 05-07-2018 and 06-07-2018 for an amount of
Rs.1,88,988/- and Rs.2,10,668/-, which was duly delivered vide bill
no. JBT/18-19/279 Ex.PW1/2 and JBT/18-19/286 Ex.PW1/3. The
defendant has also not disputed the delivery of these goods against bill
no. JBT/18-19/279 and JBT/18-19/286 and further stated that he
transferred a sum of Rs.1,00,000/- on 07.07.2018, Rs.50,000/- on
11.07.2018 and Rs.38,988/- on 12.07.2018 against bill no. JBT/18-
19/279 and as such, he paid entire sum of Rs.1,88,988/- against bill
no. JBT/18-19/279. On 15.07.2018, further goods were received by
the defendant vide bill invoice no. JBT/18-19/316 Ex.PW1/4,
amounting Rs.1,94,247/- and according to the defendant the same
were found poor in quality, wherein defendant lodged a complaint
before the plaintiff in respect of said goods. Even if the plea of the
defendant is assumed to be correct, then also no documentary proof
such as any email, message, letter or complaint have been filed by the
defendant along with list of documents, neither he has led any
evidence to prove his plea that the grey fabric supplied by plaintiff and
received by him was of inferior quality.
19. Though, as per the defendant he has severed all business
relation after receiving all his goods against all the first three invoices
CS (Comm) No. 337/2022 SH. RAKESH KUMAR JAIN Vs. M/S ROHIT ENTERPRISES Page No.17 of 32
i.e. tax invoice No. JBT/18-19/279 dtd. 05.07.2018 Ex.PW1/2, tax
invoice No. JBT/18-19/286 dtd. 06.07.2018 Ex.PW1/3 and tax
invoice No. JBT/18-19/316 dtd. 15.07.2018 Ex.PW1/4 and has not
received the goods against tax invoice No. JBT/18-19/327 dtd.
18.07.2018 Ex.PW1/5, tax invoice No. JBT/18-19/328 dtd.
18.07.2018 Ex.PW1/6 and tax invoice No. JBT/18-19/421 dtd.
11.08.2018 Ex.PW1/7 and according to the defendant he has not taken
input tax credit regarding the remaining three invoices, however, the
testimony of PW-3 Sh. Raghvendra Vikram Singh has clearly
established that the defendant had taken input credit of all the six
invoices. The defendant in his affidavit of admission and denial has
also admitted all the invoices. It is, thus, clear that the defendant had
received goods against all the six invoices and had placed orders for
the goods against invoices Ex.PW1/5, Ex.PW1/6 and Ex.PW1/7. In
view of the testimony of PW-3, it is clear that defendant has purchased
the goods against all the six invoices and his plea that the goods
received against the two invoices were poor in quality is clearly an
afterthought. Defendant also stated that the plaintiff had assured him
that the amount would be adjusted, but, has not stated as to how much
amount was agreed to be adjusted against the alleged defective/poor
quality goods. It is highly surprising that when the defendant was
aware that the goods supplied by the plaintiff are not up to mark or are
of inferior quality, despite that he placed the next three orders which
were delivered, vide bill no. JBT/18-19/327 Ex.PW1/5 and JBT/18-
19/328 Ex.PW1/6 and Invoice No. JBT/18-19/421 Ex.PW1/7
amounting to Rs.2,08,379/-, Rs.2,16,693/- and Rs.3,96,915/-
respectively and against which defendant has also claimed tax credit
input. Moreover, the defendant had issued cheque bearing no. 000153,
dated 10.09.2018 for Rs.3,00,000/- and he transferred Rs.2,00,000/-on
the 30.07.2018 and Rs.1,00,000/- on 10.08.2018 and gave further
order to plaintiff for purchase of grey fabric which was delivered vide
bill no. JBT/18-19/421 Ex.PW1/7 dated 11.08.2018 amounting
Rs.3,96,915/-. Though, perusal of Ledger account reveals that payment
CS (Comm) No. 337/2022 SH. RAKESH KUMAR JAIN Vs. M/S ROHIT ENTERPRISES Page No.18 of 32
of Rs.2,00,000/- was made by defendant on 30.07.2018, however, it
cannot be said that the payment was specifically made against bill no.
JBT/18-19/286, dated 06.07.2018, as during the course of business
transactions between the plaintiff and defendant, as reflected in ledger,
goods against various other orders also have been supplied by the
plaintiff to defendant. Even otherwise, the defendant has not produced
any documentary proof in support of his contention that the alleged
security cheque has been misused by the plaintiff.
