Delhi District Court
Himanshu Sharma vs Ray Of Abundantia on 14 May, 2026
IN THE COURT OF DISTRICT JUDGE (COMMERCIAL
COURT-02) :
SOUTH-EAST DISTRICT : SAKET COURTS : NEW DELHI
PRESIDED BY: LALIT KUMAR:
CS (COMM) 703/2022
Himanshu Sharma
Sole Proprietor,
M/s Shree Ji Fabrics Off.- B-86,
Okhla Phase-II, New Delhi-110020 ......... Plaintiff
Versus
1. M/s Ray of Abundantia
(Formerly known as The Saffron Tree)
Add.- 230, Udyog Vihar,
Phase-IV, Gurugram-122015, Haryana, India
Also at:
199, Udyog Vihar, Phase-IV, Gurugram-122015
Haryana, India
2. Ms. Deepti Kurup,
Partner, M/s Ray of Abundantia
(Formerly known as the Saffron Tree)
Add.- 230, Udyog Vihar,
Phase-IV, Gurugram-122015, Haryana, India
Also at:
199, Udyog Vihar, Phase-IV, Gurugram-122015
Haryana, India
Also at:
B-12, Submit Apartment, Sector-54,
Gurugram-122011
3. Mr. Kumaru K Sreedhara Kurup
Partner,
Add.- 230, Udyog Vihar,
Phase-IV, Gurugram-122015,
CS (COMM) 703/2022 Himanshu Sharma Vs M/s Ray of Abundantia & Ors Page No.1/36
lalit Digitally signed by
lalit kumar
kumar Date: 2026.05.14
17:17:04 +0530
Haryana, India
Also at:
199, Udyog Vihar, Phase-IV,
Gurugram-122015
Haryana, India ....... Defendants
Date of institution of suit : 20.07.2022
Date of hearing final arguments : 06.05.2026
Date of Judgment : 14.05.2026
JUDGMENT
1. Vide this judgment, I shall dispose off the present suit filed on behalf of plaintiff for recovery of Rs.36,04,742/- (Rupees Thirty-Six Lakhs Four Thousand Seven Hundred And Forty-Two Only) alongwith interest from the defendants.
FACTUAL MATRIX OF THE CASE:
Case of the plaintiff 2(a). Brief facts of the case are that plaintiff is the sole proprietor of M/s Shree Ji Fabrics and has been engaged in the business of manufacturing and export of Grey Fabrics for several years.
(b). Defendant no.1, namely M/s Ray of Abundantia (formerly known as The Saffron Tree), is a partnership firm managed by defendants no.2 and 3, who are responsible for its day-to-day affairs. At the request of the defendants, the plaintiff supplied Grey Fabrics on credit basis against various invoices raised during the period from 27.05.2017 to 09.07.2018. Upon reconciliation of accounts, an amount of Rs.23,32,917/- was CS (COMM) 703/2022 Himanshu Sharma Vs M/s Ray of Abundantia & Ors Page No.2/36 found due and payable by the defendants. However, the defendants acknowledged liability to the extent of Rs.20,98,443/-
and, on 07.08.2018, issued a written acknowledgment along with four signed security cheques assuring payment of the said amount in monthly installments.
(c). Despite repeated assurances, the defendants failed to adhere to the agreed payment schedule and made only part payments amounting to Rs.1,00,000/-. Thereafter, in the last week of June 2019, the defendants again acknowledged their outstanding liability and issued four cheques dated 01.07.2019 amounting to Rs.20,98,443/- towards discharge of the principal amount and one additional cheque dated 10.07.2019 for Rs.2,42,299/- towards interest/full and final settlement. However, upon presentation through the plaintiff's banker, all the cheques were dishonoured vide return memos dated 19.07.2019 with the remarks "Drawer's Signature Differs".
(d). Consequently, the plaintiff issued legal demand notices dated 17.08.2019 calling upon the defendants to clear the outstanding dues, but despite service of notice, the defendants failed to make payment. Accordingly, the plaintiff instituted complaint cases under Section 138 of the Negotiable Instruments Act before the competent court, which are presently pending adjudication. Despite repeated requests and reminders, the defendants have failed to discharge their liability and are jointly and severally liable to pay a sum of Rs.36,04,742/-, including principal and interest, along with pendent-lite and future interest @ 18% per annum till realization.
CS (COMM) 703/2022 Himanshu Sharma Vs M/s Ray of Abundantia & Ors Page No.3/36Case of the Defendant 3 (a). Written Statement has been filed on behalf of defendant. It is submitted by Ld. Counsel for defendant that the present suit filed by the plaintiff is wholly misconceived, false, frivolous, and devoid of any cause of action and is therefore liable to be dismissed. The defendants categorically denied all the allegations and averments made in the plaint except those specifically admitted herein. Defendant no.1 is engaged in the business of fabrics and clothing, and defendant no.2 is one of its partners duly authorized to represent the firm. The defendants reserve their right to initiate appropriate legal proceedings, including filing of a counter-claim, against the plaintiff for the losses and damages suffered on account of the plaintiff's conduct.
(b). It is submitted that the parties had longstanding business relations since January 2017 based purely on mutual trust and oral understanding, without any formal written agreement. The payments were always dependent upon clearance from the principal buyers in accordance with the prevailing trade practice and financial norms of the industry. However, the plaintiff repeatedly supplied inferior, defective, and delayed Grey Fabrics, due to which the finished products manufactured by the defendants were rejected by their customers, causing substantial financial losses and loss of business opportunities. Despite repeated requests, the plaintiff neither replaced the defective material nor took back the rejected goods lying in the defendants' godown, thereby aggravating the losses suffered by the defendants.
CS (COMM) 703/2022 Himanshu Sharma Vs M/s Ray of Abundantia & Ors Page No.4/36(c). It is further submitted that the plaintiff has maliciously instituted the present suit as well as proceedings under Section 138 of the Negotiable Instruments Act merely to harass and coerce the defendants. The claim of Rs.36,04,742/- is baseless, exaggerated, and founded upon suppression of material facts. Moreover, the present suit is not maintainable for non-compliance of the mandatory pre-institution mediation under Section 12A of the Commercial Courts Act.
(d). It is also submitted that the invoices relied upon by the plaintiff specifically provide that disputes between the parties are to be referred to the Delhi Hindustani Mercantile Association under its Rules and Regulations and the Arbitration & Conciliation Act. Despite the existence of the arbitration clause, the plaintiff has directly approached this Court without invoking the agreed dispute resolution mechanism. Accordingly, the present suit is liable to be dismissed on account of lack of maintainability, absence of jurisdiction, and abuse of the process of law.
Defendant has denied all the parawise averments in the plaint.
