Delhi District Court
M/S S.S. Industries vs M/S Biscuit Basket Pvt Ltd on 8 April, 2025
IN THE COURT OF DR. NEERA BHARIHOKE
DISTRICT JUDGE (COMMERCIAL COURT)-06
SOUTH EAST, SAKET COURTS,
NEW DELHI
CNR No. DLSE01-007197-2019
CS DJ 809/2019
M/s S.S Industries,
Through Its Prop.
Sh. Amit Paul
At 40/48, I GF,
C.R. Park,
New Delhi-110019
... Plaintiff
Versus
M/s Biscuit Basket Foods Pvt Ltd,
Through its MD/Director,
At-87-B,
1st Floor Modi Complex,
M.P Nagar Zone-II,
Bhopal-462011(Μ.Ρ)
....Defendant
Date of institution of the suit : 16.09.2019
Date of transfer of the case : 23.11.2022
Date on which judgment was reserved : 18.03.2025
Date of pronouncement of Judgment : 08.04.2025
NEERA
BHARIHOKE
CS DJ 809/19 M/s S.S. Industries Vs. M/s Biscuit Basket Pvt. Ltd. Page 1 of 58 Digitally signed
by NEERA
BHARIHOKE
Date: 2025.04.08
15:52:11 +0530
JUDGMENT
SUIT FOR RECOVERY
1. By way of this judgment, I shall decide the suit of the Plaintiff filed for recovery of Rs.7,73,437/- alongwith interest.
CASE OF THE PLAINTIFF AS SET UP IN THE PLAINT
2. Brief facts of the case as stated by the Plaintiff in the plaint are that:
a) The Plaintiff is carrying on his business under the name and style of M/s S.S Industries as Proprietor and is well conversant with the facts and circumstances of the case and is competent to sign and verify the plaint.
b) The Defendant is Pvt Ltd. Company, and it was customer of the Plaintiff and had been purchasing items/printed premium Rusk wrapper/Labels etc. from the Plaintiff on 7 days credit. The plaintiff raised invoices upon the Defendant for purchased price of the items.
c) The Plaintiff had been maintaining proper books of account reflecting therein the transaction of sale and payment. As on 01.04.2018, as per the Statement of Account, a sum of NEERA BHARIHOKE CS DJ 809/19 M/s S.S. Industries Vs. M/s Biscuit Basket Pvt. Ltd. Page 2 of 58 Digitally signed by NEERA BHARIHOKE Date: 2025.04.08 15:52:17 +0530 Rs.6,11,911.84/- as principal amount was due and payable by the Defendant to the Plaintiff.
d) The Defendant failed to discharge its liability and to pay the due amount to the Plaintiff. Since the Defendant failed to discharge its liability and intentionally and knowingly withheld the due amount, therefore, Defendant was liable to pay the due amount alongwith interest @ 18% P.A.
e) Since then, the Plaintiff had been demanding the due amount from the Defendant, but the Defendant had been avoiding making payment on one pretext or another to the Plaintiff. Thus, the Defendant had neglected and failed to discharge its obligation and pay the due amount to the Plaintiff despite repeated requests & reminders.
f) When the Defendant failed to discharge its obligation, thereafter, the Plaintiff sent legal demand notice on 28.05.2019 vide Speed Post upon the Defendant. Despite the service of the notice, the Defendant failed and neglected to comply with the demand notice and had not made payment of the principal amount or interest or any part of it to the Plaintiff.
NEERA BHARIHOKE Digitally signed CS DJ 809/19 M/s S.S. Industries Vs. M/s Biscuit Basket Pvt. Ltd. Page 3 of 58 by NEERA BHARIHOKE Date: 2025.04.08 15:52:23 +0530
g) A sum of Rs.7,73,437/- was due and payable by the Defendant to the Plaintiff which Defendant had withheld. The details of the due amount are as under:
Principal Amount Rs.6,11,911/-
Interest @ 18% p.a. on Rs.6,11,911/- Rs.1,56,025/-
(Since 01.04.2018 to 31.08.2019)
Notice Charge Rs.5500/-
Total Rs.7,73,437/-
3. The Plaintiff preferred a Pre-litigation/Pre-Institution Mediation before the Competent Authority, i.e. SEDLSA, on 30.05.2019, however Defendant did not appear before the Competent Authority. Furthermore, the Non-Starter Report for the Pre-Institution Mediation was issued by the Competent Authority, SEDLSA, dated 21.08.2019.
4. Hence, the present suit was filed initially before Learned Additional District Judge-06, South-East District, Saket Courts, New Delhi.
5. The Defendant entered appearance through counsel on 22.11.2019 and requested for supplying documents filed with the plaint Direction was given on the same date by learned Additional District Judge/South- East District. to supply the same. On the same day, at joint request, the matter was referred to the Mediation Center to settle the matter amicably.