20. As per the defendant, he had received goods against the
first three invoices i.e.Ex.PW1/2, Ex.PW1/3 and Ex.PW1/4 and
thereafter as the goods were of inferior quality he severed all business
relation with the plaintiff and had not received the goods against tax
invoice dtd. 18.07.2018 Ex.PW1/5, tax invoice dtd. 18.07.2018
Ex.PW1/6 and tax invoice dtd. 11.08.2018 Ex.PW1/7. As per the
defendant, he had issued cheque dated 10.09.2018 in favour of
plaintiff only for security purpose on account of future dealing
between the parties. If the defendant had severed all business relation
with the plaintiff after the payment of Rs.1,00,000/- on 10.08.2018 as
stated in para 11 of the preliminary objections of WS, than there was
no reason for him to have issued a cheque on 10.09.2018 for security
purpose on account of future dealing between the parties. The cheque
number is also relevant herein as the cheque number 000141 was
issued in discharge of the bill dated 06.07.2018 for an amount of
Rs.2,10,668/- and, therefore, the cheque bearing no. 000153, which is
subsequent in series to cheque number 000141 could not have been
issued for security purpose.
21. The onus to prove that the cheque issued were security
cheques and no liability was due upon the defendant at the time of
presentation of the cheques was upon the defendant. The defendant
has not filed any documentary proof in respect of the fact that no
liability was due upon him at the time of presentation of cheques.
CS (Comm) No. 337/2022 SH. RAKESH KUMAR JAIN Vs. M/S ROHIT ENTERPRISES Page No.19 of 32
Therefore, in view of unsubstantiated plea of the defendant with
respect to security cheques being missued cannot be considered as true
and sustainable.
22. Nothing has come in the cross examination of PW-1 to
reveal that cheque in question was taken by plaintiff from the
defendant as security cheque or that the same were misused. PW-1
categorically denied all the suggestions put forth to him regarding
misuse of the cheque in question. The relevant part of cross
examination of PW-2 is reproduced as follows:
“…..It is wrong to suggest that I used to take
cheques from the defendant in advance before
delivery of goods. It is further wrong to suggest
that the defendant denied to receive the goods
when he found the faults in the delivered
goods……
…..It is further wrong to suggest that I have
misused the cheques-in-question against the
defendant for extorting the money and I have
filed the present false case along with another
case u/s 138 NI Act against the defendant…..”
23. In the absence of any specific averments, the plea of the
defendant that plaintiff had misused the cheque given by him as
security cheque, is vague and afterthought. It is thus, not proved on
record that the defendant had cleared the account of the plaintiff as
stated by him in the WS.
24. As far as cheques Ex.PW1/9 and Ex PW 1/10 are
concerned, the defendant has failed to lead any evidence. Per contra, the
plaintiff has proved the cheque Ex.PW1/9 and Ex PW-1/10 and the
return memo Cheque Return Memos dated 17.11.2018 Ex.PW1/11 and
CS (Comm) No. 337/2022 SH. RAKESH KUMAR JAIN Vs. M/S ROHIT ENTERPRISES Page No.20 of 32
Ex PW-1/12 at the time of evidence and the testimony of PW2 qua the
cheque and the returning memo has remained unshaken. The testimony
of PW-2 is otherwise also reliable and trustworthy.
25. The defendant during his cross examination has admitted
that he has received the goods against the invoice no. JBT/18-19/279,
JBT/18-19/286 and JBT/18-19/316 against delivery challan and has
denied the receipt of delivery of goods against other invoices i.e. JBT/18-
19/327, JBT/18-19/328 and JBT/18-19/421. The relevant part of cross
examination of DW-1 is reproduced as follows:
“I had received the goods against the invoice no.
JBT/1819/279, JBT/1819/286 and JBT/1819/316
against delivery challan. It is wrong to suggest
that I had never said that I will generate the E-
way Bill after receiving of the goods. I had
received the delivery of all six bills. Again said, I
had received goods against 3 invoices and against
delivery challan, plaintiff has stated that he
would generate the E-way bills against 3
invoices. Again said I had not received the
delivery against six invoices……
……I have not received goods against the invoice
no. JBT/1819/327, though, the E-way Bill
number is mentioned in the invoices…… I have
not taken the delivery of invoice no.
