Delhi District Court
Sh Govind Narayan Kothari Prop. M/S ... vs B.E. Contracts Private Limited And Ors on 19 February, 2025
IN THE COURT OF MS. RAVINDER BEDI
DISTRICT JUDGE (COMMERCIAL COURT)-12
CENTRAL DISTRICT, TIS HAZARI COURTS, DELHI.
In the matter of:-
CS (COMM) No.174/23
Sh. Govind Narayan Kothari,
Proprietor of M/s Prime Engineering Co.
Registered Office : 1541/D-10,
Ist Floor, Bhagirath Palace, Chandni Chowk,
Delhi-110006
... PLAINTIFF
Vs.
B.E. Contracts Private Limited
through its Managing Director,
11-C, Vandana 11 Tolstoy Marg,
New Delhi-110001.
... DEFENDANT
Date of institution of suit : 28.01.2023
Date of final arguments : 30.01.2025
Date of final order : 19.02.2025
Appearance:-
Plaintiff is represented by Adv. Mr. Tej Pratap Singh.
Defendant is represented by Advocates Mr. Anil Kumar Hajelay and
Mr. Anant Kumar Hajelay.
Digitally signed
RAVINDER by RAVINDER
BEDI
BEDI Date: 2025.02.19
17:11:12 +0530
Sh. Govind Narayan Kothari, vs. B.E. Contracts P. Limited
CS (COMM) 174/2023 Page no. 1/ 29
JUDGMENT
1. Present is a suit instituted by plaintiff seeking recovery of Rs. 4,62,260.94/- alongwith interest pendente-lite and future against the defendant.
2. It is noticeable that by Order dated 09.12.2023 passed by ld. Predecessor, the application of Plaintiff under Order 12 Rule 6 CPC was allowed and suit was partly decreed for an amount of Rs. 6,11,787.23/-. By the same Order, Defendant no.2 to 5, the Directors of the Defendant no.1 company were deleted from array of parties.
3. The suit now is contested by parties in respect of remaining balance amount of Rs. 4,62,260.94/- against the Defendant.
4. Plaintiff moved an application under Order 6 Rule 17 r/w Section-151 CPC seeking amendment in the Cause Title of the suit, which mentioned the same earlier as ' M/s Prime Engineering through its Proprietor '.
5. By the Order dated 09.04.2024 of Ld. Predecessor, the Cause Title stood amended as " Sh. Govind Narayan Kothari, Proprietor of M/s Prime Engineering Co. Vs. B.E. Contracts Private Limited" . But Digitally signed by RAVINDER RAVINDER BEDI BEDI Date: 2025.02.19 17:11:20 +0530 Sh. Govind Narayan Kothari, vs. B.E. Contracts P. Limited CS (COMM) 174/2023 Page no. 2/ 29 it seems the Plaintiff despite deletion of names of Defendant no. 2 to 5, did not amend his plaint by deleting averments in respect of Defendant no.2 to 5, while praying for the recovery against Defendant Company only.
6. It would be apposite to take notice of the material facts as mentioned in the plaint.
● Plaintiff is a Proprietorship Firm and is carrying on its business of trading of electrical goods namely electrical Control Panel Board Accessories and related items inclusive of MCB Channels, switchgears, cables, lugs, wires and insulating materials across India. Mr. Vivek Nath Kothari is duly authorized by the Proprietor Mr. Govind Narayan Kothari, vide power of attorney dated 10.05.2019 to file the present suit.
● Defendant is a Company operating from Tolstoy Marg, New Delhi as per Ministry of Corporate Affairs (Govt. Of India) portal details. Plaint avers that Defendant no.2 to 5, the Directors of Defendant no.1 had approached the Plaintiff at Plaintiff's office at Chandni Chowk, Delhi for purchase of electrical goods and accessories (hereinafter as goods) to be utilized in the Defendant's business. After negotiations between parties, Defendant placed Orders upon Digitally signed RAVINDER by RAVINDER BEDI BEDI Date: 2025.02.19 17:11:27 +0530 Sh. Govind Narayan Kothari, vs. B.E. Contracts P. Limited CS (COMM) 174/2023 Page no. 3/ 29 the Plaintiff. It was agreed by Defendants that they would adhere to the terms of payments as per the Invoices raised by Plaintiff.
● As on 01.04.2017, the Statement of Ledger accounts of Plaintiff maintained in the name of Defendant would show an opening debit balance of Rs.23,37,891/- payable by Defendant. After deduction of various part payments received from Defendant, Defendant is liable to pay the outstanding amount of Rs.10,74,048.17/- to the Plaintiff. Plaintiff had supplied the electrical goods to Defendant, which were duly received by Defendant as per Orders and detail of such Invoices raised upon Defendant is delineated in para no.6 of the Plaint.
● Plaint avers that out of total outstanding balance, Plaintiff had received part amount of Rs. 24,73,651/- from Defendant with last payment made by Defendant via NEFT on 10.11.2021 and 20.11.2021. In respect of remaining dues, Plaintiff pursued the matter with Defendant and asked for payments. There were telephonic conversations held between parties asking for repayment, but till date Defendant has not paid the amount.
