Delhi District Court
M/S Competent Polymers Private Limited vs M/S Shree Balaji Traders on 6 May, 2023
BEFORE THE COURT OF SH. SURINDER S. RATHI, DISTRICT JUDGE
(COMM.)-03 SHAHDARA, KARKARDOOMA, DELHI.
CS Comm. No.157/2022
M/s Competent Polymers Private Limited
Through its AR Alok Gupta
Having its registered office at:
11, Panchkuian Road, New Delhi-110001.
.......Plaintiff
Vs.
1. M/s Shree Balaji Traders
A Proprietorship concern of
Kuldip Rathi
2. Kuldip Rathi
Proprietor M/s Shree Balaji Traders
Both defendants having address
At: 8/91, Nehru Gali, Vishwas
Nagar, Shahdara, Delhi-110032.
........Defendants
Date of Institution : 02.03.2022
Date of Final Arguments : 06.05.2023
Date of Judgment : 06.05.2023
Decision : Decreed
Judgment
1. This suit is filed by plaintiff for recovery of Rs.35.90 lakhs along with
interest @ 18% per annum.
Case of the Plaintiff
2. Case of the plaintiff as per plaint and the evidence led is that it is a
duly incorporated company and is manufacturer and trader of
chemicals. Defendant is proprietor of M/s Shree Balaji Traders and
CS Comm. No.157/2022 Competent Polymers Pvt. Ltd. Vs. Shree Balaji Traders Page 1 of 20
has been purchasing chemicals from the plantiff for last more than a
decade. Goods were sold through invoices and a running account was
maintained wherein on account payments were being made which
were duly credited. As in Financial Year 2016-17, the opening debit
balance stood at Rs.59,96,829/-. In the Financial Year 2018-19, the
goods worth Rs.2,26,11,205/- were sold to the defendant and
defendant paid only Rs.1,49,55,000/- and the unpaid balance stood at
Rs.1,36,53,034/-. In the Financial Year 2018-19 goods worth
Rs.80,64,255/- were sold through 12 invoices and the debit balance
swelled to Rs.2,17,17,289/-. Defendant paid Rs.1,33,64,000/- leaving
a debit balance of Rs.83,53,289/-. During F.Y. 2019-20, defendant
made further payment of Rs.46,13,289/-. The debit balance reduced to
Rs.37.40 lakhs. The last payment made was of Rs.1.50 lakhs on
31.07.2020 leaving debit balance at Rs.35.90 lakhs. This debit balance
was not cleared despite repeated requests and plaintiff was constrained
to issue legal notice on 29.07.2021 which was neither replied nor
complied. Plaintiff was constrained to approach Shahdara DLSA for
Pre-Institution Mediation under Section 12A of Commercial Courts
Act, 2015 but no settlement was arrived at and Non-Starter Report was
issued on 06.12.2021. The suit in hand was filed with following
prayers:
Prayer:
i. Pass a decree for a sum of Rs.35,90,000/- in favour of the plaintiff
company and against the defendants together with pendente lite and
future interest @18% per annum from the date of filing of the suit till
payment/realization;
ii. Award the costs of the suit.
iii. Any other or further order which this Hon'ble Court may deem fit and
proper in the facts and circumstances of the case.
CS Comm. No.157/2022 Competent Polymers Pvt. Ltd. Vs. Shree Balaji Traders Page 2 of 20
3. Summons of the suit was served upon the defendant on 25.07.2022
and counsel for defendant appeared on 29.07.2022. WS was filed on
14.11.2022 i.e. after 105 days of service. The delay in filing of WS of
more than 2 months was condoned subject to payment of cost of
Rs.18,000/- to the plaintiff. However, the court is apprised that this
cost has not been paid by the defendant till date. In so far as defendant
and his counsel continued to promise to pay this cost, the trial
proceeded.
Defendant's Case
4. Case of the defendant as per WS is that plaintiff has no cause of action
and has approached the court with unclean hands. It is case of the
defendant that they had never purchased chemicals as claimed in the
suit but were rather appointed as a consignment agent vide an
agreement dated 01.01.2011 on commission basis. Defendants were
only supposed to receive the goods/chemicals from the plaintiff
company and distribute/sell the same to the plaintiff's customers all
over India. As per defendant this material facts was concealed by the
plaintiff from the Court while the plaint story was fabricated.
Defendant has specifically denied that he used to purchase chemicals
from the plaintiff on invoices and rather it is reiterated that he was
working as an agent for the plaintiff on commission basis.