JBT/1819/328 and JBT/1819/421 through cycle
rickshaw from the shop of the plaintiff.”
26. In this regard as already observed, the plaintiff has
summoned a witness from GST Department, Ghaziabad, UP and
examined him as PW-3. The witness brought the summoned record ie.
photocopy of tax liability and input tax credit summary which shows
CS (Comm) No. 337/2022 SH. RAKESH KUMAR JAIN Vs. M/S ROHIT ENTERPRISES Page No.21 of 32
the input credit entries and 6 tax invoices related to GSTIN No.
07AALPJ632Q1Z2 showing entries monthwise in GSTR2A of Rohit
Enterprises GSTIN 09AQXPG4940J1Z7 and the same were exhibited
Ex. PW3/A (colly). PW-3 in his cross examination has stated that Sh.
Rohit Gupta, Proprietor of Rohit Enterprises GSTIN No. 09
AQXPG4940J1Z7 had taken input tax credit of all six invoices dated
05.07.2018, 06.07.2018, 15.07.2018, 18.07.2018, 18.07.2018 and
11.08.2018 with the purchase from M/s Jain Bandhu Traders prop. Sh.
Rakesh Kumar Jain, GSTIN No. 07AALPJ632Q1Z2. He further
deposed in his cross examination that E-way Bills are not compulsory
for depositing the GST or for claiming the input tax credit. The
relevant part of his cross examination is reproduced as follows:
“All the six invoices mentioned in the Ex.
PW-3/A (Colly), the Rohit Gupta, proprietor of
Rohit Enterprises GSTIN No. 09
AQXPG4940J1Z7 had taken input tax credit of
all six invoices dated 05.07.2018, 06.07.2018,
15.07.2018, 18.07.2018, 18.07.2018 and
11.08.2018 with the purchase from Jain Bandhu
Traders prop. Sh. Rakesh Kumar Jain, GSTIN
No. 07AALPJ632Q1Z2.
E-way bill is not compulsory for depositing the
GST or for claiming input tax credit.”
Therefore, the plea of the defendant that he has not
taken the input tax credit of the GST of the above said bills is false in
light of the testimony of PW-3.
27. PW-3 has proved the record of GST return of claiming
the input tax credit. Since the testimony of the PW-3 is supported by
the official records and therefore, it is proved that defendant has
claimed tax credit input against all six invoices. Thus, the plea of the
CS (Comm) No. 337/2022 SH. RAKESH KUMAR JAIN Vs. M/S ROHIT ENTERPRISES Page No.22 of 32
defendant that he has not received delivery of goods pertaining to
invoices no. JBT/1819/327, JBT/1819/328 and JBT/1819/421 is not
sustainable. Though, the plaintiff has not filed any purchase order for
the orders placed by the defendant, however, that has been sufficiently
answered by the PW-2 in his cross examination. The relevant extract
of cross examination of PW-2 is reproduced as follows:
” I have not filed any purchase order because the
defendant used to come physically and used to
disclose his demands to me.”
28. It is also pertinent to note here that the defendant has not
produced any proof of the fact that he had placed purchase orders
against invoices Ex.PW1/2 to Ex.PW1/4 (admitted invoices). If the
defendant takes the plea that no purchase order has been filed, then the
defendant should have filed some proof of the fact that he used to
place orders through purchase orders and not orally, at least to the
extent of three invoices admitted by the defendant to contradict the
testimony of the plaintiff. Therefore, in absence of any sufficient
material to contradict the witness on this point, the reason given by the
plaintiff that no purchase orders were given in writing, can be
considered as fair and reasonable.
29. The defendant has also contended that the ledger filed by
the plaintiff is incomplete as it does not show a payment made in the
year 2019. However, it can be observed that there is specific and clear
admission on the part of plaintiff with respect to the payment made in
year 2019 in his pleadings as well as in his testimony. As per the
ledger account Ex.PW1/A, the same is from 01.04.2018 to 10.12.2018
and the outstanding amount is Rs.9,26,902/-. The plaintiff in his plaint
has stated that an amount of Rs.1,10,668/- was transferred on
01.11.2019 and thereafter, the balance remains is Rs.8,16,234/- and
this payment has been made on 01.11.2019, which could not be
CS (Comm) No. 337/2022 SH. RAKESH KUMAR JAIN Vs. M/S ROHIT ENTERPRISES Page No.23 of 32
reflected in the ledger which is from 01.04.2018 to 10.12.2018, but,
the plaintiff has fairly admitted this payment in the plaint and has
reduced the said amount from the principal, therefore, even if the
ledger account which is been proved on record shows the balance of
Rs.9,26,902/, the same cannot be said to be incomplete and it can be
taken into account accordingly in the interest of justice.
