Delhi District Court
M/S Multicom Exports vs Decor Arts Interior Solutions Pvt Ltd on 27 August, 2024
IN THE COURT OF Ms. NEELAM SINGH
DISTRICT JUDGE (COMM-02),
SOUTH-EAST DISTRICT, SAKET COURT, NEW DELHI
CS (COMM) 216/2020
Counter-claim; CS (COMM) 475/2023
M/s Multicom Exports
Through Rajinder Dhawan, Proprietor
Having its office at:
T-3, Okhla Industrial Area
Phase-II, New Delhi
Also at:
F-4, East of Kailash,
LGF, New Delhi-110065 ..... Plaintiff
(Defendant/ non-counter claimant in the counter-claim)
Vs.
Decor Arts Interior Solutions Private Limited
Through Authorized Representative
C-94, Second Floor,
Okhla Industrial Area, Phase-I,
New Delhi-110020
Also at:
(i) Level-4, Regus Centre, Rectangle One,
D-4, Commercial Complex, Saket,
New Delhi-110017
(ii) F-63, Green Park
New Delhi-110016 .....Defendant
(Plaintiff/ counter-claimant in the counter-claim)
Date of Institution of the suit: 22.08.2020
Date of institution of counter-claim: 17.05.2023
Arguments concluded on : 02.08.2024
Date of Judgment: 27.08.2024
CS (COMM) 216/2020 M/s Multicom Exports Vs. Decor Arts Interior Solutions Pvt Ltd Page 1 of 33
CS (COMM) 475/2023 M/s Decoarts Interior Solutions Pvt. Ltd. Vs. M/s Multicom Exports
JUDGMENT
1. Vide this judgment, I shall decide the present suit for recovery of Rs.15,10,679/- alongwith pendente lite and future interest at the rate of 18% per annum filed by M/s Multicom Exports against M/s Decor Arts Interior Solutions Private Limited and also the counter-claim filed by the defendant M/s Decor Arts Interior Solutions Private Limited for an amount of Rs.21,50,000/- alongwith interest at the rate of 12% per annum against the plaintiff M/s Multicom Exports. (It is pertinent to mention that the counter-claim of the defendant is being adjudicated alongwith the main suit only on the request of the defendant as it is submitted by Ld. Counsel for the defendant that the evidence lead in case CS (COMM) 216/2020 be also considered as an evidence while adjudicating upon his counter- claim.) The crux of facts stated in brief is noted below:
Case of the plaintiff;
2. The plaintiff, M/s Multicom Exports, is a proprietorship concern based in New Delhi, engaged in the business of importing wooden moulding, mount boards, and other framing materials for domestic trading. The business is managed by its proprietor, Shri Rajinder Dhawan, who is duly authorized to institute the present suit.
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3. It is submitted that in December 2017, the defendant, Decor Arts Interior Solutions Private Limited, approached the plaintiff for the purchase of the products supplied by the plaintiff. After negotiations, the defendant began purchasing framing material from the plaintiff.
4. It is submitted that the defendant placed several orders with the plaintiff firm. Goods were dispatched and delivered to the defendant's satisfaction. The plaintiff raised multiple invoices, with the total amounting to Rs. 15,38,742/-. The details of some of the invoices are as follows:
(a) Invoice No. 519 dated 27.02.2018 for Rs. 1,67,306/-
(b) Invoice No. 1648 dated 26.02.2018 for Rs. 3,75,546/-
(c) Invoice No. 1631 dated 04.03.2019 for Rs. 77,321/-
(d) Invoice No. 1661 dated 05.03.2019 for Rs. 93,749/-
(e) Invoice No. 1770 dated 07.03.2019 for Rs. 1,74,140/-
5. It is further averred that the plaintiff, following standard business practice, usually supplied goods only upon receiving advance payment. However, the defendant assured the plaintiff that payments would be made promptly after the delivery of the goods. Based on these assurances, the plaintiff supplied goods without receiving advance payments.
6. As per the averments of the plaintiff, despite the goods being delivered to the defendant's satisfaction, the defendant failed to make the full payments as per the invoices. The plaintiff repeatedly approached the defendant through personal visits and CS (COMM) 216/2020 M/s Multicom Exports Vs. Decor Arts Interior Solutions Pvt Ltd Page 3 of 33 CS (COMM) 475/2023 M/s Decoarts Interior Solutions Pvt. Ltd. Vs. M/s Multicom Exports telephonic conversations, requesting payment of the outstanding amount. However, these efforts proved futile.
7. It is submitted that on 31.03.2019, the plaintiff sent a formal reminder to the defendant, demanding the due payments along with interest at 12% per annum. In response, the defendant made a partial payment of Rs.1,00,000/- on 05.07.2019. Despite this payment, a balance of Rs.14,38,742/- remained outstanding.
8. On 28.09.2019, the plaintiff issued a legal notice to the defendant, demanding the payment of the outstanding amount. It is submitted that the notice was duly served, but the defendant neither replied to the notice nor made any further payments.
9. The plaintiff, considering the matter as a commercial dispute, filed an application for pre-institution mediation under Section 12A of the Commercial Courts Act, 2015, before the South East District Legal Services Authority in Saket Courts, New Delhi. However, the mediation failed, and a non-starter report was issued on 04.03.2020.
10. As of the date of filing the suit, an amount of Rs. 14,38,742/- remains due and payable by the defendant to the plaintiff. Additionally, the plaintiff claims interest at the rate of 12% per annum, amounting to Rs. 71,937/-, bringing the total claim to Rs. 15,10,679/-.
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11. The plaintiff asserts that this court has jurisdiction to entertain the present suit since the goods were ordered and supplied from the plaintiff's office in Okhla Industrial Area, New Delhi, and part of the cause of action arose within the territorial jurisdiction of this court.