5. As per defendant no invoices were raised as is done in a normal sale-
purchase transaction as the defendant was selling plaintiff's goods in
the market as plaintiff's consignee/agent. It is pleaded that plaintiff has
forged and fabricated all the statements of account. As per the written
contract between the parties, defendant was supposed to pay the
CS Comm. No.157/2022 Competent Polymers Pvt. Ltd. Vs. Shree Balaji Traders Page 3 of 20
plaintiff only on realization of the sales carried out by him as an agent.
Likewise, defendant has denied the sale figures specifically as
mentioned in para 4, 5 and 6 by stating that these were not sale
transactions and it cannot be said that defendant purchased these
goods from the plaintiff as he was rather a plaintiff's frontman who
was to sell the goods to third parties as an agent. Defendant has also
denied the financial statements cited by the plaintiff. With these pleas
defendant prayed for dismissal of the suit.
6. In his affidavit of admission and denial defendant has denied all the
invoices and statements of account filed by the plaintiff. The
defendant has however admitted the bilties qua the consignment of the
goods.
Replication
7. Separate replication was filed by the plaintiff company wherein it
reiterated its pleaded case. The plaintiff has not denied that
consignment agreement dated 01.01.2011 which was executed
between them and the fact that defendant served as their consignment
agent for sale of their products to third parties. However, it is claimed
that suit in hand pertains to other unrelated transactions which took
place between them where defendant became a purchaser of plaintiff's
goods qua which independent invoices were raised. It is pleaded that
these sales were not covered under the consignment agreement dated
01.01.2011 and that had they been covered, no invoices would have
been issued. Plaintiff has accepted that as per consignment agreement,
the defendant was supposed to deposit the sale proceeds with the
plaintiff within 30 days of their realization.
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8. It is also pleaded that as per the agreement in case the actual buyers do
not pay for the goods sold, it is the defendant/consignee who shall be
responsible for the bad debt. Plaintiff has reiterated that the suit in
hand has been filed by him only qua the invoices raised with respect to
direct sales to the defendant and not qua the goods supplied as a
consignee.
9. Upon completion of pleadings issues were identified by this Court on
27.10.2022.
Issues:
i. Whether the plaintiff is entitled to recover Rs.35,90,000/- with pendent
lite and future interest @18% per annum? OPP
ii. Relief
10.Evidence in this case was ordered to be recorded before Ld. LC as per
following protocol created by this Court under Order 18 Rule 4 CPC
read with Order 15A Rule 6(l) CPC as applicable to Commercial
suits. Evidence was recorded before Ld. LC Ms. Aastha Sharma
Advocate appointed by this Court for the sake of timely disposal of
this case. For ready reference the Protocol designed by this Court for
recording of Evidence through the LC is reproduced hereunder:
"Protocol for Recording of Evidence before Court Commissioner appointed by
District Judge, Commercial Court, 2022"
Part - 1
Preliminary
1. Short title- This Protocol is titled "Protocol for Recording of Evidence before Court
Commissioner appointed by District Judge Commercial Court 2022."
2. Statutory Provision- This protocol is prepared as per Order 18 Rule 4 CPC and Order 15A
Rule 6(l) CPC as applicable to Commercial Court.
CS Comm. No.157/2022 Competent Polymers Pvt. Ltd. Vs. Shree Balaji Traders Page 5 of 20
3. Court- Whenever the term 'Court' appears in this Protocol it should refer to Commercial
Court as defined under Section 2(b) of Commercial Court Act 2015.
Part - 2
Preparation for Assignment
4. Recording of evidence in Commercial Cases- Recording of evidence in Commercial Cases
may be carried out before the Court Commissioner.
Explanation: For reasons to be recorded, Court may retain the case for recording of evidence
before the Court.
5. Appointment of Court Commissioner- As per the Protocol, on the first Case Management
Hearing when the issues are identified, the Court may pass an order for appointment of Court
Commissioner.
6. Copy of order be shared with parties and Court Commissioner- Copy of the order of
framing of issues, appointment of Court Commissioner and the schedule of recording of evidence
shall be supplied to the parties as well as the Court Commissioner.
Part - 3
Recording of Evidence
7. Filing of list of witnesses- Both sides shall file list of witnesses preferably within one week
but not later than 15 days of identification of issues before the Court while sharing an advanced
copy thereof with the opposite party.