4. No replication to the WS of defendant has been filed on behalf of plaintiff.
5. The present suit was instituted on 20.07.2022 and defendants were ordered to be served on 28.09.2022 by Ld. Predecessor of this court. Defendants have been duly served and CS (COMM) 703/2022 Himanshu Sharma Vs M/s Ray of Abundantia & Ors Page No.5/36 on the next date of hearing, Ld. counsel for defendants had entered his appearance and undertook to file his vakalatnama. Thereafter, WS has been filed on behalf of defendants alongwith an application under order VII Rule 11 CPC. Thereafter, vide order dated 16.02.2023, following issues were framed by Ld. Predecessor of this court.
ISSUES:
(i) Whether the suit of the plaintiff is maintainable as per the mandate of Commercial Courts Act, 2015? (OPD)
(ii) Whether the suit of the plaintiff is misconceived and has been filed only to harass the defendant? (OPD)
(iii) Whether the plaintiff is entitled for a decree for a sum of Rs. 36,04,742/- (Rupees Thirty Six Lakhs Four Thousand Seven Hundred Forty Two Only) in favour of the plaintiff and against the defendant? (OPP)
(iv) Whether the plaintiff is entitled for interest on the decretal amount, pedente lite and future, if yes, then at what rate? (OPP)
(v) Whether the plaintiff is also entitled to cost of the suit?
(OPP)
(vi) Relief.
EVIDENCE
Evidence of Plaintiff
6 (a). The matter then was kept for evidence. In order to prove
the case plaintiff has examined himself as PW-1 who tendered his evidence by way of affidavits Ex. PW1/A and Ex.PW1/B on similar lines as that of plaint. He also relied upon following documents:
1. Copy of GST registration certificate as Ex.PW1/1.
2. Certified copies of invoices/bills issued during the period ranging from 27.05.2027 to 09.07.2018 as Ex.PW1/2.CS (COMM) 703/2022 Himanshu Sharma Vs M/s Ray of Abundantia & Ors Page No.6/36
3. Copy of letter dated 07.08.2018 as Ex.PW1/3 (colly) (OSR).
4. Copy of cheques bearing No. 691525, 691526, 691527 and 691528 as Ex.PW1/4 (colly) (OSR).
5. Certified copy of cheques bearing no. 526548, 526549, 526550 and 526551 all dated 01.07.2019 as Ex.PW1/5 (colly).
6. Certified copy of cheque bearing No. 229881 dated 10.07.2019 as Ex.PW1/6.
7. Certified copy of dishonour memos all dated 19.07.2019 as Ex.PW1/7 (colly).
8. Original of two demand notes dated 17.08.2019 as Ex.PW1/8 (colly).
9. Certified copy of complaint bearing No. 39872/2019 filed before the court of Ld. MM, South East District as Ex.PW1/9.
10. Certified copy of complaint bearing No. 39875/2019 filed before the court of Ld. MM, South East District as Ex.PW1/10.
11. Certificate under section 65B of IEA as Ex.PW1/11.
12. Another certificate under section 65B of IEA with regard to Whatsapp chat dated 14.03.2020 alongwith Whatsapp chat as Ex.PW1/12 (colly).
(b). The said witness was cross examined by Ld. Counsel for defendant. His cross examination is reproduced as under:
"Q: At the time when these transactions took place, were you a member of Delhi Hindustani Merchant Association? A: No. Q: Is it correct that you were never a member of this association? A: No. I was never a member of the association because by default, whoever works as fabric supplier comes under this association.
Q: Is it correct that your invoices mentioned this association and specifically mentions that dispute resolution will be through this association and be final and binding upon the parties? A: Not necessarily.
Q: Is it correct that as per the association rules, there is an arbitration clause?
A: I am not aware about the same.
At this stage, witness is confronted with annexure-II at page no.24 to 27 of the Written statement.
Q: Are you bound by the arbitration clause at page no.24 to 27 of the WS? (objected to the genuineness of the said documents being photocopy).
A: Yes. As said in the said document it is written that the association would give the free advice and rest dispute would be resolved as per law.
Q: Before filing this suit, did you initiate any arbitration proceedings under the said clause?
A: No. Q: In the NI Act case you have referred to certain purchase orders for the claim period, is that correct?CS (COMM) 703/2022 Himanshu Sharma Vs M/s Ray of Abundantia & Ors Page No.7/36
A: Yes.
Q: Are those purchase orders on court record in the present suit? A: The purchase orders are not on record in the present suit. At this stage, the witness is confronted with the copy of certified copies of purchase orders as annexed in the NI Act case to which he states that he has seen the ten purchase order and agreed to the same and the same is now Ex.PW1/D-1 (colly) (running into 1 to 13 pages).
Q: Can you show each invoice relied upon in this suit corresponding to each purchase order as relied upon by you for the same transaction?
A: It is a matter of record which can be discussed at the time of final arguments and whenever orders comes from the opposite factory, the PO comes later sometimes and goods go earlier before PO. It has happened many times and in some of the dispatch of the goods, the exact PO quantity cannot be matched because the goods comes in packed big bails from the mills and we cannot cut the cloth and give the same amount. There are some goods which are matching with the PO and the bills like PO at page no.6 corresponds to invoice at page no.26, PO at page no.4 corresponds to invoices at page no.25 and 26.
Q: According to you the goods come to you and you directly sent the packed big bail to the customer, is it correct? A: Yes, it is correct. In some of the qualities of fabric which are being packed as big bails are directly handed over to the customers and in some of the regular qualities, which we stock, we give the exact quantities.
Q: Have you filed any delivery challans or transport receipt in this suit?
A: Yes, because in some of the invoices, on delivery the signatures of the person who receives the goods is already there on record from the defendant and the transport receipts are never given to the clients.
Q: Are you saying that the invoices on record are the only delivery proves?
A: No, they are not just the delivery proves, we sometimes give delivery on challans and most of the times on bills after delivery of goods when I took the bills to the fabric manager of defendant company.
Q: Is it correct that on several invoices placed on record the space for PO number and challan are blank?
A: Yes, they are blank.
Q: Is it correct that several invoices placed on record are not uniform in format and acknowledgment?
A: No it is not correct.
Q: Can you show the specific PO Ex.PW1/D-1 placed on record today, authorising supply of invoiced quantity of VISCOSE-MOSS of 13 kg?
A: There are several POs in which 13 kg VISCOSE-MOSS are being ordered i.e. at page no.4, 5 and 7.".