12. The plaintiff prays for a decree in the sum of Rs. 15,10,679/- along with pendent lite and future interest at the rate of 18% per annum, as well as the costs of the suit.
Case of the defendant;
13. Defendant has contested the suit by filing Written Statement and submitted that the defendant approached the plaintiff in April 2017 for purchasing frames for interior decorations in commercial buildings, including hotels and restaurants. The defendant asserts that the plaintiff has not come before the court with clean hands, having filed false invoices, claimed double billing for the same products, and overcharged without prior approval. The defendant contends that the suit lacks merit and should be dismissed.
14. It is submitted that the plaintiff allegedly did not finalize a rate list for the articles, promising the defendant the best possible rates. However, the plaintiff later raised invoices for higher amounts. Additionally, the defendant claims that the frames approved through samples differed significantly from those actually supplied, which were of inferior quality. The frames CS (COMM) 216/2020 M/s Multicom Exports Vs. Decor Arts Interior Solutions Pvt Ltd Page 5 of 33 CS (COMM) 475/2023 M/s Decoarts Interior Solutions Pvt. Ltd. Vs. M/s Multicom Exports were reported to be bent and the color faded over time, rendering them unusable.
15. The defendant argued that the frames supplied were of substandard quality, including golden-colored frames that faded and bent after a short period. Moreover, the pasting of the artwork was improperly done. The defendant incurred significant expenses in rectifying these defects, which caused damage to its business reputation.
16. The defendant purchased frames for four projects: (i) Le Meridien, Goa (January 2017 to September 2017), (ii) Golden Tulip, Jaipur (July 2017 to September 2017), (iii) M3M Golf Estate, Gurgaon (August 2017 to February 2018), and (iv) Radisson Hotel, Jodhpur (November 2017 to February 2018). Despite these projects being completed in 2017 and 2018, the plaintiff raised invoices only in 2019, which the defendant asserts were for items not purchased by them.
17. The defendant claims to have made multiple complaints to the plaintiff via WhatsApp and email regarding the defective frames but received no cooperation or rectification from the plaintiff. As a result, the defendant was forced to spend large sums on rectifying the defects in all four projects, further harming their goodwill.
18. The defendant denied any liability for the amount claimed by the plaintiff, asserting that false and duplicated bills were CS (COMM) 216/2020 M/s Multicom Exports Vs. Decor Arts Interior Solutions Pvt Ltd Page 6 of 33 CS (COMM) 475/2023 M/s Decoarts Interior Solutions Pvt. Ltd. Vs. M/s Multicom Exports filed. The defendant argued that no rates were discussed or approved prior to the framing of the work, and the plaintiff failed to justify the charges in the invoices. The defendant also disputed the existence of any outstanding liability, stating that all payments have been made as per the agreed terms.
19. According to the defendant, a settlement meeting was held between the defendant's representative, Mr. Sanjay Aggarwal, and the plaintiff, where the defendant paid Rs. 1,00,000 as full and final settlement. Despite this, the plaintiff later filed the present suit with malicious intent, which the defendant considers as harassment.
20. The defendant denied receiving the legal notice dated 28.09.2019 from the plaintiff and disputed the plaintiff's assertion that the notice was duly served. The defendant maintains that it has no outstanding liabilities and that the plaintiff has filed a false claim to counter the defendant's legitimate claims for damages.
21. The defendant contests the entirety of the plaintiff's claims, asserting that the suit is baseless and was filed to harass the defendant. The defendant seeks dismissal of the suit and reserves the right to pursue a counterclaim for the losses and damages suffered due to the plaintiff's actions. The defendant also requests the court to direct the plaintiff to produce all original invoices and ledger accounts to substantiate its claims.
CS (COMM) 216/2020 M/s Multicom Exports Vs. Decor Arts Interior Solutions Pvt Ltd Page 7 of 33CS (COMM) 475/2023 M/s Decoarts Interior Solutions Pvt. Ltd. Vs. M/s Multicom Exports Counter-claim of the defendant;
22. The counter-claim is being filed by the defendant, Decorarts Interior Solutions Private Limited, located at C-94, Second Floor, Okhla Industrial Area Phase-I, New Delhi-110020. In the counter-claim, it is submitted that in April 2017, the defendant approached the plaintiff to discuss the supply of frameworks for various projects. The defendant, being new to the business, emphasized the need for quality products and was assured by the plaintiff of their long-standing reputation and reliable service. Although the rates for the frameworks were not explicitly discussed, the defendant placed an order based on the plaintiff's assurances. Advance payments were made to the plaintiff as required, with the understanding that frameworks would be supplied upon receipt of the advance.
23. The defendant placed orders for frameworks for the following projects:
(i) Radisson Hotel, Jodhpur: November 2017 to February 2018.
(ii) Le Meridien Goa: January 2017 to September 2017.
(iii) Golden Tulip, Jaipur: July 2017 to September 2017.
(iii) M3M Golf Estate, Gurgaon: August 2017 to February 2018.
24. The defendant experienced significant issues with the quality of the frameworks supplied by the plaintiff, including poor materials, fading, and discrepancies between approved samples and actual products. Despite multiple requests, the CS (COMM) 216/2020 M/s Multicom Exports Vs. Decor Arts Interior Solutions Pvt Ltd Page 8 of 33 CS (COMM) 475/2023 M/s Decoarts Interior Solutions Pvt. Ltd. Vs. M/s Multicom Exports plaintiff did not address these issues, leading the defendant to undertake rectifications at their own cost.
25. The defendant incurred the following expenses due to defective frameworks:
(ii) Radisson Hotel, Jodhpur: Rs. 2,25,000 for rectification, Rs.
1,80,000/- for travel expenses, and a rate difference of Rs. 2,12,433/-.
(ii)Le Meridien Goa: Rs. 2,25,000/- for rectification, Rs. 1,28,431 for travel expenses, and a rate difference of Rs. 43,848/-.