8. Order of assignment of Case to the Court Commissioner- While assigning the case,
following aspects shall be complied :
i. Schedule of evidence- Recording of evidence shall start within two weeks of
identification of issues. Evidence shall continue on day to day basis, till conclusion. Any
alteration in schedule for recording of evidence, if needed, shall be decided by the Court
Commissioner as per convenience of all concerned, as far as possible. However, entire
evidence shall be concluded within Eight weeks of initiation.
ii. Judicial File- Judicial file shall not be sent or summoned for the purpose of recording of
evidence by the Court Commissioner.
iii. Examination-in-Chief- An advance copy of examination in chief by way of affidavit
shall be supplied to opposite party preferably one week in advance. However, no
adjournment shall be granted in case of non-supply of advance copy.
iv. Production of documents for cross-examination- In case the opposite side is desirous
of production of any document by the witness or any other entity for the purpose of
cross-examination, an application requesting the same shall be moved well in advance
before the Court.
CS Comm. No.157/2022 Competent Polymers Pvt. Ltd. Vs. Shree Balaji Traders Page 6 of 20
Part - 4
Duty of Court Commissioner
9. Recording of evidence by the Court Commissioner-
i. Place and Time- Court Commissioner shall record evidence either in Lawyer's
chamber, or Judges/Bar Library, Court Room or any other public place within the
Court Complex as mutually agreed by all concerned. Evidence shall be recorded
between 10.00 AM to 5.00 PM. It can carry on beyond 5.00 PM as well in case both
parties agree. It can be recorded even on a holiday if all the stakeholders are
comfortable and agree to the same.
ii. Chronology of recording- Court Commissioner shall proceed to record the
examination by first recording the deposition of litigating party before examining
additional summoned witnesses.
iii. Oath to witnesses- Court Commissioner shall administer oath to the witnesses under
examination as a delegatee of the Court as per Oaths Act, 1969.
iv. Recording of evidence- The evidence shall be preferably typed on a computer but
can also be recorded by hand neatly.
v. Time frame- Court Commissioner shall conclude the recording of evidence, as early
as possible, but not later than eight weeks of assignment of a case. In case, for any
reason the parties are unable to adhere to the time schedule, extension can be sought
from the Court.
vi. Comfortable sitting space- Witnesses and their Counsel shall be provided
comfortable sitting space by the Court Commissioner.
vii. Exhibition of documents- Court Commissioner shall exhibit all the documents
sought to be proved by a party on record. In case of any objection to exhibition of the
documents by either side, the objection shall be recorded in some detail and left open
with an assurance that mere marking of such exhibits will not be treated as conclusive
proof thereof and that admissibility of such document shall be decided by the referral
Court at final stage.
viii. Original documents to be retained by parties- Court Commissioner shall make an
observation in the record of evidence of all original documents produced and shall
sign the exhibits with an endorsement OSR (original seen and returned) wherever
necessary. If a party has filed original documents alongwith pleadings in Court, the
same can be taken back as per rules for the purpose of recording of evidence before
the Court Commissioner.
ix. Language- Recording of evidence shall preferably be carried out in English or Court
language, as the case may be, unless requested by the parties otherwise.
x. Adjournments- Once started, the cross-examination shall preferably concluded on
the same day or continue on day-to-day basis. In case of any hardship viz. ill health
etc. the case can be deferred but preferably for a day or two but not later than a week.
In case an evidence schedule is fixed and adjournment is sought by the opposite side,
i.e the side other than who is leading evidence, without 24 hour advance notice.
Explanation: In case a witness scheduled to be examined or under examination is
reported to be unwell or unavailable, the party leading the evidence shall produce the
next witness in line in the list for recording of evidence.
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xi. Recording of objections- All the objections raised during cross-
examination/reexamination shall be recorded in the deposition under title objections
and shall be left open for the decision of the Court at the stage of final arguments.
Witness shall not refuse to answer the question asked.
xii. Questions to be allowed- In case Court Commissioner finds any question not related
to the fact and issue, he shall record his objection but shall allow the question to be
put and witness must answer.
xiii. No third person intervention- Court Commissioner shall ensure that the witness is
not assisted by his Counsel or any other person while under examination in answering
the questions.
xiv. Recording of demeanour of witness- Court Commissioner shall record the
demeanour of the witness wherever it is found pertinent and necessary for sharing
with the Court.
xv. Copy of evidence- All parties shall be provided uncertified electronic/hard copy of
the evidence recorded, free of cost by Court Commissioner.
xvi. Safe keeping of original deposition- Court Commissioner shall keep the original
depositions in his safe custody till such time they are filed in the Court in original
upon completion of each witness individually.
xvii. Miscellaneous proceedings- Court Commissioner shall maintain a miscellaneous
proceeding sheet for each day of work and shall submit it in the Court at the time of
submission of final report.
xviii. Hostile Witness- In case a witness is sought to be declared hostile, then Court
Commissioner shall refer both the parties to Court at the earliest and the Court shall
decide the issue within three days.