NEERA BHARIHOKE CS DJ 809/19 M/s S.S. Industries Vs. M/s Biscuit Basket Pvt. Ltd. Page 4 of 58 Digitally signed by NEERA BHARIHOKE Date: 2025.04.08 15:52:29 +0530
6. By virtue of order no. 1 of learned District and Sessions Judge, South-East, Saket Courts, New Delhi pertaining to list of transfer cases, vide order dated 08.01. 2020, the matter was transferred to learned District Judge-02, South-East District, Saket Courts, New Delhi.
7. The matter could not be settled before the Mediation Center. Due to lock-down on account of COVID-19 pandemic, the matter was not physically taken up on 27.03.2020, 26.05.2020 and 16.07.2020 as recorded in order dated 09.09.2020.
8. The matter was taken up through VC on 09.09.2020. On the same day, again at joint request, the matter was referred to the Mediation Center to settle the matter amicably.
9. The matter could not be settled through mediation.
10. An application under Order VII Rule 10 read with Rule 11 CPC was filed by the Defendant by submitting that this court has no jurisdiction to try and entertain the present suit since the suit is barred by law. The other ground taken was that the plant failed to disclose any cause of action and is devoid of territorial jurisdiction. After hearing detailed arguments, the application was rejected vide order dated 06.02.2023 and it was held that the plaint disclosed cause of action and also that the orders had been placed by the Defendant at the office of Plaintiff which is at 40/48, LGF, CR Park, New Delhi-110019 and goods NEERA CS DJ 809/19 M/s S.S. Industries Vs. M/s Biscuit Basket Pvt. Ltd. Page 5 of 58 BHARIHOKE Digitally signed by NEERA BHARIHOKE Date: 2025.04.08 15:52:35 +0530 were also delivered/dispatched to Defendant from above premises and therefore this court has territorial jurisdiction.
11. Written Statement was filed on behalf of Defendant.
CASE OF THE DEFENDANT AS SET UP IN THE WRITTEN STATEMENT
12. Brief facts of the case as stated by the Defendant in the Written Statement are that:
a) The suit deserves to be dismissed at the very outset since as per mandate of Section 20 of the Code of Civil Procedure, 1908, the suit should be instituted where the Defendant or where there are more than one, at the time of commencement of suit, actually and voluntary resides, or carries on business or works for gain or where cause of action, wholly or in part arises. This Court does not have territorial jurisdiction since neither the Defendant is residing or carrying on its business in Delhi nor any cause of action has arisen in Delhi. Defendant is carrying on its business from Bhopal and the registered office of the Defendant is in Bhopal.
b) This Court will have jurisdiction only if the Defendant resides in Delhi or works for gain or carries on business in Delhi or if the cause of action has arisen in Delhi. The submissions of the Plaintiff are incorrect that this Court has territorial jurisdiction NEERA BHARIHOKE CS DJ 809/19 M/s S.S. Industries Vs. M/s Biscuit Basket Pvt. Ltd. Page 6 of 58 Digitally signed by NEERA BHARIHOKE Date: 2025.04.08 15:52:40 +0530 because Registered Office of the Plaintiff is in Delhi, Plaintiff works for gain at Delhi and that as goods were delivered/dispatched to the Defendant from the Plaintiff, which is in Delhi.
c) Averment of the Plaintiff that cause of action has arisen in Delhi as the order was dispatched from Delhi is immaterial for the purpose of ascertaining jurisdiction. The Plaintiff failed to plead any other facts, in the absence of which, it cannot be ascertained whether this Court has jurisdiction or not.
d) Plaintiff is seeking recovery on the premise that despite raising of invoices, the Defendant failed to make payment. As per the documents filed by the Plaintiff, the alleged invoices were sent to Bhopal and payment had to be made from Bhopal. Therefore, the present suit should be filed in Bhopal.
e) In view of the aforesaid facts and submission, plaint filed by the Plaintiff does not disclose any facts to indicate that this Court has jurisdiction to entertain the present Suit. Thus, the Plaint should be returned.
f) The suit has been filed by the Proprietor, Sh. Amit in the name of the Proprietorship firm. Proprietorship firm is not a legal entity and the suit filed in the Proprietorship firm's name is not NEERA BHARIHOKE Digitally signed by NEERA CS DJ 809/19 M/s S.S. Industries Vs. M/s Biscuit Basket Pvt. Ltd. Page 7 of 58 BHARIHOKE Date: 2025.04.08 15:52:49 +0530 maintainable. No document had been placed on record to indicate that Sh. Amit Paul is the sole proprietor of the firm. The stamp of the proprietary firm is also not affixed in the Affidavit/Prayer Clause. In the absence of same, the suit is not properly authorized.