(iii) Golden Tulip, Jaipur: Rs. 65,000/- for rectification, Rs. 25,000 for travel expenses, and a total excess billing of Rs. 2,09,666/-.
(iv) M3M Golf Estate, Gurgaon: Rs.1,24,000/- for rectification, Rs.25,000/- for travel expenses, and a rate difference of Rs. 1,29,244/-.
26. The plaintiff did not respond to the defendant's complaints, resulting in the defendant having to bear the rectification costs. This failure significantly impacted the defendant's business and reputation, leading to a loss of future orders and goodwill. The defendant seeks damages totaling Rs.21,50,000/- for the costs incurred due to defective frameworks, including rectification expenses, travel costs, rate differences, and loss of goodwill. This amount reflects the financial impact of the plaintiff's failure to deliver quality products.
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27. Ld. Counsel for defendant/claimant requests dismissal of the plaintiff's suit as it is deemed frivolous and pass a decree for Rs.21,50,000/- against the plaintiff for damages, rectification costs, rate differences, and loss of goodwill. It is further requested to award of pendent-lite and future interest at 12% per annum on the claimed amount until actual payment and an order for the cost of litigation in favor of the defendant.
Issues;
28. After completion of pleadings, issues came to be framed on 21.02.2023 as under:
1. Whether the suit of the plaintiff is not maintainable in its present form and as per law? OPD
2. Whether the suit is entitled for a decree for an amount of Rs. 14,38,742/- (Fourteen Lakh Thirty Eight Thousand Seven Hundred and Forty Two Only) in favour of the plaintiff and against the defendant? OPP
3. Whether the plaintiff is entitled for pre litigation cost of Rs.71,937/- (Rupees Seventy One Thousand Nine Hundred and Thirty Seven Only) against the defendant? OPP
4. Whether the plaintiff is entitled for any interest on the decretal amount pendente lite and in future, if yes, then at what rate? OPP
5. Whether the plaintiff is also entitled to cost of the suit? OPP
6. Relief.CS (COMM) 216/2020 M/s Multicom Exports Vs. Decor Arts Interior Solutions Pvt Ltd Page 10 of 33
CS (COMM) 475/2023 M/s Decoarts Interior Solutions Pvt. Ltd. Vs. M/s Multicom Exports Plaintiff's Evidence
29. PW-1 Sh. Rajender Dhawan has tendered his evidence by way of affidavit Ex. PW1/A. He also relied upon the following documents:
1. GST registration certificate of the plaintiff Firm is Ex. PW1/1 (Colly.) (running into 3 pages)
2. Invoice/ receipt of dispatch bearing no. 519 for an amount of Rs. 1,67,306 dated 27.02.2018 is Ex. PW1/2.
3. Invoice/ receipt of dispatch bearing no. 517 for an amount of Rs. 3,75,546/- dated 26.02.2018 is Ex. PW1/3.
4. Invoice no. 1648 for an amount of Rs. 77,521 dated 04.03.2019 is Ex. PW1/4 (Colly.) (running into 2 pages).
5. Invoice no. 1651 for an amount of Rs. 93,749.98 dated 05.03.2019 is Ex. PW1/5 (Colly.) (running into 3 pages).
6. Invoice no. 1661 for an amount of Rs. 84,140/-
dated 07.03.2019 is Ex. PW1/6 (Colly.) (running into 3 pages).
7. Invoice no. 1770 for an amount of Rs. 88,707/- dated 06.04.2019 is Ex. PW1/7 (Colly.) (running into 3 pages).
8. Invoice no. 1840 for an amount of Rs. 97,225/- dated 01.05.2019 is Ex. PW1/8 (Colly.) (running into 3 pages).
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9. Invoice no. 1781 for an amount of Rs. 93,652/- dated 10.04.2019 is Ex. PW1/9 (Colly.) (running into 2 pages).
10. Invoice no. 1799 for an amount of Rs. 32,284 dated 17.04.2019 is Ex. PW1/10 (Colly.) (running into 2 pages).
11. Invoice no. 1825 for an amount of Rs. 99,036/- dated 24.04.2019 is Ex. PW1/11 (Colly.) (running into 2 pages).
12. Invoice no. 1869 for an amount of Rs. 98,258/- dated 07.05.2019 is Ex. PW1/12 (Colly.) (running into 3 pages).
13. Invoice no. 1873 for an amount of Rs. 95,339.60/- dated 08.05.2019 is Ex. PW1/13 (Colly.) (running into 2 pages).
14. Invoice no. 1875 for an amount of Rs. 64,920/- dated 08.05.2019 is Ex. PW1/14 (Colly.) (running into 2 pages).
15. Ledger account from 01.04.2017 to 20.07.2019 is de-exhibited as Ex. PW1/15 and marked as Mark-A (Colly.) (running into two pages).
16. Letter dated 31.05.2019 sent to the defendant company by the plaintiff firm is de-exhibited as Ex. PW1/16 and marked as Mark-B (Colly) (running into two pages).
17. Postal receipts are Ex. PW1/17.
18. Legal notice alongwith postal receipts and tracking report are Ex. PW1/18 (colly.) (running into 4 CS (COMM) 216/2020 M/s Multicom Exports Vs. Decor Arts Interior Solutions Pvt Ltd Page 12 of 33 CS (COMM) 475/2023 M/s Decoarts Interior Solutions Pvt. Ltd. Vs. M/s Multicom Exports pages), Ex. PW1/19 and Ex. PW1/20 (Colly.) (running into 6 pages) respectively.
19. Non-starter report dated 04.03.2020 is Ex. PW1/21.
20. Certificate u/s 65-B of the Indian Evidence Act is Ex. PW1/22.
30. PW-1 was cross-examined at length by Ld. Counsel for defendant. During cross-examination by Ld. Counsel for defendant, PW-1 has deposed that he was the individual owner of the said firm. He admitted that Ex. PW1/2 to Ex. PW1/15 bears his signature. He further admitted that plaint contains my signature. Then following question was put to him:
Q: Your signature on the plaint and documents Ex. PW1/2 to Ex. PW1/15 are not matching. Why? Ans: I have signed the invoices and ledgers with my initials and I affixed my full signature on the plaint.