Part - 5
Miscellaneous
10. Summoning of Witness-
i. Summons from Court- In case a litigating party is desirous of summoning a person
for deposition or production of documents, it shall obtain summons from the Court
with an endorsement that such person shall appear before the address of Court
Commissioner on scheduled date, time and place.
ii. Diet Money- Diet money shall be paid to such witness by the party desirous of
summoning as per rules.
11. Advisory to Court Commissioner- While recording the evidence on commission, the Court
Commissioner shall ensure the following:
i. Impartial- Court Commissioner shall conduct himself in an impartial way and
behave in an indiscriminate manner while recording of evidence.
ii. Polite- Court Commissioner shall be polite with the witness and other stakeholders
while recording of evidence.
iii. Confidentiality- Court Commissioner shall maintain confidentiality during the
whole process.
iv. Keeping professional distance- Court Commissioner shall not solicit professional
work from the parties.
v. Integrity- Court Commissioner shall not accept remuneration or any favour in cash
or kind from the parties over and above the honorarium fixed by the Court.
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vi. Non-judgmental- Court Commissioner shall not criticize the professional conduct
of lawyers and litigating parties on their understanding of law.
vii. Punctuality- Court Commissioner shall adhere to time schedules and shall not make
excuses like being engaged in some personal or Court work etc.
viii. Coordination- In case of any unforeseen circumstances warranting change of dates
of hearing, for his own case or the request of other side, he shall apprise the other
side in advance via phone call, email, SMS, Whatsapp Group etc..
ix. No third party sharing- Court Commissioner shall not allow the deposition to be
inspected by any third party and shall not share a copy thereof with any stranger
without permission of the Court.
x. Inspection- Court Commissioner shall allow any party to inspect the recorded
proceedings only in his presence.
xi. Recusal- In case either of the parties or Counsel for the parties are related or closely
known to Court Commissioner, he/she shall recuse self from the case and inform the
referral Court.
12. Remuneration of Court Commissioner -
i. Remuneration- In terms of Order 18 Rule 4 of the Code read with Order 15 Rule
2(l) and Rule 2(o) of the Code, Court Commissioner shall be paid remuneration for
the work carried out.
ii. Mode of payment- Such remuneration shall be paid by the party directly for the
work carried out by way of cash, UPI, Bank Transfer, cheque or draft against due
receipt.
iii. Cost to parties- Each party shall individually bear the cost incurred in leading its
evidence.
iv. Fee to be paid- Remuneration fee for recording of evidence is fixed at Rs.2,000/-
per witness or Rs.2,000/- per hour whichever is more. Court Commissioner shall
record the Evidence himself and in case the Stenographer services are taken it can
either be arranged by a litigating party on its own cost or in case the same is
arranged by Court Commissioner, then the actual cost of typing shall be reimbursed
by the party to the Court Commissioner.
v. Litigation Cost- Expenditure incurred in recording of evidence shall be redeemable
as cost of litigation at the end of the suit.
13. Judicial Intervention during recording of evidence-
i. Parties to cooperate- It is expected that both the sides will cooperate with Court
Commissioner as well as with each other in recording of evidence and carry out
proceedings in a cordial manner.
ii. Dissolution of hindrances- In case of any conflict resulting into hindrance
recording of evidence, it shall be resolved amicably by the parties at their own level
with the active help of the Court Commissioner.
iii. Court intervention- However, in case of any unforeseen situation requiring
judicial intervention, Court Commissioner shall fix date and time for joint
appearance of both sides before the Court for removal of any such impediment.
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14. Miscellaneous Applications-
i. Moving the application- In case either of the parties is desirous of moving any
miscellaneous application viz. amending of pleadings, interim injunction etc. it
shall share an advance copy with the opposite side and reply thereof, if any, shall
be filed and shared within seven days.
ii. Date of hearing- Upon receipt of reply, both the sides shall get the application
fixed for disposal in the Court with the help of Reader of the Court and shall not
wait till next date fixed for hearing. All such miscellaneous applications shall be
registered, numbered and indexed separately.
iii. Evidence not to be stalled- It is clarified that, unless Court Commissioner is of the
view that the interim application moved by either of the parties is such that
evidence cannot be recorded before its disposal, the recording of PE/DE shall
continue unabatedly.