30. As far as the payment given by the defendant to the
plaintiff is concerned, the perusal of the record reveals that the
defendant has paid a total of Rs. 5,99,656/- whereas he has admitted
only three invoices no. 279, 286 and 316 amounting to Rs. 5,93,903.
The detailed calculation is set out below as follows:
Details of the invoice issued by the plaintiff
S. no. Particulars of Invoice Admitted/ Amount of the
Denied by the invoice
defendant
1. JBT/ 18-19/279 Admitted Rs. 1,88,988/-
2. JBT/ 18-19/ 286 Admitted Rs. 2,10,668/-
3. JBT/ 18-19/ 316 Admitted Rs. 1,94,247/-
Total Rs. 5,93,903/-
4. JBT/ 18-19/327 Denied Rs. 2,08,379/-
5. JBT/ 18-19/ 328 Denied Rs. 2,16,693/-
6. JBT/ 18-19/ 421 Denied Rs. 3,96, 915/-
CS (Comm) No. 337/2022 SH. RAKESH KUMAR JAIN Vs. M/S ROHIT ENTERPRISES Page No.24 of 32
31. The details of the payment made by the defendant to the
plaintiff is shown in tabular form as follows:
S. No. Details of payment Payment
1. Bank Transfer on Amount is as follows
07.07.2018 Rs. 1,00,000/-
11.07.2018 Rs. 50,000/-
12.07.2018 Rs. 38,988/-
2. Bank Transfer on Rs. 2,00,000/-
30.07.2018
3. Bank Transfer on Rs. 1,00,000/-
10.08.2018
4. Bank Transfer on Rs. 1,10,668
01.11.2019
TOTAL Rs. 5,99,656/-
The above said details clearly illustrates that the
defendant has made payment which is in excess of the amount of three
bills admitted by him and no reasonable explanation has been
provided by the defendant for payment of excess amount.
32. The defendant in his WS has taken the plea that the
goods supplied by the plaintiff were of inferior quality and not as per
the standard demanded by the defendant and that he has filed
complaint with the plaintiff. However, he has not provided any
document in support of this contention. The relevant part of the cross
examination of DW-1 is reproduced as below:
“I had not given any written notice to the plaintiff with
respect to supply of the defective goods on various
dates. I had not returned any defective/ inferior goods to
the plaintiff which was received by me from the plaintiff
on various dates.”
CS (Comm) No. 337/2022 SH. RAKESH KUMAR JAIN Vs. M/S ROHIT ENTERPRISES Page No.25 of 32
33. It is also admitted by the defendant that he has not filed
any complaint against the defendant and no written agreement was
executed between the plaintif and defendant between the parties in this
regard. The relevant cross of the defendant has been re-produced as
follows:
“I had not given any complaint to the Trade Union of
Gandhi Nagar in regard of supply of poor quality of
goods by the plaintiff. No written agreement was ever
executed between me and the plaintiff when I gave one
more opportunity to the plaintiff to supply the good
quality of goods when he priorly supplied poor quality
of goods. (Vol. Plaintiff assured me on telephone to me
that he will supply the good quality of goods in future).
I can not produce any call/ audio recording which can
show that plaintiff assured me on telephone that he will
supply the good quality of goods in future and he will
not repeat the poor quality of goods.”
34. Also, the defence taken by the defendant with respect to
substandard quality is not established. It is also pertinent to mention
here that when the defendant was asked about his GST details he has
given evasive reply. The relevant part of the Cross-examination of
DW-1 is as follows:
“I can not tell whether my GST Number is
09AQXPG4940J1Z7 or not.
Ques. Whether the amount of GST paid by you
to the plaintiff while purchasing the goods from the
plaintiff, the said GST amount is reflected in your GST
account?
Ans. No, said GST is not reflected in my account. (Vol.
CS (Comm) No. 337/2022 SH. RAKESH KUMAR JAIN Vs. M/S ROHIT ENTERPRISES Page No.26 of 32
The said GST amount was not reflected on the date of
bill, however, the said GST reflected later on)…..”