31. He further deposed that he had not filed any other document on record with his initial signatures other than the invoices and the ledger. He had not filed purchase order along with his invoices. He has volunteered that he has not received any purchase order from them (defendant). He had not filed any document regarding the receipt of the supply of the order against the invoices he raised in the present plaint. He deposed that he does not remember the exact date when the goods were supplied against the invoices however, the same were supplied as and when these were ready for dispatch. He has not taken any CS (COMM) 216/2020 M/s Multicom Exports Vs. Decor Arts Interior Solutions Pvt Ltd Page 13 of 33 CS (COMM) 475/2023 M/s Decoarts Interior Solutions Pvt. Ltd. Vs. M/s Multicom Exports receiving against the goods supplied. He has volunteered that receiving could not be taken as the goods used to be picked up by the defendant during odd hours of night. He deposed that he has also not taken any receiving for the goods supplied in the normal working hours. He did not remember the exact date of last payment done by the defendant, however, the amount was Rs. 1,00,000/-. He has admitted that the payment of Rs. 1,00,000/- was received from defendant on 05.07.2019. He has admitteed that as on 27.02.2018 the pending amount as per ledger record was Rs.12,63,909.62/- as per entry mark as X to X on Ex. PW1/15. He had not received any original invoices from the defendant for the period from April 2017 to 26 th February 2018. Ex. PW1/2 and Ex. PW1/3 are the duplicate copies of the invoices. He does not have any purchase order regarding the invoices Ex. PW1/2 and Ex. PW1/3.
32. He has informed the defendant about the rates of each item on whatsapp. He has not placed on record the copy of such whatsapp conversation. He has not charged double amount for the invoices dated 31.07.2017, 25.08.2017 and 19.09.2017. He has volunteered that double amount has been shown because the material has been gone twice. He has admitted that after 26.02.2018 there is no invoices raised as per ledger account till 21.01.2019. Thereafter, plaintiff's evidence was closed.
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33. Thereafter, matter was fixed for defendant's evidence. Defendant has as DW-1 Ms. Pratiksha. DW-1 has tendered his evidence by way of affidavit Ex. DW1/A. During cross- examination by Ld. Counsel for plaintiff, DW-1 has deposed that they do art works and manufacturing of all décor items including art works as a part of interior designer. The company started on 04.06.2015. She deposed that she was the owner of the company and she started the defendant company. She came to know about the plaintiff through a vendor who suggested her to get the framing work done from him. She has deposed that in the year 2017-19 the address of defendant was C-94, 2 nd Floor, Okhla Industrial Area, Phase-I, New Delhi-20. The other address of defendant was a virtual office located at Level-IV, Regus Center, Rectangle-I, Saket, New Delhi. She has admitted that a legal notice from the plaintiff's office was received by her and she did not respond to that notice in writing rather she visited the office of plaintiff alongwith her father to discuss about the same and then the notice was nullified by the plaintiff. She had not filed any document in regard that the legal notice was nullified by the plaintiff. She has volunteered that it was discussed in meeting face to face with the plaintiff where he nullified the legal notice. She deposed that she had received the letter dated 31.05.2019 issued by the plaintiff. She did not respond, however, as suggested above a conversation happened in the meeting. She has admitted that after this meeting she made a part payment of Rs. 1 lac to the plaintiff. She has admitted that she promised to make the CS (COMM) 216/2020 M/s Multicom Exports Vs. Decor Arts Interior Solutions Pvt Ltd Page 15 of 33 CS (COMM) 475/2023 M/s Decoarts Interior Solutions Pvt. Ltd. Vs. M/s Multicom Exports remaining payment after sometime. She has volunteered that she had not checked the details of the bills and ledger provided by the plaintiff. Then the following questions were put to her:
Q: If you had not checked the bills and ledgers, what was the purpose of the aforesaid meeting? A: The purpose of the meeting was to also notify him about the mistakes done in the bills which were to be corrected and re-issued with the corrected amount. Q: Were any minutes of meeting were prepared for this meeting?
A: No.
34. She has denied the suggestion that the purpose of the meeting was to also notify him about the mistakes done in the bills which were to be corrected and re-issued with the corrected amount. Certain bills were supplied to her as per ledger and certain bills were not. The bills from 01.04.2019 till the end of the ledger were never supplied and there is no work done for these bills. Witness has disputed the amount pertaining to invoice Ex.PW1/16. She had filed the corrections of all bills which were received alongwith mistakes like double billing and over charging(Mark DW1/X (colly)) (running into 15 pages). She has admitted that at the time of delivery of the goods, the complaint was not raised. She deposed that she was not provided any guarantee/warranty from the plaintiff pertaining to the goods in question. Bills were not sent by the plaintiff on Whatsapp. She had admitted that reminders were sent by the plaintiff regarding payments on Whatsapp.CS (COMM) 216/2020 M/s Multicom Exports Vs. Decor Arts Interior Solutions Pvt Ltd Page 16 of 33
CS (COMM) 475/2023 M/s Decoarts Interior Solutions Pvt. Ltd. Vs. M/s Multicom Exports
35. DW-1 has admitted all the chats placed on record by the plaintiff (Ex.DW1/D1 (colly)) (running into 10 pages). The payment used to be invoices based, however, from April 2018, lumpsum payment was made. The defendant was maintaining a ledger account with regard to said transaction. She deposed that she had not filed the ledger. The correction statement was made based on the company's ledger (Mark DW1/X1). This document has been shared with the plaintiff by hand in a meeting. However, no acknowledgment to the same was with her. She has admitted that some payment has been withheld by her clients. Thereafter, defendant's evidence was closed.