Plaintiff's Evidence
11.In the evidence recorded before Ld. LC, plaintiff company examined
PW1 Alok Gupta. Vide his affidavit Ex.PW1/A, he deposed on the
lines of plaint and exhibited following documents:
i. Exh.PW1/1 is the certified copy of the Board Resolution dated 24.09.2021;
ii. Exh.PW1/2 is the office copy of ledger account of the plaintiff company for the
financial year 2016-17;
iii. Exh.PW1/3 is the office copy of the ledger account of the plaintiff company for the
financial year 2017-18;
iv. Exh.PW1/4 is the office copy of invoice dated 06.04.2018;
v. Exh.PW1/5 is the office copy of LL-RR No.847 dated 06.04.2018;
vi. Exh.PW1/6 is the office copy of invoice dated 16.04.2018;
vii. Exh.PW1/7 is the office copy of LL-RR GR No.6439 dated 16.04.2018;
viii.Exh.PW1/8 is the office copy of invoice dated 08.05.2018;
ix. Exh.PW1/9 is the office copy of LL-RR GR No. 3453 dated 08.05.2018;
x. Exh.PW1/10 is the office copy of invoice dated 06.06.2018;
xi. Exh.PW1/11 is the office copy of LL-RR GR No.1004 dated 06.06.2018;
xii. Exh.PW1/12 is the office copy of invoice dated 23.06.2018;
xiii.Exh.PW1/13 is the office copy of LL-RR GR No.6457 dated 23.06.2018;
xiv. Exh.PW1/14 is the office copy of invoice dated 10.07.2018;
xv. Exh.PW1/15 is the office copy of LL-RR GR No.3464 dated 10.07.2018;
xvi. Exh.PW1/16 is the office copy of invoice dated 31.07.2018;
xvii. Exh.PW1/17 is the office copy of LL-RR No.32 dated 31.07.2018;
xviii.Exh. PW1/18 is the office copy of invoiced dated 02.09.2018;
xix. Exh.PW1/19 is the office copy of LL-RR GR No.592 dated 02.09.2018;
xx. Exh.PW1/20 is the office copy of invoice dated 03.09.2018;
xxi. Exh.PW1/21 is the office copy of LL-RR GR No.773 dated 03.09.2018;
xxii. Exh.PW1/22 is the office copy of invoice dated 08.09.2018;
xxiii.Exh.PW1/23 is the office copy of LL-RR GR No. 799 dated 08.09.2018;
xxiv. Exh.PW1/24 is the office copy of invoice dated 26.09.2018;
xxv. Exh.PW1/25 is the office copy of LL-RR GR No. 894 dated 26.09.2018;
xxvi. Exh.PW1/26 is the office copy of invoice dated 07.10.2018;
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xxvii.Exh.PW1/27 is the office copy of LL RR GR No. 8260 dated 07.10.2018;
xxviii. Exh.PW1/28 is the printout of GST return (in respect of Exh.PW1/4 and
Exh.PW1/6);
xxix. Exh.PW1/29 is the printout of GST return (in respect of Exh.PW1/8);
xxx. Exh.PW1/30 is the printout of GST return (in respect of Exh.PW1/10 and
Exh.PW1/12);
xxxi. Exh.PW1/31 is the printout of GST return ( in respect of Exh.PW1/14 and
Exh.PW1/16);
xxxii. Exh.PW1/32 is the printout of GST return ( in respect of Exh.PW1/18 and
Exh.PW1/20, Exh.PW1/22);
xxxiii. Exh.PW1/32A is the printout of GST return (in respect of Exh.PW1/26);
xxxiv. Exh.PW1/33 to Exh.PW1/39 are the internet copy of the tax deposited by the
plaintiff company;
xxxv. Ex.PW1/40 is the certificate under Section 65B of the Evidence Act;
xxxvi.Exh.PW1/41 is the office copy of the ledger account of the plaintiff company for the
financial year 2018-19;
xxxvii. Exh.PW1/42 is the office copy of the ledger account of the plaintiff company for
the financial year 2019-20;
xxxviii.Exh.PW1/43 is the office copy of the ledger account of the plaintiff company for
the financial year 2020-21;
xxxix. Exh.PW1/44 is the office copy of the notice dated 29.07.2021;
xl. Exh.PW1/45 and Exh.PW1/46 are the original postal receipts;
xli. Exh.PW1/47 and Exh.PW1/48 are the original postal envelops;
xlii.Exh.PW1/49 is the printout of email dated 30.07.2021;
xliii. Exh.PW1/50 is the certificate under Section 65B of the Evidence Act;
xliv. Exh.PW1/51 is the Non-Starter Report dated 06.12.2021.
12.He was cross-examined at length by Ld. Counsel for defendant
wherein he stated that he is director of the plaintiff company since its
inception. He stated that he is personally aware of the facts and that
they used to deal with defendant Kuldeep Rathi and one Mr. Biyani.