Evidence of Defendant 7 (a). Thereafter, matter was kept for defence evidence. Defendant CS (COMM) 703/2022 Himanshu Sharma Vs M/s Ray of Abundantia & Ors Page No.8/36 in order to prove his case has examined Sh. Naresh Singh Rajput, Clerk in Delhi Hindustani Merchantile Association as DW-1. His examination is reproduced as under:
"Today, I have brought the summoned record i.e. rules and regulations of Delhi Hindustani Mercantile Association alongwith performa of membership form which is now Ex.DW1/1 (colly). It is correct that the Delhi Hindustani Mercantile Association is an association exclusively for fabric/cloth merchants. It is correct that disputes are referred to Arbitration through our association in case the invoices refer to the Arbitration Clause as per our association. The disputes are adjudicated under the provisions of Arbitration & Conciliation Act, 1996. It is correct that disputes are referred from civil courts in cases where Arbitration Clause are mentioned on the invoices of the parties. It is correct that a non member who has mentioned Arbitration Clause as per rules of our association can apply for Arbitration after becoming the member. At this stage, witness is confronted with document Mark A i.e. order which was passed by Ld. District Judge (COMM-06), Tis Hazari Court in CS (COMM) 257/24 to which he states that this matter was referred by Civil Court to Arbitration as per our association rules. He further states that the Arbitration award has been passed in this case. It is correct that as per the record brought by me, Sh. Himanshu Sharma or M/s Shree Ji Fabrics is not a member of our association".
(b). The said witness was cross examined by Ld. Counsel for plaintiff. His cross examination is reproduced as under:
"It is correct that for applying for membership and becoming a member of Delhi Hindustani Mercantile Association, the membership form has to be filled by the intending party. The membership of the association can only be taken by a company which is running a cloth business. It is correct that membership fees to be paid for becoming a member. The admission committee of the association in its discretion may approve or disapprove the membership. It is correct that until a person/company/firm does not become a member, he/it cannot apply for arbitration with our association. The case Mark A was referred for Arbitration to our association approximately two months back after the order of the court. It is correct that in document Mark A, there is no mention of reference of the case to our association for the Arbitration. At this stage, witness states that Mark A is not the complete copy of the order. It is correct that after reading the order Mark A, I cannot say that this case has been referred for Arbitration to our association. It is correct that I have seen this order for the first time today in the court, when it was shown to me during my examination in chief. One case bearing similar title was received by our association and decided. The said case was filed by M/s A & A Associates, who is a member of our association. I cannot say since when M/s A & A Associates has CS (COMM) 703/2022 Himanshu Sharma Vs M/s Ray of Abundantia & Ors Page No.9/36 been member of our association. It is correct that M/s Ray of Abundantia is not a member of our association. There are various formalities for getting the membership of the association including the details of entity including the relevant documents of incorporation, tax returns and GST etc. It is correct that we do not entertain non members for arbitration. ".
8. Ld. counsel for plaintiff has relied upon following judgments:
1. Narinder Kumar Chaudhary vs. Rajesh, 2023 SCC Online Del 8641.
2. Hetampuria Tax Fab vs. Daksh Enterprises, 2022 SCC Online Del 3895.
9. Ld. counsel for defendant has relied upon following judgments:
1. Rohini Strips Ltd. & Anr. vs. Steel Authority of India, FAO (OS) No.380/2007.
2. Vishal Hira Merchant Pvt. Ltd. & Ors. vs. HDFC Bank, WP(C) No.603/2016.
3. Shakti Bhog Food Industries Ltd. vs. The Central Bank of India & Anr. vide Civil Appeal No.2514 of 2020.
4. Scholar Publishing House Pvt. Ltd. vs. M/s Khanna Traders, FAO (OS) No.184/2013.
5. Srinivas Raghavendrao Desai vs. V. Kumar Vamanrao @ Alok, CA No.7293-7294 of 2010.
6. M/s Dhanbad Fuels Pvt. Ltd. vs. UOI, CA No.6846/2025.
10. Final arguments heard. Record perused carefully. I have gone through the testimony of the plaintiff's witness and on the basis of documents, pleadings and testimony of witnesses, my issue wise findings are as follows:
ANALYSIS AND ISSUEWISE FINDINGS:
Issue No. 1: Whether the suit of the plaintiff is maintainable as per the mandate of the Commercial Courts Act, CS (COMM) 703/2022 Himanshu Sharma Vs M/s Ray of Abundantia & Ors Page No.10/36 2015? (OPD)
11. The onus to prove this issue was upon the defendants. The defendants have challenged the maintainability of the present suit principally on the grounds that (i) alleged non-compliance of Section 12A of the Commercial Courts Act, 2015, (ii) existence of an arbitration clause in the invoices and (iii) alleged procedural defects under the Commercial Courts Act and amended CPC provisions applicable to commercial disputes.
Before examining the rival contentions, it is necessary to note that the present suit pertains to recovery arising out of commercial transactions involving supply of Grey Fabrics against invoices and cheques issued in the course of business dealings between the parties. The transactions are admittedly commercial in nature and clearly fall within the ambit of a "commercial dispute"
under Section 2(1)(c) of the Commercial Courts Act, 2015.
The Commercial Courts Act, 2015 was enacted with the avowed object of ensuring speedy, efficient and specialized adjudication of commercial disputes of specified value. The Statement of Objects and Reasons of the Act reflects legislative intent to streamline commercial litigation, reduce delays and improve the ease of doing business. Section 2(1)(c) of the Commercial Courts Act defines "commercial dispute" broadly and includes disputes arising out of ordinary transactions of merchants, traders and mercantile documents.
The present dispute arises out of supply of fabrics, invoices, cheques, acknowledgment of liability and business transactions CS (COMM) 703/2022 Himanshu Sharma Vs M/s Ray of Abundantia & Ors Page No.11/36 between commercial entities. Hence, the nature of dispute squarely falls within the statutory framework of the Commercial Courts Act.
The first contention of the defendants is that the suit is barred for non-compliance of Section 12A of the Commercial Courts Act.
At this stage, Section 12A of the Commercial Courts Act deserves reproduction: "12A. Pre-Institution Mediation and Settlement. (1) A suit, which does not contemplate any urgent interim relief under this Act, shall not be instituted unless the plaintiff exhausts the remedy of pre-institution mediation..."
The language of Section 12A itself carves out an express exception where the suit contemplates urgent interim relief.
The judicial record demonstrates that the plaintiff had filed an application seeking exemption from pre-institution mediation along with an application under Order XXXVIII Rule 5 CPC seeking urgent interim relief. The learned predecessor of this Court, after considering the pleadings and affidavit of the plaintiff, allowed the exemption application vide order dated 28.09.2022. The said order was never challenged by the defendants before any superior forum and therefore attained finality. The defendants cannot now indirectly reopen the correctness of the said judicial order at the stage of final adjudication.