35. It is a settled law that every trial is a search of truth and
the purpose and objective of trial is to secure a fair and impartial
administration of justice between the parties to the litigation. The onus
of proving its case was upon the plaintiff and the plaintiff has discharged
his burden by leading cogent evidence. Plaintiff has duly proved that he
has supplied the goods to the defendant as per invoices Ex.PW1/2 to
Ex.PW1/7 and the principal amount remaining against the said invoice is
Rs.8,16,234/- which the defendant is liable to pay to the plaintiff. Thus,
the plaintiff is entitled to amount of Rs. 8,16,234/- as principal
amount. Accordingly, the issue no. (i) is answered in favour of plaintiff
and against the defendant.
ISSUE No.(ii). : Whether the plaintiff is entitled to any interest?
If so, at what rate and for which period? OPP.
36. As per the plaintiff a total of Rs. 8,16,234/- was due
upon the defendant. The plaintiff has proved the above said amount by
proving the 6 invoices, ledger etc and also the defendant has not been
able to rebut the case of plaintiff. The plaintiff has also claimed an
amount of Rs. 1,71,409/- as an interest calculated @ 1% per month
from 06.11.2019 till 06.08.2021 i.e. the period prior to institution of
previous suit which was initially filed as a regular civil suit on
10.08.2021 before the court of Sh. Vineet Kumar, Ld. ADJ, Shahdara
District. Thereafter, vide order dated 27.08.2021 (Ex.PW2/1), it was
transferred to the court of ld. Principal District & Sessions Judge,
Shahdara for appropriate directions as the suit involved commercial
dispute. Vide order dated 17.11.2021 (Ex.PW2/2), ld. Predecessor of this
court had dismissed the suit as withdrawn with liberty to file afresh. The
plaintiff has claimed the above said amount as interest on the
outstanding sum of Rs.8,16,234/- as the defendant has faulted on his
legal obligation to clear the due amount. The plaintiff has also
CS (Comm) No. 337/2022 SH. RAKESH KUMAR JAIN Vs. M/S ROHIT ENTERPRISES Page No.27 of 32
quantified the pre suit interest as per Order VII Rule 2A CPC and no
question has been put to the plaintiff/ PW2 during the cross
examination regarding interest.
37. The law relating to the award of interest has been
provided under Section 34 of the Code of Civil Procedure, 1908. It
provides as follows:
“34. Interest: (1) 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, 1 [with further interest at
such rate not exceeding six per cent. 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 :
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 six per cent. per annum, but shall not
exceed the contractual rate of interest or where
there is no contractual rate, the rate at which
moneys are lent or advanced by nationalised
banks in relation to commercial transactions.”
38. On a plain reading of Section 34 CPC it is clear that the
award of interest in a suit is a discretion of the court and the discretion
will have to be applied judiciously. However, it is equally important
CS (Comm) No. 337/2022 SH. RAKESH KUMAR JAIN Vs. M/S ROHIT ENTERPRISES Page No.28 of 32
that a proviso was added by way of amendment Act of 1976, which
provided that court may exceed rate of 6%, but, it cannot exceed rate
agreed contractually between the party.
39. In the case of Secretary Irrigation Department
Government of Orrisa Vs. G. C. Roy AIR 1992 Supreme Court 732,
Hon’ble Supreme court observed that as far as award of interest is
concerned, that a person deprived of the use of money to which he is
legitimately entitled has a right to be compensated for the deprivation,
call it by any name. It may be called interest, compensation or
damages. This was held to be the principle underlying Section 34 of
the Code of Civil Procedure.
40. In the case of Central Bank of India vs. Ravindra (AIR
2001 Supreme Court 3095), it was observed as follows:
“Mulla on the Code of Civil Procedure (1995
Edition) sets out three divisions of interest as
dealt in Section 34 of CPC. The division is
according to the period for which interest is
allowed by the Court, namely
– (1) interest accrued due prior to the institution
of the suit on the principal sum adjudged; (2)
additional interest on the principal sum adjudged,
from the date of the suit to the date of the decree,
at such rate as the Court deems reasonable; (3)
further interest on the principal sum adjudged,
from the date of the decree to the date of the
payment or to such earlier date as the Court
thinks fit, at a rate not exceeding 6 per cent per
annum. Popularly the three interests are called
pre-suit interest, interest pendente lite and
interest post-decree or future interest. Interest forCS (Comm) No. 337/2022 SH. RAKESH KUMAR JAIN Vs. M/S ROHIT ENTERPRISES Page No.29 of 32
the period anterior to institution of suit is not a
matter of procedure; interest pendente lite is not a
matter of substantive law (See, Secretary,
Irrigation Department, Government of Orissa &
Ors. v. G.C. Roy, [1992] 1 SCC 508, Pr. 44-iv).