Final Arguments
36. The matter was listed for final arguments. Ld. Counsel for the plaintiff as well as Ld. Counsel for defendant made their respective submissions.
Arguments on Behalf of the Plaintiff:
37. It is submitted by Ld. Counsel for the plaintiff that the suit is fully maintainable in its present form. The plaintiff firm, M/s Sameer Traders, is a GST-registered entity engaged in the business of supplying materials to the defendant. The suit has been filed within the limitation period, and the plaintiff has complied with all procedural requirements. The plaintiff's invoices and records clearly establish a continuous and ongoing business CS (COMM) 216/2020 M/s Multicom Exports Vs. Decor Arts Interior Solutions Pvt Ltd Page 17 of 33 CS (COMM) 475/2023 M/s Decoarts Interior Solutions Pvt. Ltd. Vs. M/s Multicom Exports relationship with the defendant. Hence, the defendant's objections regarding the maintainability of the suit are devoid of merit.
38. It is further submitted that the plaintiff is entitled to a decree for the amount of Rs.15,10,679/-, which remains outstanding against the defendant. The plaintiff has placed on record multiple invoices, ranging from February 2018 to May 2019, totaling the claimed amount. These invoices are duly supported by ledger accounts and other documentary evidence such as postal receipts, legal notices, and a non-starter report. It is submitted that the defendant has admitted receiving goods and making part payments, which corroborates the plaintiff's claims. Moreover, the defendant has failed to provide any substantial documentary evidence to counter the plaintiff's claims or prove that the amount is not due.
39. Ld. Counsel for the plaintiff emphasizes that the defendant's witness, DW-1, during cross-examination, admitted that the defendant received the plaintiff's legal notice and had discussions regarding the outstanding payment. The defendant even made a part payment of Rs.1,00,000/- after the legal notice. This conduct by the defendant unequivocally indicates an acknowledgment of liability towards the plaintiff. Furthermore, the defendant's contention that certain bills were incorrect or overcharged is a mere afterthought and has not been substantiated by any documentary evidence. The corrections claimed by the defendant were not communicated in writing or supported by any proof of mistakes in the invoices.
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40. The plaintiff is entitled to pre-litigation costs amounting to Rs.71,937/-. It is submitted that the plaintiff made several attempts to amicably resolve the matter, including sending a legal notice and conducting meetings with the defendant. However, the defendant's failure to settle the dues forced the plaintiff to initiate the present litigation. The expenses incurred by the plaintiff in attempting to recover the outstanding amount, including legal fees, postal charges, and other related costs, are legitimate and should be reimbursed by the defendant.
41. It is submitted that the plaintiff is entitled to interest on the decretal amount at a reasonable rate, both pendente lite and future, until realization of the amount. The plaintiff had made several demands for payment, yet the defendant failed to honor its obligations. Therefore, to compensate for the delay in payment, interest should be awarded at a fair and just rate. Additionally, the plaintiff seeks the cost of the suit, as the defendant's conduct has caused unnecessary hardship and expenses to the plaintiff in pursuing this litigation.
42. In light of the above submissions, it is submitted that the plaintiff has successfully proved its case through documentary evidence and witness testimony. The defendant's admissions during cross-examination further strengthen the plaintiff's claim. The plaintiff, therefore, prays for a decree in its favor for the amount of Rs.15,10,679/-, along with interest, pre-litigation costs, and the costs of the suit.
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43. It is submitted by Ld. Counsel for the defendant that the suit filed by the plaintiff is not maintainable in its present form. The plaintiff has failed to provide essential documents such as purchase orders, delivery receipts, and acknowledgments for the goods allegedly supplied to the defendant. The absence of these crucial documents raises doubts about the legitimacy of the plaintiff's claim. Furthermore, the suit is based on incomplete and unverified records, making it unsustainable in law. Ld. Counsel for defendant submits that the plaintiff has not established a valid cause of action for filing this suit.
44. Ld. Counsel for the defendant argued that the plaintiff is not entitled to the claimed amount. The defendant disputes the authenticity of several invoices produced by the plaintiff, especially those marked as Ex. PW1/2 to Ex. PW1/15. During cross-examination, the plaintiff's witness admitted that the signatures on the plaint and the invoices do not match, indicating that the invoices may not have been properly authorized. Moreover, the plaintiff admitted that it did not receive any purchase orders or take any receiving for the goods allegedly supplied. The defendant submits that this failure to obtain delivery receipts or acknowledgments casts serious doubts on the actual delivery of goods, making the plaintiff's claim highly questionable.
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45. Ld. Counsel for defendant submits that there has been no admission of liability on its part. While the defendant acknowledges that a part payment of Rs.1,00,000/- was made, this was done under protest, following a discussion regarding discrepancies in the bills. The defendant had raised issues about double billing and overcharging, which were never addressed by the plaintiff. Ld. Counsel for defendant further submits that the plaintiff failed to provide corrected invoices despite requests. The meeting held between the parties did not result in any acknowledgment of liability by the defendant, as alleged by the plaintiff. Therefore, the part payment made should not be construed as an admission of liability for the entire claimed amount.
46. It is submitted that the defendant has consistently maintained that several of the plaintiff's invoices were erroneous. The defendant provided a detailed statement pointing out discrepancies such as double billing, overcharging, and incorrect entries. However, the plaintiff failed to rectify these mistakes or issue corrected invoices. The defendant submits that the bills for the period after April 2019 were never supplied, and no work was done for the amounts claimed in those invoices. The plaintiff has also admitted during cross-examination that no invoices were raised between February 2018 and January 2019, further indicating irregularities in the plaintiff's records.