12. The settled principle of law is that judicial orders attaining finality between parties cannot be collaterally challenged in final arguments. In K.S. Bhoopathy v. Kokila, (2000) 5 SCC 458, the CS (COMM) 703/2022 Himanshu Sharma Vs M/s Ray of Abundantia & Ors Page No.12/36 Hon'ble Supreme Court held that once judicial discretion has been exercised and the order has attained finality, parties cannot reagitate the same issue indirectly.
Similarly, in Satyadhyan Ghosal v. Deorajin Debi, AIR 1960 SC 941, the Hon'ble Supreme Court explained the doctrine of finality of judicial orders and held that matters already decided between the parties cannot be reopened at subsequent stages of the same proceedings.
Even otherwise, the objection is devoid of merit because the suit contemplated urgent interim relief at the time of institution. Therefore, the present case falls within the statutory exception contained in Section 12A itself.
The defendants have relied upon M/s Dhanbad Fuels Pvt. Ltd. v. Union of India, CA No.6846/2025. The said judgment is distinguishable on facts because in the present case (i) an exemption application under Section 12A was specifically filed,
(ii) urgent interim relief was sought under Order XXXVIII Rule 5 CPC and (iii) exemption was judicially granted by a competent Court and attained finality. Hence, the objection regarding Section 12A is rejected.
The second contention raised by the defendants is that the suit suffers from procedural defects under Order XI CPC and that electronic evidence ought not to be considered.
This contention is also devoid of substance. Firstly, the core foundation of the plaintiff's case does not rest solely on electronic evidence. The plaintiff has independently proved invoices, acknowledgment letter, cheques, dishonour memos and legal CS (COMM) 703/2022 Himanshu Sharma Vs M/s Ray of Abundantia & Ors Page No.13/36 notices. Secondly, certificates under Section 65B of the Indian Evidence Act were brought on record as Ex.PW1/11 and Ex.PW1/12. Thirdly, even assuming arguendo that WhatsApp chats are excluded from consideration, the plaintiff's case still stands independently proved through documentary evidence and admitted transactions.
It is also noteworthy that despite repeated opportunities, the defendants failed to file proper affidavit of admission/denial of documents as required under the Commercial Courts Act regime. The defendants therefore cannot derive advantage from their own procedural defaults.
The defendants have not disputed the business dealings with the plaintiff, raising of the invoices by the plaintiff, issuance of cheques by them, commercial nature of transactions; and specified value of the dispute. The present suit therefore squarely satisfies the requirements of Section 2(1)(c) of the Commercial Courts Act, specified value requirement under Section 2(1)(i) and territorial and pecuniary jurisdiction already exercised by this Court. Hence, the defendants failed to prove any statutory bar to maintainability.
In Patil Automation Pvt. Ltd. v. Rakheja Engineers Pvt. Ltd., (2022) 10 SCC 1, the Hon'ble Supreme Court held that Section 12A is mandatory where no urgent interim relief is sought. However, the Court simultaneously recognized the statutory exception where urgent interim relief is contemplated. In Ambalal Sarabhai Enterprises Ltd. v. K.S. Infraspace LLP, (2020) 15 SCC 585, the Hon'ble Supreme Court reiterated that the Commercial Courts Act must be interpreted keeping in mind the CS (COMM) 703/2022 Himanshu Sharma Vs M/s Ray of Abundantia & Ors Page No.14/36 legislative object of expeditious adjudication of commercial disputes.
13. In the present matter, the defendants failed to establish any enforceable mechanism capable of implementation.
The defendants have failed to prove that the present suit is barred under the Commercial Courts Act or otherwise not maintainable. The objection under Section 12A is barred by finality of judicial order and otherwise falls within statutory exception of urgent interim relief.
The remaining objections are either procedural in nature or unsupported by evidence and do not affect the maintainability of the present commercial suit. Accordingly, Issue No.1 is decided against the defendants and in favour of the plaintiff.
Issue No.2: Whether the suit of the plaintiff is misconceived and has been filed only to harass the defendant? (OPD)
14. The onus to prove this issue was upon the defendants. The defendants have alleged that the present suit is false, frivolous, misconceived and filed only with an intention to harass the defendants. However, after careful scrutiny of the pleadings, documentary evidence, oral testimony and conduct of the parties, this Court finds no merit in the said objection.
The defendants, in their written statement, alleged that the plaintiff supplied defective and delayed Grey Fabrics, that the plaintiff instituted the present proceedings maliciously and that the suit is an abuse of process of law. However, except making bald CS (COMM) 703/2022 Himanshu Sharma Vs M/s Ray of Abundantia & Ors Page No.15/36 allegations, the defendants failed to place on record any cogent evidence substantiating such plea.
On the contrary, the documentary evidence led by the plaintiff clearly establishes a genuine commercial transaction between the parties. The plaintiff proved invoices/bills Ex.PW1/2, acknowledgment letter dated 07.08.2018 as Ex.PW1/3, cheques as Ex.PW1/4, Ex.PW1/5 and Ex.PW1/6, dishonour memos as Ex.PW1/7, legal notices as Ex.PW1/8 and pending complaints under Section 138 NI Act as Ex.PW1/9 and Ex.PW1/10.
The very issuance of cheques by the defendants towards discharge of liability demolishes the plea that the suit is frivolous or vexatious. The defendants not only issued one set of cheques but subsequently replaced earlier cheques with fresh cheques dated 01.07.2019. Such conduct is wholly inconsistent with the plea that no amount was payable.
Further, the defendants admittedly made part payments of Rs.50,000/- on 28.12.2018 and Rs.50,000/- on 10.06.2019. Such part payments constitute acknowledgment of liability and clearly negate the plea that the claim is fabricated or intended merely to harass.
It may be seen that PW-1 categorically deposed that goods were supplied to the defendants during the period 27.05.2017 to 09.07.2018, that payments remained outstanding, that the defendants acknowledged liability and issued cheques, and that the cheques were dishonoured. His testimony remained materially unshaken during cross-examination.
In cross-examination, PW-1 was questioned regarding CS (COMM) 703/2022 Himanshu Sharma Vs M/s Ray of Abundantia & Ors Page No.16/36 purchase orders, invoices and arbitration clause. However, the defendants themselves confronted PW-1 with certified copies of purchase orders, which were exhibited as Ex.PW1/D-1 colly. This confrontation in fact strengthens the plaintiff's case because it confirms the underlying transactions and supply orders between the parties. PW-1 further explained the commercial practice prevailing in the fabric trade regarding dispatch and quantity matching. His explanation remained natural and credible.