● Plaint avers that the record of purchases made by Defendant is duly entered in the Ledger Account in the name of Defendant along with Invoices / bills, maintained by Plaintiff. The account Digitally signed RAVINDER by RAVINDER BEDI BEDI Date: 2025.02.19 17:11:35 +0530 Sh. Govind Narayan Kothari, vs. B.E. Contracts P. Limited CS (COMM) 174/2023 Page no. 4/ 29 books are made upto date which show a closing debit balance as on 31.03.2022, which is due and payable by Defendant.
● The Plaintiff served a legal Notice of demand dated 10.04.2022 upon the Defendant demanding its outstanding dues. However, the said Notice has gone unresponded.
● Plaintiff approached Pre-Institution Mediation Process as per Section 12 A of The Commercial Courts Act (hereinafter as " The CC Act"). The Defendant did not appear despite service of Notice upon him and the same resulted in the issuance of Non-Starter Report.
● Plaint avers that subject matter of the suit is a "Commercial Dispute", as provided under Section 2(1) (c)(i) of The Commercial Courts Act, 2015.
7. As noticed, during pendency of proceedings, the Defendant admitted its liability to the extent of Rs. 6,11,787.23/- and in view of the categorical admission to that extent, the suit of the Plaintiff was partly decreed for an amount of Rs. 6,11,787.23/-. The suit is only for the remaining amount of Rs. 4,62,260.94/- alongwith interest @ 18% against the Defendant.
Digitally signed by RAVINDER RAVINDER BEDI
BEDI Date: 2025.02.19
17:11:42 +0530
Sh. Govind Narayan Kothari, vs. B.E. Contracts P. Limited CS (COMM) 174/2023 Page no. 5/ 29
8. The Defendant company, B.E. Contracts Pvt. Ltd. resisted the suit by filing certain preliminary objections to the same wherein it was contended inter-alia :-
● the suit was not signed and verified nor the same was supported by the affidavit and Statement of Truth. Mr. Vivek Narayan Kothari had no locus standi to sign and verify the suit and the Power of Attorney filed in the Court was not as per law.
● The opening balance shown by Plaintiff in its book was not shown correctly. Even otherwise, so called opening balance as on 01.04.2017, if any, had become time barred. The Plaintiff had not submitted the details or basis of outstanding balance amount as on 01.04.2017. The ledger account of the Plaintiff was not in accordance with established system of accounting and the entries were not in chronological order, which showed the Plaintiff had manipulated the entries to support the case.
● Plaintiff had deliberately not filed the statement of account for the Financial Year 2015-16 with an intent to hide one entry of cash amount of Rs.4,00,000/- received by Mr. Govind Narayan Kothari from Defendant on 25.05.2016.
Digitally signed
RAVINDER by RAVINDER
BEDI
BEDI Date: 2025.02.19
17:11:49 +0530
Sh. Govind Narayan Kothari, vs. B.E. Contracts P. Limited CS (COMM) 174/2023 Page no. 6/ 29 ● The Defendant repeatedly asked the Plaintiff to reconcile the Statement of Account, but Plaintiff did not come forward for such reconciliation. As per account books maintained by Defendant, a sum of Rs.18,74,127.16/- was the opening balance as on 01.04.2017 and not Rs.23,37,891/- as is projected in the ledger account of Plaintiff.
● The account ledger submitted by Plaintiff was a bogus and manipulated document. The Defendant denied that Plaintiff was approached by Directors of the Defendant. It was further denied that there was any outstanding balance for the Financial Year 2017-22, much less the amount claimed as per ledger of Plaintiff.
● No Legal Notice had been served upon the Directors of Defendant Company. The Defendant thus denied its liability as alleged in the Plaint as also any liability for the claims made by Plaintiff. Rest of the contents of the plaint were also denied by Defendant.
9. Plaintiff filed his Replication on 03.10.2023, wherein he has reiterated the averments made in the plaint and controverted to those in the written statement.
10. It is pertinent to state that the suit was partly decreed by Order dated 09.12.2023. RAVINDER by Digitally signed RAVINDER BEDI BEDI Date: 2025.02.19 17:11:58 +0530 Sh. Govind Narayan Kothari, vs. B.E. Contracts P. Limited CS (COMM) 174/2023 Page no. 7/ 29 By Order dated 09.09.2024, the following issues were settled for adjudication :-
i). Whether Defendant had already paid the entire amount including the payment in cash vide Payment Voucher dated 25.05.2016 of Rs. 4 Lakhs to Plaintiff? OPD
ii). Whether the plaintiff is entitled to the recovery of remaining amount of Rs.4,62,260.94/- (out of total of Rs.10,74,048/- as prayed in the prayer clause of the plaint) OPP.
iii). Whether the plaintiff is entitled to any interest on the above said amount? If so, at what rate and from what period? OPP.
iv). Relief.