47. The defendant submits that the plaintiff is not entitled to any pre-litigation costs. The defendant made genuine efforts to CS (COMM) 216/2020 M/s Multicom Exports Vs. Decor Arts Interior Solutions Pvt Ltd Page 21 of 33 CS (COMM) 475/2023 M/s Decoarts Interior Solutions Pvt. Ltd. Vs. M/s Multicom Exports resolve the matter amicably by meeting with the plaintiff and discussing the discrepancies in the bills. The plaintiff's refusal to address these concerns and its insistence on recovering the full disputed amount led to the present litigation. The defendant should not be burdened with pre-litigation costs, as the plaintiff's own actions contributed to the escalation of the dispute.
48. In conclusion, the defendant submits that the plaintiff has failed to prove its case through credible evidence. The plaintiff's reliance on disputed invoices, incomplete records, and unverified documents makes its claim untenable. The defendant has consistently pointed out discrepancies and overcharging in the plaintiff's invoices, which the plaintiff has not addressed. Therefore, the defendant prays that the suit of the plaintiff be dismissed with costs, and counter-claim of the defendant be granted in favour of the defendant.
49. Both parties presented compelling arguments and countered each other's claims effectively. I now propose to deal with the issues in the background of the record.
Issue-wise findings
50. In the present matter, both the suit filed by the plaintiff and the counter-claim raised by the defendant are intricately linked to the same transaction and series of events, making it essential that both are adjudicated simultaneously. The issues raised in the suit revolve around the plaintiff's claim for recovery of an outstanding CS (COMM) 216/2020 M/s Multicom Exports Vs. Decor Arts Interior Solutions Pvt Ltd Page 22 of 33 CS (COMM) 475/2023 M/s Decoarts Interior Solutions Pvt. Ltd. Vs. M/s Multicom Exports amount based on a series of invoices, while the counter-claim by the defendant questions the legitimacy of these invoices, alleging discrepancies such as overcharging, double billing, and non- delivery of goods. These counter-allegations directly challenge the foundation of the plaintiff's claim. Therefore, in the interest of judicial economy and to avoid contradictory findings, it is imperative that the suit and the counter-claim are decided together. Doing so will ensure a comprehensive evaluation of the evidence and arguments presented by both parties, leading to a fair and conclusive determination of their rights and obligations.
51. Moreover, both parties have based their respective claims on overlapping factual matrices, including the same set of invoices and payment disputes. As these matters are interconnected, a piecemeal adjudication could result in inconsistent judgments and unnecessary delays. Resolving the suit and counter-claim together ensures that all issues are addressed holistically, promoting justice and reducing the potential for further litigation.
Issue No. 1: Whether the suit of the plaintiff is not maintainable in its present form and as per law? (OPD)
52. Ld. Counsel for defendant raised objections to the maintainability of the suit, contending that the plaintiff had not produced key documents such as purchase orders, delivery receipts, or acknowledgments for the goods supplied. However, the plaintiff has sufficiently demonstrated that the suit is maintainable through the production of relevant invoices (Ex.
CS (COMM) 216/2020 M/s Multicom Exports Vs. Decor Arts Interior Solutions Pvt Ltd Page 23 of 33CS (COMM) 475/2023 M/s Decoarts Interior Solutions Pvt. Ltd. Vs. M/s Multicom Exports PW1/2 to Ex. PW1/14), the ledger account (Mark-A), and the legal notices sent to the defendant (Ex. PW1/18). The plaintiff's witness, PW-1, was cross-examined extensively, but there was no evidence to suggest that the suit lacked a valid cause of action. The invoices issued and the subsequent communications between the parties indicate that there was a business relationship, and the plaintiff had a legitimate grievance regarding unpaid dues.
53. Furthermore, the plaintiff's invoices, which were signed and acknowledged by the plaintiff, serve as sufficient prima-facie evidence of the transactions. The absence of purchase orders or delivery receipts does not negate the fact that the plaintiff has raised a genuine dispute based on the invoices and subsequent non-payment. It is also significant that the defendant made a part payment of Rs.1,00,000/- to the plaintiff after receiving the legal notice. This payment indicates that the defendant acknowledged the existence of some outstanding dues. The defendant's argument that this payment was made under protest does not weaken the plaintiff's case, as no substantial evidence was presented by the defendant to prove that the payment was conditional or disputed at the time. This further strengthens the maintainability of the suit, as it shows that there was an ongoing transaction between the parties that remained unsettled.
54. The defendant also claimed that the legal notice was nullified during a meeting between the parties. However, no documentary evidence or minutes of the meeting were produced to support this claim. In the absence of such evidence, the court CS (COMM) 216/2020 M/s Multicom Exports Vs. Decor Arts Interior Solutions Pvt Ltd Page 24 of 33 CS (COMM) 475/2023 M/s Decoarts Interior Solutions Pvt. Ltd. Vs. M/s Multicom Exports cannot accept the defendant's assertion. The legal notice issued by the plaintiff remains valid and forms part of the basis for the present suit.
55. Under the provisions of the Commercial Courts Act, 2015, and the Code of Civil Procedure, 1908, a suit is maintainable as long as there is a cause of action and sufficient grounds to file a claim. The plaintiff has shown that it has a valid claim arising out of unpaid invoices, and the suit has been filed in accordance with the procedural requirements. The objections raised by the defendant do not pertain to the fundamental elements of maintainability, but rather to the evidentiary aspects, which will be addressed while deciding the merits of the case. For the reasons stated above, the court finds that the suit is maintainable in its present form. Accordingly, Issue No. 1 is decided in favor of the plaintiff and against the defendant.