He accepted that the plaintiff company had dealings with the
defendant for the last more than ten years whereunder goods were
supplied to him at Delhi from plaintiff's factory at Jharkhand. He
accepted that plaintiff company does not have any godown in Delhi
but they are selling the goods to various States in India including
Delhi and the sales are carried out directly to the purchasers and
traders apart from sales made through agents.
13.PW1 accepted that defendant was their consignment agent. He
accepted that plaintiff company used to give commission to him in
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respect of the sales carried out under the consignment agreement. He
also accepted that the defendant's commission was Rs.150 per ton of
chemical. He claimed that the invoices which was issued for sales
carried out under consignment agreement and sales made directly to
the defendant were different and separate. Defendant used to make on
account payments qua the sales made under the consignment
agreement as well as the direct ones. He denied that all the sales made
to the defendant were under consignment agreement and not by way
of direct sales. Both the sides used to exchange the status of the stocks
as reflected in their account books. He accepted that there is an entry
of stock position of 19.50 metric tons as on 30.04.2016. He stated that
the suit in hand does not pertain to 12 invoices mentioned in the Para 5
of the plaint along as there was opening balance of Rs. 1,36,53,034/-
prior to raising of above invoices in 2018. He stated that although no
such bills were filed but he can bring the same on record. Plaintiff
produced audited balance sheet Ex. PW1/X1 consisting of 51 pages
and copies of invoices for the period 2017-18 as Ex. PW1/X2 with its
corresponding GST Returns as Ex. PW1/X3. They were apparently
produced in support of opening balance of Rs. 1.36 crore odd rupees.
He denied the suggestion that although goods sold by the defendant to
the plaintiff were consignment sales. He also denied the suggestion
that the party direct make the payment to the party.
Defendant's Evidence
14.On the other hand defendant examined himself as DW1 Kuldeep
Rathi. In his affidavit in chief Ex.DW1/A he deposed on the lines of
his WS and has placed only one document on record i.e. Consignment
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Agreement dated 01.01.2011 as Ex. DW1/1. In the fitness of things,
the defendant ought not have been permitted to step into the witness
box in so far as he was allowed to file WS subject to cost of Rs.
18,000/- vide order dated 14.12.2022. The conditional order remained
not complied as no cost has been paid till date.
15.He was cross examined at length by counsel for plaintiff wherein he
accepted that he had business relations with plaintiff from more than a
decade and used to carry out purchase of chemical. The goods were
delivered to him at his office at Vishwas Nagar, Shahdara. He had
been making part payments qua the bills/invoices. Despite assurance
DW-1 could not produce Consignment Agreement Ex. DW1/1. Upon
been confronted with 12 transport bilties, DW-1 accepted that the
goods were received by him and that he has made only part payment
qua the same and the corresponding invoices. He could not give
specific answer qua the details of the part payment and claimed that
his business was being looked after by his employee Sh. B.C. Biyani
who expired in 2020. He accepted that part payments were made to
the plaintiff by bank transfer. He accepted the categorical suggestion
that they were direct dealings between plaintiff and defendant between
2017 to 2021 wherein defendant used to place order and plaintiff used
to supply goods directly to him. However, no orders were placed after
2021. He claimed that he used to maintain ledger account for the
business. He accepted that he is an income tax assessee and submitted
his ITR but did not produce the same despite opportunity. He did not
produce bank statement despite undertaking between 2017 to 2021. He
accepted that he has no document in support of his plea that the goods
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sent him under the 12 invoices were part of consignment sale and not
the direct sales.
16.He accepted that goods which he purchased from plaintiff were sold to
his clients and customers without any interference or connection with
the plaintiff. He could not substantiate to claim that plaintiff has filed
forged and fabricated invoices and statement of account. He denied the
suggestion that he owes any money to the plaintiff.
17. I have heard arguments of Sh. Jagdeep Anand, Ld. Counsel for
Plaintiff and defendant in person and have perused the case file
carefully.
18.Now I shall dispose of issues framed in this case.
Discussion and Findings on Issues:
Issue No. 1
(i) Whether the plaintiff is entitled to recover Rs.35,90,000/- with
pendent lite and future interest @18% per annum? OPP
Plaintiff's Arguments
19.While opening the arguments, it is submitted by Ld. Counsel for
plaintiff that they are manufacturer of various chemicals at their
factory in Jharkhand and that they were selling the products in Delhi
initially through defendants as their consignment agent between 2017
to 2021. It is argued that while it is correct that defendant was getting
his commission as their consignment agent but after rolling out of
GST norms and on earlier occasions, defendant also carried out direct
purchases from the plaintiff company. It is argued that suit in hand
pertains only to the direct sales and the suit amount of Rs. 35.90 lakhs
is the final debit balance after adjusting the periodical part payment
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received against the sales. It is argued that all the dues qua the
consigned sales made as Consignment agent stands cleared.