Significantly, despite extensive cross-examination, no suggestion was successfully proved that the invoices were fabricated, the goods were never supplied, or that the cheques were not issued by the defendants.
The defendants examined only DW-1, namely Sh. Naresh Singh Rajput from Delhi Hindustani Mercantile Association. DW-1 admittedly had no personal knowledge regarding supply of goods, accounts between parties, alleged defects, issuance of cheques dishonour of cheques or discharge of liability. The testimony of DW-1 was confined merely to membership and arbitration procedure of the Association. Even that testimony ultimately weakened the defendants' case because DW-1 admitted that neither party was a member and that non-members are not entertained for arbitration.
Crucially, no partner, proprietor, accountant, quality inspector or responsible officer of the defendants entered the witness box to prove supply of alleged defective goods, delayed in supply by the plaintiff, rejection of goods by customers, consequently the defendant suffered financial losses or discharge CS (COMM) 703/2022 Himanshu Sharma Vs M/s Ray of Abundantia & Ors Page No.17/36 of liability. In Vidhyadhar v. Manikrao, AIR 1999 SC 1441, the Hon'ble Supreme Court held that where a party abstains from entering the witness box, an adverse inference can legitimately be drawn against such party.
15. In the present matter, the defendants alone were in possession of the best evidence regarding alleged defects and rejection of goods. Their failure to lead such evidence creates serious doubt regarding the genuineness of their defence.
The defendants alleged that the plaintiff supplied defective and delayed fabrics causing rejection by customers. However, not a single contemporaneous document has been proved in support of this plea. No rejection letter, inspection report, debit note, email complaint, return challan, customer communication or quality assessment report has been brought on record.
On the contrary, the conduct of the defendants demonstrates acknowledgment of liability. If the goods were genuinely defective, there was no occasion for the defendants to issue acknowledgment letter dated 07.08.2018 , issue repeated cheques, replace earlier cheques with fresh cheques and made part payments.
The WhatsApp communication exhibited as Ex.PW1/12 also reflects that the defendants were facing business/payment difficulties and were attempting to "make a comeback", rather than disputing the quality of goods. Therefore, the plea of defective goods is clearly an afterthought raised only to evade payment.
CS (COMM) 703/2022 Himanshu Sharma Vs M/s Ray of Abundantia & Ors Page No.18/3616. Section 101, Indian Evidence Act, 1872 (now BSA) contemplates that whoever desires any Court to give judgment as to any legal right or liability dependent on the existence of facts which he asserts, must prove that those facts exist.
Since the defendants alleged harassment, frivolousness and absence of liability, the burden was upon them to prove the same through reliable evidence. They failed to discharge this burden.
Section 114, Indian Evidence Act, 1872 contemplates that the Court may presume the existence of any fact which it thinks likely to have happened...
Applying ordinary commercial conduct, issuance of multiple cheques, acknowledgment letter and part payments clearly indicate existence of a genuine commercial liability.
Section 42, Sale of Goods Act, 1930 contemplates that the buyer is deemed to have accepted the goods... when after lapse of reasonable time he retains the goods without intimating rejection.
The defendants admittedly retained the goods and failed to prove lawful rejection.
The Commercial Courts Act was enacted to ensure speedy adjudication of genuine commercial disputes. Merely because a commercial plaintiff seeks recovery of legitimate dues cannot render the suit vexatious or harassing.In fact, the record reveals that the plaintiff approached the Court only after repeated defaults by defendants , dishonour of cheques and failure of legal notices.
17. The plaintiff also initiated proceedings under Section 138 NI Act based on dishonoured cheques. Such proceedings are CS (COMM) 703/2022 Himanshu Sharma Vs M/s Ray of Abundantia & Ors Page No.19/36 legally permissible and arise from a separate statutory cause of action. In "ICDS Ltd. v. Beena Shabeer, (2002) 6 SCC 426", the Hon'ble Supreme Court held that issuance and dishonour of cheques create enforceable legal consequences and entitle the payee to pursue legal remedies.
The defendants failed to prove any mala fide intention, fabrication, suppression of material facts or abuse of process by the plaintiff.
The defendants attempted to contend that the present suit was filed only to coerce them alongside NI Act proceedings. This contention is legally untenable because civil proceedings for recovery and criminal proceedings under Section 138 NI Act are independent and maintainable simultaneously. In "Sangeetaben Mahendrabhai Patel v. State of Gujarat, (2012) 7 SCC 621", the Hon'ble Supreme Court held that civil liability and criminal liability may coexist and simultaneous proceedings are legally permissible.
Therefore, merely because NI Act complaints are pending does not render the present recovery suit misconceived or harassing.
18. In view of the forgoing discussion and applying the settled principle of law, the defendants have failed to prove that the suit is false, frivolous, vexatious or filed merely to harass them.
On the contrary, the evidence on record establishes genuine commercial transactions, supply of goods, acknowledgment of liability, issuance of cheques, dishonour of cheques and failure of CS (COMM) 703/2022 Himanshu Sharma Vs M/s Ray of Abundantia & Ors Page No.20/36 defendants to discharge admitted liability.
The defendants' pleas remained unsupported by documentary or oral evidence and appear to be evasive and afterthought defences raised to avoid payment of legitimate commercial dues.
Accordingly, issue No. 2 is decided against the defendants.
Issue No.3: Whether the plaintiff is entitled for a decree for a sum of Rs.36,04,742/- in favour of the plaintiff and against the defendants? OPP
19. The onus to prove this issue was upon the plaintiff. The plaintiff has claimed a decree for Rs.36,04,742/-, comprising Rs.23,40,742/- towards the cheque/liability amount and Rs.12,64,000/- towards pre-suit interest calculated @ 18% per annum from 19.07.2019 till institution of the suit.
The plaintiff's pleaded case is that he is the sole proprietor of M/s Shree Ji Fabrics, engaged in manufacturing and export of Grey Fabrics. Defendant No.1, M/s Ray of Abundantia, is a partnership firm, managed by defendants No.2 and 3. Grey Fabrics were supplied to the defendants on credit basis against invoices during the period 27.05.2017 to 09.07.2018. Upon reconciliation, the plaintiff claimed that Rs.23,32,917/- was outstanding, while the defendants acknowledged liability of Rs.20,98,443/- and issued a letter dated 07.08.2018 with four security cheques. The defendants thereafter made only part payment of Rs.1,00,000/- and subsequently issued four cheques dated 01.07.2019 for Rs.20,98,443/- and one cheque dated CS (COMM) 703/2022 Himanshu Sharma Vs M/s Ray of Abundantia & Ors Page No.21/36 10.07.2019 for Rs.2,42,299/-, all of which were dishonoured vide memos dated 19.07.2019 with the remarks "Drawer's Signature Differs".