Issue No. 2: Whether the suit is entitled for a decree for an amount of Rs.14,38,742/- (Fourteen Lakh Thirty Eight Thousand Seven Hundred and Forty Two Only) in favour of the plaintiff and against the defendant? OPP
56. The plaintiff, M/s Multicom Exports, claims Rs.14,38,742/- from the defendant, Decorarts Interior Solutions Private Limited, for goods supplied between February 2018 and May 2019. The plaintiff has produced documentary evidence, including a series of invoices (Ex. PW1/3 to Ex. PW1/14) and ledger accounts to substantiate its claim. These documents detail the transactions, the CS (COMM) 216/2020 M/s Multicom Exports Vs. Decor Arts Interior Solutions Pvt Ltd Page 25 of 33 CS (COMM) 475/2023 M/s Decoarts Interior Solutions Pvt. Ltd. Vs. M/s Multicom Exports specific goods supplied, and the corresponding payments due from the defendant.
57. The testimony of PW-1, the authorized representative of the plaintiff, further strengthens the plaintiff's case. PW-1 testified that plaintiff had a consistent business relationship with the defendant, wherein various interior decoration materials were supplied for ongoing projects. The invoices raised were regularly communicated to the defendant, and several meetings and discussions were held regarding the outstanding dues. Despite repeated follow-ups, the defendant failed to make the payments, leaving a balance of Rs.14,38,742/-.
58. The plaintiff also placed on record the legal notice sent to the defendant (Ex. PW1/18) demanding payment, along with postal receipts (Ex. PW1/19). The non-response to this legal notice further indicates the defendant's failure to address the outstanding dues in a timely manner. The plaintiff's evidence remains consistent and unshaken during cross-examination, demonstrating a clear entitlement to the claimed amount.
59. The defendant, M/s Decorarts Interior Solutions Private Limited, raised a counter-claim, disputing the plaintiff's claim on the grounds that several of the invoices were erroneous, particularly alleging double billing and overcharging. The defendant argued that it had raised objections regarding these discrepancies and that a part payment of Rs.1,00,000/- was made CS (COMM) 216/2020 M/s Multicom Exports Vs. Decor Arts Interior Solutions Pvt Ltd Page 26 of 33 CS (COMM) 475/2023 M/s Decoarts Interior Solutions Pvt. Ltd. Vs. M/s Multicom Exports under protest, indicating that the full amount claimed by the plaintiff was not admitted.
60. However, upon close scrutiny of the evidence, it becomes apparent that the defendant's allegations are not supported by any credible documentary evidence. Despite claiming discrepancies, the defendant failed to produce any corrected invoices, debit notes, or written communications to substantiate its objections. The defendant also did not place on record any contemporaneous documents indicating that these alleged discrepancies were communicated to the plaintiff during the course of the business relationship.
61. The testimony of DW-1, the defendant's witness, lacks substance in this regard. During cross-examination, DW-1 admitted that no formal written objections were raised against the plaintiff's invoices at the relevant time. This undermines the credibility of the defendant's counter-claim and suggests that the objections raised in this litigation may be an afterthought, introduced to avoid liability.
62. Further, the defendant's acknowledgment of part payment of Rs.1,00,000/- to the plaintiff after discussions about the outstanding dues supports the plaintiff's assertion that the goods were supplied and that the defendant accepted delivery of the same. The defendant's contention that this payment was made under protest is not corroborated by any evidence of formal communication to the plaintiff indicating that the payment was CS (COMM) 216/2020 M/s Multicom Exports Vs. Decor Arts Interior Solutions Pvt Ltd Page 27 of 33 CS (COMM) 475/2023 M/s Decoarts Interior Solutions Pvt. Ltd. Vs. M/s Multicom Exports disputed or made conditionally. In the absence of such evidence, the defendant's argument holds little weight.
63. In commercial transactions, invoices and regularly maintained accounts by the plaintiff carry significant evidentiary value. Hon'ble Supreme Court as well as Hon'ble Delhi High Court has emphasized in catena of cases that where the defendant fails to produce rebuttal evidence, entries in the plaintiff's books of account and the corresponding invoices should be taken as prima-facie proof of the transactions. Applying this principle to the present case, the invoices produced by Multicom Exports, which have not been effectively challenged by the defendant, establish the validity of the plaintiff's claim.
64. Further, the defendant's failure to provide supporting documents for its counter-claim. A counter-claim must be supported by credible evidence, failing which the counter-claim should be dismissed, and the plaintiff's case should succeed based on its own merits. In the present case, the defendant's counter- claim, devoid of any documentary support, cannot stand against the consistent and corroborated evidence presented by the plaintiff.
65. Moreover, in Shri Partap Singh (Dead) Through LRs and Ors. Vs. Shiv Ram (Dead) Through LRs Civil Appeal No. 1511 of 2020, Hon'ble Supreme Court reiterated that mere oral statements without documentary proof do not constitute sufficient rebuttal in civil proceedings, especially in commercial disputes where CS (COMM) 216/2020 M/s Multicom Exports Vs. Decor Arts Interior Solutions Pvt Ltd Page 28 of 33 CS (COMM) 475/2023 M/s Decoarts Interior Solutions Pvt. Ltd. Vs. M/s Multicom Exports records and documentation play a crucial role. In the present case, the defendant's oral assertions regarding alleged discrepancies in the invoices are not backed by any written records, further weakening the defense.
66. Given the above reasoning, the plaintiff, Multicom Exports, has successfully established its claim for Rs.14,38,742/- through consistent and credible documentary evidence, including invoices, ledger accounts, and delivery receipts. The defendant's counter- claim is unsupported by any documentary evidence and is therefore devoid of merit. The defendant's part payment of Rs. 1,00,000/- further supports the plaintiff's position that the goods were supplied and accepted by the defendant.
67. In light of the evidence, judicial precedents, and the overall circumstances, the plaintiff is entitled for decree in his favor for a sum of Rs.14,38,742/-. The counter-claim of the defendant, M/s Decorarts Interior Solutions Private Limited, stands dismissed.