20. On the other hand, it is argued by defendant vehemently that he has
never carried out any direct purchase from the plaintiff and used to
work as a Consignment Agent on the strength as per contract dated
01.01.2011 i.e. Ex. DW1/1. It is argued that the consignment received
by him under the contract were not actual sales but he used to work as
stockist and frontman of the plaintiff who supplied plaintiff's goods to
third parties. The proceeds of sales received by him were transferred
to the plaintiff and he used to be given commission on the same.
21. It is evident that the plaintiff is totally silent qua existent Ex. DW1/1,
the Consignment Agreement. Upon being asked, Ld. Counsel for
plaintiff submits that the reference to this document found not
necessary as the suit pertains to relation between defendant and
plaintiff as buyer and seller and not as Principal-Consignment Agent.
The existence of this document is accepted by plaintiff in his
replication as well as in his cross examination of PW-1. Perusal of 12
invoices Ex. PW1/4, Ex PW1/6, Ex PW1/8, Ex PW1/10, Ex
PW1/12, Ex PW1/14, Ex PW1/16, Ex PW1/18, Ex PW1/20, Ex
PW1/22, Ex PW1/24 and Ex PW1/26 show that the name of the
defendant proprietorship firm stands mentioned not only as a buyer
but also as a consignee. On being asked, it is stated that the reference
of defendant's name in the space meant for consignee were nothing but
a superfluous reference without intending in anything to the fact that
the goods were part of outright sale and not a consignment sale as Ex.
DW1/1. During the course of final arguments, Ld. Counsel for
plaintiff, on the asking of the Court, placed copies of consignment
CS Comm. No.157/2022 Competent Polymers Pvt. Ltd. Vs. Shree Balaji Traders Page 15 of 20
sales which are drawn by hand where there is only one reference for
the defendant i.e. defendant name of consignee and that the place
meant for buyer is left vacant. The authenticity of the copies is not
disputed by the defendant as well. Likewise, copy of ledger account
for the year 2015-16 was filed where reference to defendant is made as
"goods Sent to Shree Balaji Traders" as against the reference to
Statement of ledger account in direct sales Ex. PW1/2, Ex. PW1/3,
Ex PW1/41, Ex PW1/42 and Ex PW1/43 where he has referred to
"Shree Balaji Traders".
22. Attention of the Court rightly drawn to the detailed cross-examination
of defendant, wherein he accepted that the goods claimed to have been
supplied under 12 invoices were actually received by him that he has
made only part payment qua the same. While the defendant took a
objection in the WS that all the invoices and statement of account are
forged and fabricated, his above replies in the cross-examination are
strikingly contrary to the same. In the WS, he took a stand that all the
business dealings were only consignment sales and there were no
direct sales. He stated in his cross-examination that he had direct
dealings with the plaintiff company after 2017 to 2021 where under
goods were directly supplied to him and that he sold such goods to his
client and customers without any interference and without connection
of the plaintiff. While accepting that he has no evidence to
substantiated the plea that plaintiff forged and fabricated invoices and
statement of account to file the suit. Defendant not only failed to place
the ledger accounts of his business admittedly carried out with the
plaintiff and also apparently refused to file copies of his bank
statement for the block year 2017 to 2021. This calls for drawing an
CS Comm. No.157/2022 Competent Polymers Pvt. Ltd. Vs. Shree Balaji Traders Page 16 of 20
adverse inference against the defendant under Section 114 (g) of
Evidence Act.
Section 114 (g) Evidence Act: Court may presume existence of
certain facts
Illustration
The Court may presume-
(g) That evidence which could be and is not produced would, if produced, be
unfavourable to the person who withholds it;
23.Furthermore, before in filing the suit in hand, plaintiff issued legal
notice dated 29.07.2021, Ex. PW1/44 but the same was not replied by
the defendant. In view of the fact that legal notice was not replied by
the defendant after duly service as per case titled Jayam Company
Vs. T. Ravi Chandaran 2003 (3) RCR (Cr.) 154 Madras
presumption is drawn against defendant that he has admitted the
contents of the legal notice.
24.In another case titled as Metropolis Travels & Resorts (I) Pvt. Ltd.