11. Plaintiff examined his attorney Mr. Vivek Narayan Kothari as PW-1 who proved on record the documents i.e. GST registration certificate as Ex.PW-1/1 ; Power of attorney dated 10.05.2019 in his favour as Ex.PW-1/2 ; details of Defendant downloaded from website of MCA as Ex.PW-1/3 ; Invoices as Ex.PW-1/4 to Ex.PW-1/41 ; E-way bills dated 27.04.2018 as Ex.PW-1/42 ; E-way bills dated 15.11.2018 as Ex.PW-1/43 ; E-way bills dated 13.12.2018 as Ex.PW-1/44 ; E-way bills dated 19.08.2021 as Ex.PW-1/45 ; E-way bills dated 25.09.2021 as Ex.PW-1/46 ; E-way bills dated 14.10.2021 as Ex.PW-1/47 ; Ledger of Accounts maintained in the name of Defendant as Ex.PW-1/49 ; Legal Notice dated 10.04.2022 sent upon Defendant as Mark-A ; E-mail dated '11.04.2022 at 09.47 AM ' as Ex.PW-1/51 ; Non Starter Report as Ex.PW-1/52 ; Certificate under Section 65-B of Indian Evidence Act, 1872 as Ex.PW-1/B. Digitally signed RAVINDER by RAVINDER BEDI BEDI Date: 2025.02.19 17:12:07 +0530 Sh. Govind Narayan Kothari, vs. B.E. Contracts P. Limited CS (COMM) 174/2023 Page no. 8/ 29
12. Defendant company examined its AR Mr Prakash Chand Joshi as DW-1. The witness proved the Board Resolution dated 27.11.2024 in his favour as Ex.DW-1/1 (filed with Index dated 02.12.2024); Board Resolution dated 29.06.2023 as Ex.DW-1/2 in favour of earlier AR Mr Jitendra ; Payment Voucher dated 25.05.2016 of Rs.4,00,000/- as Ex. DW-1/3 (page no.26 of paperbook) ; Ledger Account of Plaintiff maintained by Defendant for the period 01.11.2009 uptil 31.03.2023 as Ex.DW-1/4 (page no.27 to 86 of paperbook); Certificate under Section-65 B of Indian Evidence Act as Ex. DW1/5 and e-mails as Ex. PW1/D1 (confronted on 18.12.2024).
Defendant filed Additional affidavit evidence dated 21.12.2024 of DW-1 as Ex. DW1/B ; Certificate under Section-65 B of Indian Evidence Act as Ex. DW1/6 and Certificate of Mr Sanjay Gujral as Ex. DW1/7.
Submissions of Counsel for Plaintiff
13. Ld. Counsel for Plaintiff submits that Plaintiff has been successful in proving its claim against the Defendant. He submits that Defendant failed to bring up any evidence in support of his plea of payment made to Plaintiff through Voucher dated 25.05.2016. Ld. Counsel submits that the written statement of Defendant contain bald and flat denials and was not filed as per Order 8 Rule 3A(3) CPC as amended Digitally signed by RAVINDER RAVINDER BEDI BEDI Date: 2025.02.19 17:12:17 +0530 Sh. Govind Narayan Kothari, vs. B.E. Contracts P. Limited CS (COMM) 174/2023 Page no. 9/ 29 by The CC Act. Ld. Counsel refers to adjournments availed by Defendant for cross-examination of PW-1 before Ld. Local Commissioner and the plethora of irrelevant questions asked to witness. He argued that on the basis of frivolous pleas, Defendant continued with the matter and adopted all tactics to delay the proceedings filed under The CC Act, 2015, which mandated the speedy disposal of commercial matters.
14. Referring to the testimony of DW-1, Counsel for Plaintiff submits that the Voucher Ex. DW1/3 relied by Defendant was a forged document as it did not bear signatures of any person and the same was not proved as per the provisions of The Evidence Act in the absence of any supporting document of relevant period i.e. account registers, Diaries containing cash entries, Voucher Register or Statement of Bank Account as per Section 34 of The Evidence Act. Ld. Counsel submits that e-mails Ex. PW1/D1 were introduced by the Defendant only at the stage of Defendant evidence and these were not filed alongwith written statement, nor were part of judicial record. Ld. Counsel submits that the leave of the Court was also not obtained for filing Ex. PW1/D1 in accordance with Order 11 Rule 1 of The CC Act, 2015 and these are only to be ignored.
Submissions of Counsel For Defendant
15. Per contra, ld. Counsel for Defendant while refuting the submissions of Counsel for Plaintiff argued that case of Plaintiff was Digitally signed by RAVINDER RAVINDER BEDI BEDI Date: 2025.02.19 17:12:27 +0530 Sh. Govind Narayan Kothari, vs. B.E. Contracts P. Limited CS (COMM) 174/2023 Page no. 10/ 29 false as PW-1 PW-1 himself deposed that an amount of Rs. 23,37,891/- was not outstanding against Defendant on 01.04.2017. He argued that the Ledger Account of Defendant Ex. PW1/4 showing transactions with Plaintiff from 30.11.2009 till 30.03.2017 had been proved as per law and also showed one cash entry for the payment dated 25.05.2016 of Rs. 04 lakhs through Voucher Ex. DW1/3. He argued that the flow of handwriting and style of initials of name of Plaintiff's Proprietor on Ex. DW1/3 clearly tallied to that of his signatures on Ex.PW1/2.
16. Ld. Counsel for Defendant argued that PW-1 was confronted with documents i.e. e-mail communications as Mark PW1/D1 (colly) during cross-examination and this was the reason why Mark PW1/D1 (colly) were not filed by Defendant with written statement. Ld counsel placed reliance upon Order 11 Rule 1(8) of The CC Act, as per which Rule 1(7) of the Act did not apply to the documents produced or put to PW-1 during cross-examination and thus the documents were admissible in evidence. Reliance was placed upon the Judgment of Hon'ble Apex Court in Mohammed Abdul Wahid versus Nilofer & Anr (DOD as 14.12.2023) to buttress the submissions.