Pre-suit interest is referable to substantive law
and can be sub-divided into two sub-heads; (i)
where there is a stipulation for the payment of
interest at a fixed rate; and (ii) where there is no
such stipulation. If there is a stipulation for the
rate of interst, the Court must allow that rate upto
the date of the suit subject to three exceptions; (i)
any provision of law applicable to money lending
transactions, or usury laws or any other debt law
governing the parties and having an overriding
effect on any stipulation for payment of interest
voluntarily entered into between the parties; (ii)
if the rate is penal, the Court must award at such
rate as it deems reasonable; (iii) even if the rate is
not penal the Court may reduce it if the interest is
excessive and the transaction was substantially
unfair. If there is no express stipulation for
payment of interest the plaintiff is not entitled to
interest except on proof of mercantile usage,
statutory right to interest, or an implied
agreement. Interest from the date of suit to date
of decree is in the discretion of the Court. Interest
from the date of the decree to the date of payment
or any other earlier date appointed by the Court is
again in the discretion of the Court – to award or
not to award as also the rate at which to award.”
CS (Comm) No. 337/2022 SH. RAKESH KUMAR JAIN Vs. M/S ROHIT ENTERPRISES Page No.30 of 32
41. In the case of Punjab and Sind Bank v. M/s Allied
Beverages and Ors. Civil Appeal No. 8443 of 2010 dated 01.10.2010,
it was observed by the Hon’ble SC that:
“In Sham Lal Narula (Dr) v. CIT this Court held
that interest is paid for the deprivation of the use
of the money. The essence of interest in the
opinion of Lord Wright, in Riches v. Westminster
Bank Ltd. All ER at p. 472 is that it is a payment
which becomes due because the creditor has not
had his money at the due date. It may be regarded
either as representing the profit he might have
made if he had had the use of the money, or,
conversely, the loss he suffered because he had
not that use. The general idea is that he is entitled
to compensation for the deprivation; the money
due to the creditor was not paid, or, in other
words, was withheld from him by the debtor after
the time when payment should have been made,
in breach of his legal rights, and interest was a
compensation whether the compensation was
liquidated under an agreement or statute.”
Thus, it can be concluded that the award of interest on
the principal amount is vested with the court as a discretionary power.
However, it has to be applied upon application of judicial mind and
the rate at which it has to be applied has to be considered in light of
facts and circumstances of each case.
42. The plaintiff has not claimed any specific rate of interest
on the principal amount in the prayer clause, but, has calculated the
interest @ 1% per month i.e. 12% per annum on the outstanding
amount. However, as the due amount has not been paid by the
CS (Comm) No. 337/2022 SH. RAKESH KUMAR JAIN Vs. M/S ROHIT ENTERPRISES Page No.31 of 32
defendant to the plaintiff, therefore, plaintiff is entitled to a reasonable
rate of interest on the principal amount. Therefore, in the interest of
justice, plaintiff is awarded interest @ 9% per annum on the principal
amount i.e. Rs. 8,16,234/- from 06.11.2019 till its actual realization.
ISSUE No. (iii)/Relief:
43. In view of the above discussion, the suit of the plaintiff
is decreed in favour of the plaintiff against the defendant and it is
directed that plaintiff is entitled to an amount of Rs.8,16,234/- as
principal along with interest @ 9% per annum from 06.11.2019 till its
actual realization and cost to the extent of court fees and litigation cost
of Rs.70,000/-.
Decree Sheet be prepared accordingly.
File be consigned to Record Room. Digitally signed
by KIRAN
KIRAN BANSAL
Date:
BANSAL 2025.01.23
12:44:24
+0530Announced in the open court (Kiran Bansal)
on 23.01.2025 District Judge, Commercial Court-02
Shahdara, Karkardooma
Delhi/23.01.2025CS (Comm) No. 337/2022 SH. RAKESH KUMAR JAIN Vs. M/S ROHIT ENTERPRISES Page No.32 of 32