Vs. Sumit Kalra and Ors., 2002 Latest Caselaw 714 Del wherein it
was observed that :
"13. There is another aspect of the matter which negates the argument
of the respondent and that is that the appellant served a legal notice
on the respondent vide Ex. PW1/3. No rely to the same was given by the respondent. But in spite of the same, no adverse inference was drawn against the defendant. This court in the case of Kalu Ram Vs. Sita Ram 1980 RLR 44 observed that service of notice having been admitted without reservation and that having not been replied in that eventuality, adverse inference should be drawn because he kept quite over the notice and did not send any reply. Observations of Kalu Ram's case (supra) apply on all force to the facts of this case. In the case in hand also despite receipt of notice, respondent did not care to reply nor refuted the averments of demand of the amount on the basis of the invoices/ bills in question. But the Ld. Trial court failed to draw inference against the respondent".
CS Comm. No.157/2022 Competent Polymers Pvt. Ltd. Vs. Shree Balaji Traders Page 17 of 20(Emphasis Supplied)
25.Ld. Counsel for plaintiff has also relied upon case titled as Krishan Kumar Aggarwal Vs. Life Insurance Corporation 2010 Latest Caselaw 3344 Del wherein Hon'ble Delhi High Court observed that:
"65. No explanation has been rendered by the respondent as to why letter dated 23rd August, 2008 and the legal notice send by the appellant were not repudiated or even replied. Despite due receipt, the respondent did not bother to even send any response to the letter dated 23rd August, 2008 or the legal notice, the contents whereof would be deemed to have been admitted. In the judicial precedents reported in Rakesh Kumar Vs. Hindustan Everest Tool Ltd. MANU/SC0396/1988: (1988) 2 SCC 165 & Hirallal Kapur Vs. Prabhu Chaudhary MANU/SC/0189/1988 : (1988) 2 SCC 172 it was held by the Supreme Court that a categorical assertion by the landlord in a legal notice if not replied to and controverted, can be treated as an admission by a tenant.
"66. In a Division Bench proceedings of this court reported in Metropolis Travels and Resorts Vs. Sumit Kalra MANU/DE/0562/2002 : 98 (2002) DLT 573 (DB), no adverse inference was drawn against the respondent for failure to reply the legal notice on consideration of the facts and circumstances of the case. Reference was made to proceedings reported in Kalu Ram Vs. Sita Ram wherein it had been observed that service of notice being admitted without reservation and that having not been replied, in that eventuality, adverse inference should be drawn".
(Emphasis Supplied)
26.In the light of the above judgments of Division Bench of Hon'ble High Court of Delhi, plaintiff has been successful in showing on record that non-reply of legal notice by the defendant may be looked into as a presumption to correctness of the facts contained therein.
27.In so far as plaintiff has filed and exhibited the 12 invoices, the corresponding bilties and statement of account and its PW-1 stood the brunt of lengthy cross-examination and nothing adverse to come on record, I see no reason as to why these documents shall not to believed. The defendant accepted the actual delivery of all the CS Comm. No.157/2022 Competent Polymers Pvt. Ltd. Vs. Shree Balaji Traders Page 18 of 20 consignment in his deposition as DW-1. As such, in view of the above, this issue is answered in favour of the plaintiff and against the defendant.
Interest
28.As far as rate of interest is concerned, plaintiff has claimed 18% interest. No contract or any endorsement on invoices shown in this regard. Even though the debit balance on 31.07.2020 was Rs. 35.90 lakhs, no pre-suit interest is claimed up to 02.03.2022.
29.Interest is payable as per Section 34 CPC. The Civil Court can travel beyond the rate of 6% per annum but are not supposed to exceed the contractual rate of interest. For ready reference Section 34 CPC is reproduced hereunder:
Section 34 CPC: 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, [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 contrac- tual rate of interest or where there is no contractual rate, the rate at which moneys are lent or advanced by nationalized banks in relation to commercial transactions.
30.As per RBI notification dated 30.08.2022 issued vide Press Release no.2022-2023/794 an advisory is issued by RBI to Schedule Commercial Banks of accepting deposit rates @ 9.05% per annum, Plaintiff is entitled to 9% interest per annum.
CS Comm. No.157/2022 Competent Polymers Pvt. Ltd. Vs. Shree Balaji Traders Page 19 of 20Relief
31.In view of the above, suit of plaintiff is accordingly decreed with cost against defendant for a sum of Rs.35.90 lakhs with 9% interest on- wards pendente lite and till actual realization.
32.Decree sheet be prepared accordingly. File be consigned to Record Room after due compliance.
(SURINDER S. RATHI) District Judge, Commercial Court -03 Shahdara District, KKD Delhi/06.05.2023 CS Comm. No.157/2022 Competent Polymers Pvt. Ltd. Vs. Shree Balaji Traders Page 20 of 20