17. Ld. Counsel for Defendant further argued that against the value of Invoices, the Defendant had paid an amount of approx Rs. 12.10 lakhs to the Plaintiff and thus in total, Defendant had paid approx Rs. 24.74 lakh during the period between 01.04.2017 and 20.11.2021, Digitally signed by RAVINDER RAVINDER BEDI BEDI Date: 2025.02.19 17:12:36 +0530 Sh. Govind Narayan Kothari, vs. B.E. Contracts P. Limited CS (COMM) 174/2023 Page no. 11/ 29 meaning thereby, the Defendant overpaid the Plaintiff by approx Rs. 12.64 lakhs. Ld. Counsel submits that the basis of Plaintiff's claim is the opening amount of balance as on 01.04.2017, which is without any calculation and thus raises doubts and that in such a situation, the onus was upon the Plaintiff to clear all doubts by producing the entire ledger i.e. for the years prior to the year 2017 on record.
18. I have heard Ld. Counsel for parties and perused the entire material on record in the light of relevant statutory provisions of law. I have also looked into the case-law relied upon by Defendant and my issue wise findings are as under :
Issue no. 1: Whether Defendant had already paid the entire amount including the payment in cash vide Payment Voucher dated 25.05.2016 of Rs. 4 Lakhs to Plaintiff? OPD
19. The onus to prove this issue was upon the Defendant. The grounds of Defendant taken in the written statement resisting the suit were that the payment of Rs. 4 Lakhs was already made through voucher Ex. DW1/3 ; that the ledger account of the Plaintiff did not show the correct outstanding dues against Defendant, while the Defendant's Ledger Ex. DW1/4 depicted the correct amounts ; that the Defendant had already paid the entire outstanding amount of Rs. 6,11,787.23/- to Plaintiff and nothing was left due to Plaintiff.
Digitally signed
RAVINDER by RAVINDER
BEDI
BEDI Date: 2025.02.19
17:12:44 +0530
Sh. Govind Narayan Kothari, vs. B.E. Contracts P. Limited CS (COMM) 174/2023 Page no. 12/ 29
20. The sole witness of Defendant i.e. DW-1 has been examined in support of defence of Defendant.
21. DW-1 deposed through Affidavits Ex. DW1/A and additional Affidavit Ex. DW1/B and reiterated the facts as taken in the written statement. In cross-examination, DW-1 denied the suggestion that he was not authorized on the basis of Ex.DW1/1 to depose in the absence of any Minutes of Meeting. DW-1 stated that the cash Voucher Ex. DW1/3 was bearing signatures of Mr. Anil Patiyal, Mr Govind Narayan and Mr Sanjay Gujral respectively at point A, B and C. DW-1 in cross- examination further denied the Voucher Ex. DW1/3 as a bogus or fabricated one.
22. DW-1 then stated that except for the E-mail Communications Ex. PW1/D1, he had nothing to show that Defendant had ever called the Plaintiff for reconciliation of accounts due to alleged discrepancies. DW-1 candidly admits that the Defendant did not file anything to show the exorbitant amounts of principal and the interest raised by the Plaintiff. The DW-1 further admits the Legal Notice dated 10.04.2022 Ex. PW1/50 sent by Plaintiff but feigns his ignorance as to whether the Defendant had replied the said Notice.
23. Ld. Counsel for Plaintiff submitted that DW-1 was not authorized by Defendant Company and single page document Ex.DW1/1, Digitally signed by RAVINDER RAVINDER BEDI BEDI Date: 2025.02.19 17:12:53 +0530 Sh. Govind Narayan Kothari, vs. B.E. Contracts P. Limited CS (COMM) 174/2023 Page no. 13/ 29 the purported authority letter was an invalid document. He argued that a cursory glance upon Ex. DW1/1 would suggest that DW-1 was authorized by one Sh. Sanjay Gujral, Director of Defendant and in the absence of any Board Resolution dated 27.11.2024 or Minutes of Meetings, Ex. DW1/1 could not be said to be proved. Counsel submits that the DW-1 was not authorized by the Board of Directors or Minutes of Meeting as required under The Companies Act. He submits that DW-1 failed to bring any document to show that Mr Sanjay Gujral was the Director of the Defendant Company.
24. Ld. Counsel for Defendant submits that as per the language of Order 29 Rule 1 CPC, any Director or Principal Officer of the Company can be authorized to represent the Company. Ld. Counsel argues that DW-1 Mr Prakash Chand Joshi was the Principal Officer and was fully authorized by the Defendant company vide Ex. DW1/1 and thus competent to depose on behalf of Company.
25. As per settled legal position, a Company can sue and be sued in its own name. As per Order 6 Rule 14 CPC, a pleading is required to be signed by the party and its pleader and for a Company, some person has to sign the pleading on its behalf. Reading Order 29 Rule 1 CPC alongwith Order 6 Rule 14 CPC together, a person may be expressly authorized to sign pleadings e.g. by the Board of Directors passing a Resolution to that effect or by a power of attorney being executed in Digitally signed by RAVINDER RAVINDER BEDI BEDI Date: 2025.02.19 17:13:02 +0530 Sh. Govind Narayan Kothari, vs. B.E. Contracts P. Limited CS (COMM) 174/2023 Page no. 14/ 29 favour of that person. Reliance can be placed upon the Judgment of Hon'ble Apex Court in State Bank of Travancore v Kingston Computers (I) P. Ltd. Vs. (2011) 11 SC 524.