The defence, in substance, is that the goods were defective/delayed, that the suit is barred for want of pre- institution mediation under Section 12A of the Commercial Courts Act, that the invoices contained an arbitration clause referable to Delhi Hindustani Mercantile Association, and that the suit is barred by limitation. However, these objections do not dislodge the plaintiff's documentary proof or the admissions emerging from the record.
The plaintiff has relied upon the following documents, GST registration certificate Ex.PW1/1, invoices/bills for the period 27.05.2017 to 09.07.2018 as Ex.PW1/2, letter dated 07.08.2018 as Ex.PW1/3, security cheques as Ex.PW1/4; fresh cheques dated 01.07.2019 as Ex.PW1/5, cheque dated 10.07.2019 as Ex.PW1/6, dishonour memos dated 19.07.2019 as Ex.PW1/7, demand notices dated 17.08.2019 as Ex.PW1/8, NI Act complaints as Ex.PW1/9 and Ex.PW1/10, and electronic record certificates as Ex.PW1/11 and Ex.PW1/12.
The defendants, in their written statement, admitted the business relationship and receipt of materials, but sought to avoid liability by alleging that the materials were defective and delayed. However, no inspection report, rejection letter, debit note, customer complaint, correspondence, return challan, expert report or ledger reconciliation has been proved by the defendants to substantiate such plea. A plea of defective goods cannot be CS (COMM) 703/2022 Himanshu Sharma Vs M/s Ray of Abundantia & Ors Page No.22/36 accepted merely on assertion, particularly where the purchaser has retained the goods, acknowledged liability, issued cheques and made part payment.
The letter dated 07.08.2018, proved as Ex.PW1/3, is a material acknowledgment of liability. The subsequent issuance of cheques dated 01.07.2019 and 10.07.2019, proved as Ex.PW1/5 and Ex.PW1/6, further constitutes a clear admission of subsisting liability. Dishonour memos dated 19.07.2019, proved as Ex.PW1/7, complete the chain of proof.
20. In order to crew, his case, the plaintiff has examined himself as PW-1 and tendered his evidence by way of affidavits Ex.PW1/A and Ex.PW1/B, reiterating that goods were supplied on credit, payments remained outstanding, liability was acknowledged by the defendants, cheques were issued, and the cheques were dishonoured. His affidavit specifically deposes that Rs.20,98,443/- was acknowledged by the defendants and that the defendants issued cheques towards principal liability and Rs.2,42,299/- towards interest/settlement amount.
In cross-examination, PW-1 was questioned regarding the Delhi Hindustani Mercantile Association and arbitration clause. He stated that he was not a member of the association. He was also questioned on purchase orders. The certified copies of purchase orders were put to him and exhibited as Ex.PW1/D-1 colly. Instead of weakening the plaintiff's case, this confrontation strengthens it, because the defendant thereby admitted that purchase orders existed and that there were commercial CS (COMM) 703/2022 Himanshu Sharma Vs M/s Ray of Abundantia & Ors Page No.23/36 transactions between the parties.
PW-1 was also asked whether every invoice corresponded exactly with every purchase order. He explained that in the fabric trade, goods are often supplied in packed bales, and exact quantity may not always correspond arithmetically with the purchase order quantity. This explanation is natural, trade- consistent and not shaken in cross-examination. The defendants did not prove any contemporaneous objection that the goods supplied under the invoices were never received or were rejected.
The cross-examination of PW-1, therefore, does not demolish the plaintiff's case. Rather, it confirms that (i) business dealings were exiting between the parties, (ii) existence of purchase orders by the defendants, (iii) supply of goods to defendants by the plaintiff, (iv) issuance of invoices by the plaintiff, (v) issuance of cheques by the defendants to the plaintiff and (vi) absence of any proved contemporaneous rejection of goods.
21. To substantiate the case, the defendants examined only DW-1, Sh. Naresh Singh Rajput, Clerk, Delhi Hindustani Mercantile Association. He was not a witness to the transactions, supply of goods, alleged defects, issuance of cheques, dishonour, accounts, or settlement. His testimony is confined only to the rules and membership of the Association.
In cross-examination, DW-1 admitted that neither the plaintiff nor defendant No.1 was a member of the Association and that the Association does not entertain non-members for CS (COMM) 703/2022 Himanshu Sharma Vs M/s Ray of Abundantia & Ors Page No.24/36 arbitration. He further admitted that until a person/company/firm becomes a member, it cannot apply for arbitration before the Association. Thus, the defendants' own witness has destroyed the plea that the plaintiff was bound to first invoke arbitration before the Association. The alleged arbitral mechanism was, on the defendants' own evidence, unavailable to both parties. Hence, the arbitration objection is not only legally untenable but factually self-defeating.
Significantly, no partner of the defendant firm entered the witness box. No person having personal knowledge of the transactions was examined. No books of account were produced. No evidence of defective goods was led. The Court is therefore justified in drawing an adverse inference against the defendants under the principles underlying Section 114 of the Evidence Act(Section 119 of BSA).
22. Section 101 of Indian Evidence Act, 1872 (now BSA) describes the principle of Burden of proof and contemplates that whoever desires any Court to give judgment as to any legal right or liability dependent on the existence of facts which he asserts, must prove that those facts exist.
The plaintiff has discharged the initial burden by producing invoices, acknowledgment letter, cheques, dishonour memos and demand notices. Once these documents stood proved, the evidentiary burden shifted to the defendants to establish discharge, defect, rejection, adjustment or absence of liability. The defendants failed to do so.
CS (COMM) 703/2022 Himanshu Sharma Vs M/s Ray of Abundantia & Ors Page No.25/36Section 114, Indian Evidence Act, 1872 (now BSA) pertains to Presumption and contemplates that the Court may presume the existence of any fact which it thinks likely to have happened, regard being had to the common course of natural events, human conduct and public and private business.
It is pertinent to note that in the common course of commercial dealings, a party does not issue multiple cheques, make part payments and replace earlier cheques with fresh cheques unless a liability exists. The conduct of the defendants therefore supports the plaintiff's case.
Section 25(3), of Indian Contract Act, 1872 contemplates that it is a promise, made in writing and signed by the person to be charged therewith to pay wholly or in part a debt of which the creditor might have enforced payment but for the law for the limitation of suits.
The written acknowledgment dated 07.08.2018 and subsequent cheques constitute written acknowledgment/promise of liability. The defendants cannot accept the benefit of goods and thereafter deny liability without proving discharge or valid rejection.
Section 31 of Sale of Goods Act, 1930 contemplates that it is the duty of the seller to deliver the goods and of the buyer to accept and pay for them, in accordance with the terms of the contract of sale.