Issue No. 3. Whether the plaintiff is entitled for pre litigation cost of Rs.71,937/- (Rupees Seventy One Thousand Nine Hundred and Thirty Seven Only) against the defendant? OPP
68. The plaintiff has claimed pre-litigation interest at the rate of 12% per annum on the outstanding principal amount of Rs. 14,38,742/-, amounting to Rs.71,937/-. Ld. Counsel for plaintiff argued that the defendant failed to make timely payments despite repeated reminders and notices, justifying the claim for interest.
CS (COMM) 216/2020 M/s Multicom Exports Vs. Decor Arts Interior Solutions Pvt Ltd Page 29 of 33CS (COMM) 475/2023 M/s Decoarts Interior Solutions Pvt. Ltd. Vs. M/s Multicom Exports The award of pre-litigation interest is discretionary and depends on the facts and circumstances of each case. Courts have often awarded interest in commercial disputes to compensate for the loss caused by the withholding of money that was rightfully due. However, the rate of interest must be reasonable and proportionate to the prevailing economic conditions and the conduct of the parties.
69. In the present case, the plaintiff has claimed interest at 12% per annum, which, though not exorbitant, appears to be on the higher side given the facts of the case and the nature of the transaction. The Hon'ble Supreme Court in the case of Central Bank of India v. Ravindra & Ors., (2002) 1 SCC 367 held that interest should be awarded in a manner that ensures fairness to both parties, taking into account the current market rates and the nature of the commercial transaction. Similarly, in Reliance Cellulose Products Ltd. v. Oil and Natural Gas Corporation Ltd., (2018) 9 SCC 266, the court emphasized that the interest awarded should not be penal but compensatory in nature.
70. The plaintiff supplied goods to the defendant based on assurances of timely payment, but the defendant defaulted in making full payment. Although the defendant made a partial payment of Rs.1,00,000/-, a significant amount remained outstanding. The plaintiff's efforts to recover the outstanding dues through reminders and a legal notice did not yield the desired result, necessitating the filing of the present suit.
CS (COMM) 216/2020 M/s Multicom Exports Vs. Decor Arts Interior Solutions Pvt Ltd Page 30 of 33CS (COMM) 475/2023 M/s Decoarts Interior Solutions Pvt. Ltd. Vs. M/s Multicom Exports
71. Given the defendant's default in payment and the resulting delay, the plaintiff is entitled to interest for the period during which the principal amount was withheld. However, considering the overall circumstances, including the commercial nature of the dispute and the absence of any agreement specifying a higher rate of interest, awarding interest at the rate of 6% per annum would serve the ends of justice. This rate balances the plaintiff's need for compensation for the delayed payment while ensuring that the interest is not punitive or excessive.
72. In light of the above reasoning, the plaintiff is entitled to pre-litigation interest at the rate of 6% per annum on the principal amount of Rs.14,38,742/-, instead of the claimed 12%. The pre- litigation interest at 6% per annum is calculated as Rs.35,968/-. Therefore, the plaintiff is awarded a sum of Rs.35,968/- as pre- litigation interest. This issue is decided in favor of the plaintiff to the extent indicated above.
Issue No. 4. Whether the plaintiff is entitled for any interest on the decretal amount pendente lite and in future, if yes, then at what rate? OPP
73. A well-established body of court rulings upholds the principle that where the parties have not agreed upon an interest rate, the court is empowered to determine a fair and reasonable rate based on prevailing market conditions. As regards the rate of interest claimed by the Plaintiff at the rate of 18 per cent per annum is concerned, I am of the considered opinion that as per the CS (COMM) 216/2020 M/s Multicom Exports Vs. Decor Arts Interior Solutions Pvt Ltd Page 31 of 33 CS (COMM) 475/2023 M/s Decoarts Interior Solutions Pvt. Ltd. Vs. M/s Multicom Exports Judgment of Hon'ble Supreme Court in Central Bank of India Vs. Ravindra (Supra), the grant of pendente-lite and future interest is a subject matter of the discretion of the Court and not to be governed by the agreement between the parties. Accordingly in exercise of the discretionary power of this Court, I have granted pendente-lite and future interest at the rate of 6% p.a. to the Plaintiff because Section 34 of CPC, 1908 as well as the provisions of the Interest Act, 1978, contemplate grant of interest at the rate of 6% per annum and because in the past decade, the nationalized banks have also granted interest at the rate of 5-6% per annum, on terms deposits.
Issue No. 5. Whether the plaintiff is also entitled to cost of the suit? OPP
74. Parties are left to bear their own costs.
Relief:
75. In light of the findings on the issues and the successful establishment of the plaintiff's claims, the suit is decreed in favor of the plaintiff, M/s Multicom Exports. The defendant, M/s Decor Arts Interior Solutions Private Limited, is directed to pay the plaintiff a sum of Rs.14,74,710/- (including pre-litigation interest). Future interest shall be awarded at the rate of 6% per annum from the date of filing of the suit i.e. 22.08.2020 until the actual realization of the decretal amount. Parties are left to bear their own cost. Suit of the plaintiff is decreed accordingly. The counter-
CS (COMM) 216/2020 M/s Multicom Exports Vs. Decor Arts Interior Solutions Pvt Ltd Page 32 of 33CS (COMM) 475/2023 M/s Decoarts Interior Solutions Pvt. Ltd. Vs. M/s Multicom Exports claim of the defendant, M/s Decorarts Interior Solutions Private Limited, stands dismissed in the light of evidence and record. Decree sheet be prepared accordingly. File be consigned to record room after due compliance. Digitally signed by NEELAM NEELAM SINGH Announced & dictated SINGH Date:
2024.08.27 in the open Court on 09:55:23 +0530 this 27th day of August, 2024 (NEELAM SINGH) District Judge (Commercial Court-02) South-East, Saket Courts, ND CS (COMM) 216/2020 M/s Multicom Exports Vs. Decor Arts Interior Solutions Pvt Ltd Page 33 of 33 CS (COMM) 475/2023 M/s Decoarts Interior Solutions Pvt. Ltd. Vs. M/s Multicom Exports