26. In the Judgment of Nibro Ltd. vs National Insurance Co. Ltd. (DOD as 6 March, 1990), it was held as :-
" xxx xxx xxx
29. It is well-settled that under section 291 of the Companies Act except where express provision is made that the powers of a Company in respect of a particular matter are to be exercised by the Company in general meeting, in all other cases the board of directors are entitled to exercise all its powers. Individual directors have such powers only as are vested in them by the memorandum and articles. It is true that ordinarily the court will not unsuit a person on account of technicalities. However, the question of authority to institute a suit on behalf of a Company is not a technical matter. It has far-reaching effects. It often affects the policy and finances of the Company. Thus , unless a power to institute a suit is specifically conferred on a particular director, he has no authority to institute a suit on behalf of the Company......."
27. Having mulled over the record, I find that written statement majorly contains bald and flat denials to the suit. It is accompanied by the Statement of Truth signed by Directors of Defendant. The written Digitally signed by RAVINDER RAVINDER BEDI BEDI Date: 2025.02.19 17:13:10 +0530 Sh. Govind Narayan Kothari, vs. B.E. Contracts P. Limited CS (COMM) 174/2023 Page no. 15/ 29 statement nowhere mentions about the status of Defendant entity. It does not mention as to whether the Defendant was a Company, Corporation or an LLP. It does not also mention about whether Company had authorized Mr. Jitendra, earlier AR to file the written statement.
28. The Ex. DW1/1 brought during evidence is signed by Mr Sanjay Gujral, Director of Defendant. There is nothing to infer that Mr Sanjay Gujral was Director of Defendant company at any point of time. There is nothing to even remotely suggest that earlier Mr Jitendra had been conferred with the authority to file the defence or that DW-1 was a competent person conferred with the authority on the strength of Ex. DW1/1 to depose on the facts of the case.
29. Defendant did not chose to summon any witness from the office of Registrar of Companies to prove the existence of Company or its constitution. In the absence of any such evidence of existence of Defendant company, its constitution or any Resolution of Board of Directors or Minutes of Meeting having brought or proved, I hold that the Defendant failed to show that the DW-1 was competent witness on behalf of Defendant to depose and same remained inexplicable.
30. Even otherwise looking into the testimony of DW-1, what is discernible is that Defendant nowhere has explained as to whether the admitted amount of Rs. 6,11,787.23/- also included the cash amount of Digitally signed by RAVINDER RAVINDER BEDI BEDI Date: 2025.02.19 17:13:19 +0530 Sh. Govind Narayan Kothari, vs. B.E. Contracts P. Limited CS (COMM) 174/2023 Page no. 16/ 29 Rs. 4 lakhs through voucher. It is not in dispute that the Defendant's version in respect of its liability was based upon the same very ledger of Plaintiff Ex. PW1/ 49 filed by Plaintiff and based upon which suit of Plaintiff was partly decreed on the admission of Defendant. There was no denial or dispute raised to the Ex. PW1/49 at that time, the onus was upon the Defendant to bring evidence to suggest or prove the falsity of the alleged manipulated and false document i.e. ledger of Plaintiff Ex. PW1/49.
31. Once having admitted part liability based upon the ledger Ex. PW1/49, the initial burden was upon the Defendant to establish that it had no further liability left and that it had paid the remaining amount of Rs. 4 lakh also by way of a voucher Ex. DW1/3.
32. While denying the Ex. PW1/49, Defendant relied upon its own statement of ledger account Ex. DW1/4 (page no. 27 to 80 on record).
The Ex. DW1/4 relates to the entries running from 30.11.2009 uptill 30.03.2017 in respect of Plaintiff's transactions. A careful perusal of the same would indicate that firstly, the Ex. DW1/4 does not contain any entry of payments in 'cash' except the entry in question i.e. 25.05.2016 (at page no. 75) and thus makes the account Ex. DW1/4 highly doubtful and raises question of its correctness. It highly improbablizes the fact that Defendant company would have only one Digitally signed by RAVINDER RAVINDER BEDI BEDI Date: 2025.02.19 17:13:26 +0530 Sh. Govind Narayan Kothari, vs. B.E. Contracts P. Limited CS (COMM) 174/2023 Page no. 17/ 29 transaction with Plaintiff in cash. Ex. DW1/4 shows that the Defendant never had done any cash transactions with Plaintiff, then how one entry reflected the payment in 'cash' to Plaintiff. The same remained inexplicable and thus has created a grave suspicion over the genuineness of ledger account Ex. DW1/4 itself.
33. Secondly, Ex. DW1/4 is not supported or corroborated by any bank account, voucher book, daily cash books of Roznama, account book registers or Income Tax records for the relevant period. The supporting document i.e. Ex. DW1/4 by itself is not the proof of transactions.