The plaintiff delivered goods. The defendants accepted them, retained them, issued cheques and made part payments. No lawful rejection under the Sale of Goods Act has been proved.
CS (COMM) 703/2022 Himanshu Sharma Vs M/s Ray of Abundantia & Ors Page No.26/36Section 42 of Sale of Goods Act, 1930 contemplates that the buyer is deemed to have accepted the goods when he intimates to the seller that he has accepted them, or when the goods have been delivered to him and he does any act in relation to them which is inconsistent with the ownership of the seller, or when, after the lapse of a reasonable time, he retains the goods without intimating to the seller that he has rejected them.
The defendants retained the goods and did not prove rejection within reasonable time. The plea of defective goods, raised without contemporaneous documents, is an afterthought.
The contention regarding non-compliance of Section 12A of commercial court act, is untenable. The record demonstrate that the plaintiff had filed an application seeking exemption from pre-institution mediation. The said application was allowed on 28.09.2022 before issuance of summons. That order was never challenged and attained finality. The defendant cannot, at final arguments, indirectly reopen an order which has become final inter partes. Further, the plaint was accompanied by an application under Order XXXVIII Rule 5 CPC seeking urgent interim relief. Therefore, the suit fell within the exception carved out under Section 12A, namely, suits contemplating urgent interim relief.
23. Other contention of the defendant that the arbitration clause in invoices regarding initiation of arbitration in case of dispute between the party, has already been considered and rejected by the learned predecessor vide order dated 05.03.2024 while CS (COMM) 703/2022 Himanshu Sharma Vs M/s Ray of Abundantia & Ors Page No.27/36 dismissing the defendant's application under Order VII Rule 11 CPC. The said order has attained finality. The same objection cannot be re-agitated at the stage of final arguments.
Even on merits, DW-1 has admitted that both sides were non-members and that the Association does not entertain non- members for arbitration. Hence, the alleged printed arbitration clause was incapable of practical enforcement. A civil court cannot non-suit a plaintiff by sending him to a forum which, on evidence, would not entertain the dispute.
Another contention of the defendants with regard to filing of the present suit beyond the limitation period and being the time barred, is also misconceived. The dishonour memos are dated 19.07.2019. The suit was e-filed on 18.07.2022, i.e., within three years. The defendant's argument that the suit was filed on 19.07.2022 is contrary to the e-filing record referred to by the plaintiff. Even otherwise, the plaintiff relies on acknowledgment dated 07.08.2018, part payments on 28.12.2018 and 10.06.2019, and fresh cheques dated 01.07.2019 and 10.07.2019, all of which extend/confirm the subsisting liability.
The defendant's reliance upon judgments on limitation is distinguishable because this is not a case of mere correspondence or unilateral demand. It is a case of written acknowledgment, part payment, issuance of cheques, and dishonour within the limitation period.
Further, the defendants plea of defective/delayed goods is wholly unproved. No partner or officer of the defendant firm entered the witness box. No customer rejection, quality report, CS (COMM) 703/2022 Himanshu Sharma Vs M/s Ray of Abundantia & Ors Page No.28/36 photographs, debit notes, return challans or commercial correspondence were proved. The defendants continued dealing with the plaintiff, acknowledged liability, issued cheques and made part payments. Such conduct is inconsistent with the plea that the goods were defective and that no payment was due. In "Rangappa v. Sri Mohan, AIR 2010 SC 1898", the Supreme Court held that once execution of cheque is admitted, statutory presumption arises that the cheque was issued in discharge of a legally enforceable debt or liability. Though the present proceeding is a civil suit, the principle that issuance of cheque is a strong evidentiary circumstance remains applicable.
In "Vidhyadhar v. Manikrao (Supra)", the Supreme Court held that where a party does not enter the witness box and does not offer itself for cross-examination, an adverse inference may be drawn against it. In the present case, no partner of the defendant firm stepped into the witness box.
In "Bharat Barrel & Drum Mfg. Co. v. Amin Chand Pyarelal, (1999) 3 SCC 35", the Supreme Court held that once execution of negotiable instrument is proved, the burden shifts to the defendant to rebut the presumption of consideration. The defendants have failed to rebut the presumption arising from the cheques and acknowledged liability.
So far as the case law relied upon by the defendant are concerned, though they hold the correct proposition of law, but respectfully distinguish from the facts and circumstances of this case and no help to the defendants defendant have relied upon Rohini Strips Ltd. v. Steel Authority of India is distinguishable.
CS (COMM) 703/2022 Himanshu Sharma Vs M/s Ray of Abundantia & Ors Page No.29/36That case dealt with limitation from dishonour of cheque. Here, the suit was e-filed within three years from the dishonour dated 19.07.2019, and the plaintiff also relies on written acknowledgment, part payments and fresh cheques.
"Shakti Bhog Food Industries Ltd (Supra)" does not assist the defendant. It only states that limitation cannot be extended by mere correspondence. The present case is not based on mere correspondence but on acknowledgment, part payment and cheques.
"Scholar Publishing House Pvt. Ltd (Supra)" is distinguishable because in the present case the arbitral forum contemplated under the invoices is, on the testimony of DW-1 itself, unavailable to non-members. Further, the Order VII Rule 11 objection already stood dismissed and attained finality.
"Srinivas Raghavendrao Desai (Supra)" on evidence beyond pleadings does not help the defendants. The plaintiff's core case of supply, acknowledgment, cheques, dishonour and non-payment is specifically pleaded. The WhatsApp communication, even if kept aside, is not the foundation of the decree; it is merely corroborative.
"Dhanbad Fuels Pvt. Ltd. (Supra)" does not assist the defendants, because an exemption application had already been allowed on 28.09.2022, urgent interim relief was sought, and the said order attained finality.
24. In view of the forgoing discussion and on a cumulative appreciation of pleadings, documentary evidence and oral CS (COMM) 703/2022 Himanshu Sharma Vs M/s Ray of Abundantia & Ors Page No.30/36 testimony, this Court finds that the plaintiff has proved:
Firstly, supply of goods under invoices by the plaintiff. Secondly, acknowledgment of liability by the defendants. Thirdly, issuance of cheques by the defendants. Fourthly, dishonour of cheques on presentation. Fifthly, part payment to the plaintiff made by defendants. Sixthly, failure to prove defective goods. Sevently, failure of defendants to rebut the plaintiff's documentary evidence.
The defendants' objections are either barred by finality of prior orders, unsupported by pleadings/evidence, or contrary to the record. The defence is therefore found to be evasive, unsubstantiated and insufficient to defeat the plaintiff's claim.