34. It is settled law that a ledger is not the proof of transaction and no liability can be fastened on the basis of entries in the ledger alone, unless it is corroborated by some other evidence. In Jay Ambe Industries Proprietor Shri Dinesh Kumar Bajranglal Somani Vs. Garnet Speciality Paper Ltd. 2002 SCC Online Guj 2258, it was held as :
" 25. The proposition laid down in authorities about the admissibility of ledger without the corroborative evidence being led in support of the entries in the ledger cannot be disputed. It is well settled that a ledger, though an account book, has no evidentiary value unless the entries made therein are proved by independent evidence which, in other words, would mean that there must be corroboration of entries Digitally signed by RAVINDER RAVINDER BEDI BEDI Date: 2025.02.19 17:13:33 +0530 Sh. Govind Narayan Kothari, vs. B.E. Contracts P. Limited CS (COMM) 174/2023 Page no. 18/ 29 which corroboration can be supplied by proving the transaction or by proving the entries in the Daily Cash book of Roznama. Without corroboration, entries in the ledger cannot be brought within the purview of section 34 of the Evidence Act."
Reliance may be further placed upon the decisions in the matter of 'Harish Mansukhani Vs. Ashok Jain (DOD as 19.11.2008 by DB of Hon'ble Delhi High Court) and Civil Appeal before Apex Court as 664/2012 titled as Ashok Jain V. Harish Mansukhani (DOD as 03.09.2019), wherein it was held that plaintiff had only produced ledger account and that by itself could not be a proof of payments to the opposite party.
35. In "M/s. J.K. Synthetic Ltd. versus M/s. Dynamic Cement Traders, it was held as :
"6. xxx xxx xxx In view of Section 34 of Indian Evidence Act, 1872, a mere entry in the statement of account is not sufficient to fasten any liability and the entries in the statement of account have to be proved by means of the documents/vouchers of the transaction. ....."
36. Hon'ble Supreme Court in Central Bureau of Investigation Vs. V.C. Shukla & Ors. (1998) 3 SCC 410 observed that Section 34 of Indian Evidence Act is in two parts. The first part speaks of relevancy of Digitally signed by RAVINDER RAVINDER BEDI BEDI Date: 2025.02.19 17:13:41 +0530 Sh. Govind Narayan Kothari, vs. B.E. Contracts P. Limited CS (COMM) 174/2023 Page no. 19/ 29 the entries in evidence, once the books of accounts are shown to be regularly kept in the course of business. Second aspect is that even if it is proved that the statements of accounts are regularly kept in course of business, yet, the statement of account/entry alone is not sufficient evidence to discharge the onus. It was observed that mere entries should not be sufficient to fasten the monetary liability upon other side, unless other documents of transaction are filed and exhibited in support of the entries made.
The Voucher Ex. DW1/3 is a stray document without any signatures of Plaintiff or its employee. It is unclear as to who has raised the Ex. DW1/3 and it does not bear signatures of its author. The same is unsupported by any record for the relevant time and thus has to be rejected only as a manufactured document to produce by Defendant on record.
37. As observed, the Defendant did not come up with any evidence in the form of statement of bank accounts, Balance sheets, Income Tax Returns , Daily cash book of roznama or Account book registers etc while denying its liability in respect of payment of Rs.4,00,000/- ; the plea of Defendant that it had paid the amount of Rs.4,00,000/- to Plaintiff pales into insignificance.
Such documents were in possession of Defendant only and which could have thrown light in respect of payment made to Plaintiff. Thus, an adverse inference is drawn that had the Defendant brought them Digitally signed by RAVINDER RAVINDER BEDI BEDI Date: 2025.02.19 17:13:48 +0530 Sh. Govind Narayan Kothari, vs. B.E. Contracts P. Limited CS (COMM) 174/2023 Page no. 20/ 29 on record, these would have contradicted his own version.
In the Judgment of Hon'ble Delhi High Court in Shalu v Sandeep Soni (DOD as 03.02.2016) it was held that :
" 32. It is well settled that irrespective of the onus or the burden of proof, a party in possession of the best evidence, is bound to produce the same on record. In this regard, we may advert to the pronouncement of the Privy Council reported at AIR 1917 PC 6 T.S. Murugesam Pillai v. Manickavasaka Pandara which reads as follows:
"A practice has grown up in Indian procedure of those in possession of important documents or information lying by, trusting to the abstract doctrine of the onus of proof and failing accordingly to furnish to the Courts the best material for its decision. With regard to third parties, this may be right enough: they have no responsibility for the conduct of suit; but with regard to the parties to the suit it is, in their Lordships' opinion, an inversion of sound practice for those desiring to rely upon a certain state of facts to withhold from the Court the written evidence in their possession which would throw light upon the proposition."
This was further reiterated by the Hon'ble Supreme Court in Gopal Krishna Ketkar v. Mohamed Haji Latif, AIR 1968 SC 1413, wherein it was held thus:
"Even if the burden of proof does not lie on a party the Court may draw an adverse inference if he withholds important documents in his possession which can throw Digitally signed by RAVINDER RAVINDER BEDI BEDI Date: 2025.02.19 17:13:59 +0530 Sh. Govind Narayan Kothari, vs. B.E. Contracts P. Limited CS (COMM) 174/2023 Page no. 21/ 29 light on the facts at issue. It is not, in our opinion, a sound practice for those desiring to rely upon a certain state of facts to withhold from the Court the best evidence which is in their possession which could throw light upon the issues in controversy...."
38. The Defendant further failed to establish that it had overpaid the plaintiff or that the Plaintiff had raised exorbitant amounts against Invoices since DW1 admitted in evidence that Defendant had not brought any such thing on record.
39. As to the non-filing of documents Ex. PW1/D1 alongwith written statement by Defendant, an attempt was made by Defendant to place these by confronting them to PW-1 in evidence. The Judgment of Abdul Wahid (supra) rendered by Hon'ble Apex Court was relied upon by the Defendant.
40. I find that the reliance placed upon Abdul Wahid (supra) is completely misplaced one. In the said Judgment, Hon'ble Apex Court was dealing with two issues i.e. Whether there was any difference between 'a party to a suit as a witness' and a 'witness simplicitor ' and secondly, whether the production of documents for both i.e. 'a party to the suit and a witness', at the stage of cross-examination was permissible within law. Hon'ble Apex Court held that there was no difference between 'a party to a suit as a witness ' and 'a witness simplicitor . To the second issue, Hon'ble Apex Court observed as a result of first issue that Digitally signed by RAVINDER RAVINDER BEDI BEDI Date: 2025.02.19 17:14:06 +0530 Sh. Govind Narayan Kothari, vs. B.E. Contracts P. Limited CS (COMM) 174/2023 Page no. 22/ 29 the production of documents was permissible for both, a party to the suit and a witness as a case may be under law.
41. The said observations have no relevancy to the factual matrix in hand, where the documents relied upon were not filed by the Defendant with written statement or at any stage of proceedings. These were sought to be proved on record by confronting these to PW-1 at evidence stage. The Defendant did not obtain leave of Court to file them and thus these documents are only to be eschewed from consideration. Reliance can be placed upon decisions of Bela Creation Pvt Ltd vs Anuj Textiles (DOD as 2 May, 2022) and "Casa 2 Stays Pvt. Ltd. Vs. VLCC Personal Care Ltd. (Decided on : 05-07-2024)" of Hon'ble High Court of Delhi.
42. Further, the Index with list of documents filed on 01.07.2023 by Defendant did not refer to these documents i.e. Ex. PW1/D1 therein, nor these were mentioned in the written statement. In the absence of any averment to the effect that the Declaration contained in the Statement of Truth with the written statement was not correct, the Defendant could not have placed these documents and travel beyond the pleadings. Without being filed at appropriate stage as per the provisions of The CC Act, 2015, Ex. PW1/D1 are only to be taken off the record and cannot be read in evidence.
Digitally signed by RAVINDER RAVINDER BEDI BEDI Date: 2025.02.19 17:14:15 +0530
Sh. Govind Narayan Kothari, vs. B.E. Contracts P. Limited CS (COMM) 174/2023 Page no. 23/ 29
43. I hold that Defendant failed to prove that it had already made payment including payment of Rs. 4 lakhs. The plea of Defendant that the ledger accounts of Plaintiff were incorrect and with wrong entries has also fallen flat in the absence of any evidence. Having held thus, the Issue no.1 is answered against the Defendant and in favour of Plaintiff.
Issue no. 2 . Whether the plaintiff is entitled to the recovery of remaining amount of Rs.4,62,260.94/- (out of total of Rs.10,74,048/- as prayed in the prayer clause of the plaint) OPP.
Issue no. 3 . Whether the plaintiff is entitled to any interest on the above said amount? If so, at what rate and from what period? OPP.
44. The case of Plaintiff was that Defendant was liable to pay an amount of Rs. 10,74,048.17/- after deduction of all part payments made by Defendant for the financial years 2017-2022.
45. Plaintiff examined Mr Vivek Narayan Kothari as PW-1 who deposed that out of the said amount of Rs. 10,74,048.17/- , Defendant admitted to the amount of Rs. 6,11,787.23/- and the same was part decreed by this Court. PW-1 deposed that the suit was left only for the remaining dues of Rs. 4,62,260.94/- payable by Defendant. PW-1 referred to the transactions between parties on regular debit and credit basis, details of which are mentioned in Affidavit Ex. PW1/A. PW-1 has Digitally signed by RAVINDER RAVINDER BEDI BEDI Date: 2025.02.19 17:14:22 +0530 Sh. Govind Narayan Kothari, vs. B.E. Contracts P. Limited CS (COMM) 174/2023 Page no. 24/ 29 proved the Invoices against which the goods were supplied to the Defendant. In his cross-examination, PW-1 reiterated his stand in respect of the balance payments and denied that there was a debit balance of Rs. 18,74,127.16/- as on 01.04.2017.
Record shows that PW-1 was cross-examined on multiple dates and most of the cross-examination by Defendant centered around irrelevant questions put by Defendant to the witness. The documents i.e. Ex.PW1/D1 therefore, sought to be introduced in cross-examination of PW-1 cannot be considered in evidence as already held in view of my findings in Issue no.1.
46. I hold that Plaintiff has successfully proved its case in respect of the outstanding remaining balance against the Defendant. The plea of the Defendant that the amounts were time barred is also found untenable in view of the fact that the last payments given by the Defendant on 10.11.2021 and 20.11.2021, credited to the accounts of Plaintiff have not been denied. The entire story of Defendant in written statment in respect of payment of Rs. 4 lakhs vide Voucher Ex. DW1/3 and the claimed amounts being time barred therefore are Defendant's own figment of imagination.