Accordingly, issue No. 3 is decided in favour of the plaintiff and against the defendants. The plaintiff is held entitled to a decree for Rs.36,04,742/- against the defendants.
Issue No.4: Whether the plaintiff is entitled for interest on the decretal amount, pendente lite and future, if yes, then at what rate? OPP
25. The onus to prove this issue was upon the plaintiff. In view of the findings returned on Issue No.3, this Court has already held that the plaintiff successfully proved the commercial transactions between the parties, supply of goods, acknowledgment of liability, issuance of cheques, dishonour thereof and subsisting liability of the defendants towards the plaintiff. Consequently, the plaintiff becomes entitled to interest on the decretal amount.
The plaintiff has claimed interest @ 18% per annum on the CS (COMM) 703/2022 Himanshu Sharma Vs M/s Ray of Abundantia & Ors Page No.31/36 ground that the transactions between the parties were commercial in nature and the defendants had wrongfully withheld the payment despite repeated assurances, acknowledgment of liability and issuance of cheques. The invoices relied upon by the plaintiff also indicate that the dealings were purely commercial transactions between businessmen.
26. At this stage, it would be apposite to refer to Section 34 of the Code of Civil Procedure, 1908, which reads as under:
"34. Interest.--(1) Where and insofar 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 contractual 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."
The proviso to Section 34 of CPC specifically recognizes a distinction between ordinary civil transactions and commercial transactions. Once the transaction is commercial in nature, the Court is empowered to grant higher reasonable commercial interest.
27. In the present matter, the transactions pertain to supply of Grey Fabrics in the course of business dealings between the parties. The defendants not only received the goods but repeatedly acknowledged their liability, issued cheques and even CS (COMM) 703/2022 Himanshu Sharma Vs M/s Ray of Abundantia & Ors Page No.32/36 replaced earlier cheques with fresh cheques. Despite this, the defendants failed to honour their commitment. The conduct of the defendants clearly reflects unjustified withholding of legitimate commercial dues. In "Central Bank of India v. Ravindra, (2002) 1 SCC 367", the Hon'ble Supreme Court held that award of interest is essentially compensatory in nature and intended to recompense a party deprived of the use of money legitimately due to it. In "Hyder Consulting (UK) Ltd. v. Governor, State of Orissa, (2015) 2 SCC 189", the Hon'ble Supreme Court reiterated that interest represents compensation for deprivation of use of money.
Though the plaintiff has claimed interest @ 18% per annum, this Court is of the considered opinion that the said rate appears to be on the higher side in the facts and circumstances of the present case, particularly when no independently proved written contract stipulating 18% interest has been brought on record. However, considering the commercial nature of the transaction, prolonged withholding of admitted dues, issuance and dishonour of cheques, and the conduct of the defendants, grant of reasonable commercial interest is fully justified.
Accordingly, this Court deems it appropriate to award Pendente lite interest @ 9% per annum on the principal decretal amount of Rs.23,40,742/- from the date of institution of the suit till the date of decree and future interest @ 6 % per annum from the date of decree till realization.
The issue no.4 is therefore, decided accordingly in favour of the plaintiff and against the defendants.
CS (COMM) 703/2022 Himanshu Sharma Vs M/s Ray of Abundantia & Ors Page No.33/36Issue No.5: Whether the plaintiff is also entitled to cost of the suit? OPP
28. The plaintiff has been compelled to institute the present commercial suit due to failure of the defendants to discharge admitted commercial liability. The record demonstrates that despite acknowledgment of liability, issuance of cheques, part payments and repeated assurances, the defendants failed to make payment.
The defence raised by the defendants has substantially remained unsupported by evidence. No partner of the defendant firm entered the witness box. No documentary evidence regarding alleged defective goods, rejection, adjustment or discharge was proved. Even the objections regarding arbitration, Section 12A and limitation were either already adjudicated earlier by the learned predecessor or were contrary to the record itself.
The Commercial Courts Act, 2015 was enacted with the object of ensuring speedy and efficient adjudication of commercial disputes and discouraging frivolous and dilatory defences.
Section 35 of CPC, as amended in its application to commercial disputes, emphasizes realistic costs. The provision reads:"35. Costs - (1) In relation to any commercial dispute, the Court, notwithstanding anything contained in any other law for the time being in force or Rule, has the discretion to determine (a) whether costs are payable by one party to another, (b) the quantum of those costs; and (c) when they are to be paid. (2) If the Court decides to make an order for payment of costs, the general rule is that the unsuccessful party shall pay the costs of the CS (COMM) 703/2022 Himanshu Sharma Vs M/s Ray of Abundantia & Ors Page No.34/36 successful party."
The Hon'ble Supreme Court in "Salem Advocate Bar Association v. Union of India, AIR 2005 SC 3353", emphasized that realistic costs should ordinarily follow the event so as to discourage frivolous litigation and unnecessary prolongation of proceedings.
Similarly, in "Sanjeev Kumar Jain v. Raghubir Saran Charitable Trust Civil Appeal No. 8610/2010 (SLP (c) No. 6285 of 2010)", the Hon'ble Supreme Court reiterated that actual and reasonable litigation costs should be awarded.
In the present case, the defendants compelled the plaintiff to litigate despite admitted commercial transactions and issuance of cheques. The plaintiff was constrained to pursue both NI Act proceedings as well as the present commercial recovery proceedings.
Accordingly, the plaintiff is held entitled to costs of the suit including court fees and reasonable litigation expenses.
The issue is decided in favour of the plaintiff.
Issue No.6: Relief
29. In view of the findings returned on Issues No. (iii), (iv) and
(v), the suit of the plaintiff deserves to be decreed.
Accordingly, the present suit is decreed in favour of the plaintiff and against the defendants jointly and severally for a sum of Rs. 23,40,742/- (Rupees Twenty Three Lakhs Forty Thousand Seven Hundred Forty Two Only). The plaintiff is further held entitled to pendente lite interest @ 9% per annum on the decretal CS (COMM) 703/2022 Himanshu Sharma Vs M/s Ray of Abundantia & Ors Page No.35/36 amount from the date of institution of the suit till the date of decree and future interest @ 6% per annum from the date of decree till realization.
The plaintiff shall also be entitled to costs of the suit including court fees and reasonable litigation expenses.
Decree sheet be prepared accordingly.
File be consigned to Record Room after due compliance.
Digitally signedlalit by lalit kumar Date: kumar 2026.05.14 17:17:18 +0530 Announced & dictated in the (LALIT KUMAR) open Court on this District Judge 14th May, 2026 (Commercial Court-02) South-East, Saket Courts, ND 14.05.2026 CS (COMM) 703/2022 Himanshu Sharma Vs M/s Ray of Abundantia & Ors Page No.36/36