47. Ld. Counsel for Plaintiff argued that an adverse inference could be drawn against Defendant as the Defendant failed to file reply to the Digitally signed by RAVINDER RAVINDER BEDI BEDI Date: 2025.02.19 17:14:29 +0530 Sh. Govind Narayan Kothari, vs. B.E. Contracts P. Limited CS (COMM) 174/2023 Page no. 25/ 29 Legal Notice Ex. PW1/11 nor had refuted the averments of demand of amount based upon Invoices.
48. Plaintiff has established the factum of service of Notice upon Defendant. The DW-1 in his testimony admitted the receipt of the Notice by Defendant.
In Kalu Ram Vs. Sita Ram, 1980 RLR (Note) 44, it is held that where the plaintiff before filing a suit makes serious assertions in a notice to the defendant, the defendant must not remain silent by ignoring reply. If he does so, an adverse inference for the same may be drawn against him. Similar is the observation of Hon'ble Delhi High Court in Metropolis Travels & Resorts (I) Pvt. Ltd. Vs. Sumit Kalra & Anr. (DOD as 07.05.2002) and upon Dharampal Arora (Shri) Vs. M/s. Share Tips & Ors (DOD as 22.03.2010).
49. Thus an adverse inference has to be drawn against Defendant that after receipt of Legal Notice, it had nothing to say in Reply by refuting the contents of such Notice.
50. It is noteworthy to mention that the Defendant despite knowing that he had no defense to the claims raised by Plaintiff, still continued to contest the matter with an intent to delay the claims filed under the CC Act and attempted to thwart the proceedings, which cannot be countenanced, given the object and purport of the CC Act, 2015.
Digitally signed by
RAVINDER RAVINDER BEDI
BEDI Date: 2025.02.19
17:14:37 +0530
Sh. Govind Narayan Kothari, vs. B.E. Contracts P. Limited CS (COMM) 174/2023 Page no. 26/ 29
51. Plaintiff has proved his entitlement for recovery of amount against the Defendant. The issues are decided in favour of Plaintiff and against Defendant.
INTEREST
52. Plaintiff also claimed an interest @ 18% p.a. on the balance amount of Rs. 4,62,260.94/- from the date of filing of suit till its realization.
Hon'ble Supreme Court in a line of judgments has held that in view of changed economic scenario, there is consistent fall in rates of interest and Courts must in accordance with the changed circumstances grant lesser rates of interest. The same is explained in Rajendra Construction Co. v. Maharashtra Housing & Area Development Authority, (2005) 6 SCC 678, McDermott International Inc. v. Burn Standard Co. Ltd., (2006) 11 SCC 181, Rajasthan State Road Transport Corporation v. Indag Rubber Ltd., (2006) 7 SCC 700, Krishna Bhagya Jala Nigam Ltd. v. G. Harischandra, (2007) 2 SCC 720 & State of Rajasthan v. Ferro Concrete Construction Pvt. Ltd. (2009) 3 Arb. LR 140 (SC).
53. Reliance can further be placed on the decision of M/s Cimmco Ltd v Pramod Krishna Agrawal (DOD as 21.02.2019) of Hon'ble High Court of Delhi, wherein Hon'ble Supreme Court has mandated that lower rates of interest be granted and therefore pendente Digitally signed by RAVINDER RAVINDER BEDI BEDI Date: 2025.02.19 17:14:48 +0530 Sh. Govind Narayan Kothari, vs. B.E. Contracts P. Limited CS (COMM) 174/2023 Page no. 27/ 29 lite and future interest is liable to be reduced by this Court.
54. Plaintiff has not stated from what period, the interest @18% p.a. is sought on the amount and the plaint is silent on this aspect. At the same time, I observe that the transaction in question is a commercial one and keeping in mind the ratio of settled law as above, the interest of justice would be served if Plaintiff be granted an interest on the amount of Rs.4,62,260.94/- at the rate of 12% p.a. from the date of filing of the suit till its realization.
The Plaintiff is granted an interest @12% p.a. on the amount to the Defendant from the date of filing of the suit till its realization.
Both issues are decided in favour of plaintiff and against the Defendant.
RELIEF
55. From the discussion as adumbrated herein-above, the suit of Plaintiff stands decreed in favour of Plaintiff and against Defendant. Plaintiff is entitled for :
(a). a decree for sum of amount of Rs.4,62,260.94/- (Rupees Four Lakhs Sixty Two Thousand Two Hundred Sixty and Ninety Four paise only) against Defendant along-with interest @ 12% p.a. from the date of filing of the suit till its realization.Digitally signed by
RAVINDER RAVINDER BEDI BEDI Date: 2025.02.19 17:14:55 +0530 Sh. Govind Narayan Kothari, vs. B.E. Contracts P. Limited CS (COMM) 174/2023 Page no. 28/ 29
(b). The cost of the suit alongwith pleader's fee in favour of the Plaintiff and against Defendant.
Decree-sheet be prepared subject to the Plaintiff paying the complete Court Fees as per the reliefs granted. File be consigned to Record Room after due compliance.
Digitally signed
RAVINDER by RAVINDER
BEDI
BEDI Date: 2025.02.19
Announced in open Court 17:15:04 +0530
on 19.02.2025 (Ravinder Bedi)
District Judge (Commercial Court)-12
Central District, Tis Hazari Courts Delhi Sh. Govind Narayan Kothari, vs. B.E. Contracts P. Limited CS (COMM) 174/2023 Page no. 29/ 29