Thus, the suit is not maintainable in its present form and should be dismissed at the very outset.
g) The Defendant had placed an oral order for purchasing premium wrappers/labels with a condition that that the materials would have to be of the following standards:
a. Printing Quality has to be good, neat and clean.
b. The Lamination quality has to be good. It has to be ensured that there is no delamination.
c. Thickness of the lamination (GSM) should be 42-44 microns.
d. The appropriate weight of the wrapping rolls should be 12-14 kg e. The eye-mark printing has to be solid print.
f. Vignette Size has to be same from both ends.
g. The picture placing has to be at the centre.
NEERA BHARIHOKE CS DJ 809/19 M/s S.S. Industries Vs. M/s Biscuit Basket Pvt. Ltd. Page 8 of 58 Digitally signed by NEERA BHARIHOKE Date: 2025.04.08 15:52:57 +0530
h) It was agreed by the parties that if the materials were of an inferior quality then the Plaintiff would be under a mandatory obligation to take the materials back and rectify the default within a reasonable time. Otherwise, the contract would be treated as repudiated and the Defendant would not be liable to make any payment.
i) The materials supplied by the Plaintiff to the Defendant were deficient and sub-standard. The deficiencies are mentioned below:
a. The printing quality was very poor and images on the wrapper were blurred.
b. The Lamination quality was poor. The paper was separating into layers and opening up during the process of sealing.
c. Wrapping rolls were too big and heavy. The appropriate weight should be 12-14 kg. However, the gross weight of the wrapper was 31 kg.
d. The eye-mark was not proper, because of which there was wastage of paper and machine was unable to detect the eye mark and complete the sealing process. As a result the sealing had to be done manually.
e. There were lines in wrapper due to improper drying of ink.
f. Thickness of the lamination (GSM) was uneven. Standard to be maintained should be 42-44 microns. Whereas the wrappers received were of over 55 microns.
NEERA BHARIHOKE CS DJ 809/19 M/s S.S. Industries Vs. M/s Biscuit Basket Pvt. Ltd. Page 9 of 58 Digitally signed by NEERA BHARIHOKE Date: 2025.04.08 15:53:05 +0530 g. Vignette Size was uneven from both ends. Thus, the design image was not as per the sample.
The same is evident from the report prepared by the quality in- charge of the Defendant Company in January 2018.
j) The Defendant examined the materials and immediately informed the Plaintiff that the same were sub-standard and were of an inferior quality through various telephonic calls as well as WhatsApp messages dated 19.01.2018 and 24.01.2018.
k) The Plaintiff admitted the deficiency and further stated that it was a mistake on his part to send the goods to Bhopal. The Plaintiff also gave assurance that he would improve the materials and make the necessary changes. However, the Plaintiff failed to adhere to his assurance. The Plaintiff did not replace the inferior quality materials. The materials supplied thereafter were also of substandard quality.
l) The Plaintiff was again informed through telephonic calls and vide email dated 30.03.2018 about the deficiencies in the materials.
The Plaintiff was also asked to take the materials back. The Plaintiff was also informed that despite being given multiple opportunities, the Plaintiff has failed to improve the quality because of which the Defendant suffered a loss. However, the NEERA BHARIHOKE CS DJ 809/19 M/s S.S. Industries Vs. M/s Biscuit Basket Pvt. Ltd. Page 10 of 58 Digitally signed by NEERA BHARIHOKE Date: 2025.04.08 15:53:14 +0530 Plaintiff did not pay heed to the request of the Defendant and did not take back the materials.
m) At last to mitigate his loss, the Defendant supplied biscuits and rusks to various dealers/traders in the materials supplied by the Plaintiff. However, the biscuits and rusks supplied were returned by his customers/dealers because the same are spoiled because the wrappers were very thick, not proper and of inferior quality because of which it got high moisture content that spoiled the biscuits and rusks. The dealers told the Defendants to take the goods back and return the money. Resultantly, the Defendant suffered huge losses in the market. Details regarding the same are tabulated herein below:
Correspondences Dealers Loss Suffered on account of inferior quality of wrappers 21.04.2018 and Ramdas Sales 5,70,000/- 19.05.2018 Corporation 22.04.2018 and Divyanshi Agency 3,50,000/- 10.05.2018 15.04.2018 and Vindhyachal Trading 4,40,000/- 29.04.2018 Corporation 15.04.2018 and Shree Balaji Bakeries 5,50,000/- 24.04.2018 Ltd.
17.04.2018 and Daksh Enterprises 6,65,000 07.05.2018 18.03.2018 and Freunde International 6,00,000/-
15.04.2018
21.4.2018 MP Traders
Total 31,75,000/-
NEERA
BHARIHOKE
CS DJ 809/19 M/s S.S. Industries Vs. M/s Biscuit Basket Pvt. Ltd. Page 11 of 58
Digitally signed by
NEERA
BHARIHOKE
Date: 2025.04.08
15:53:21 +0530
n) The plaintiff was again reminded about the deficiencies in
materials vide e-mail dated 01.06.2018. The Plaintiff was reminded to take the materials back. The Plaintiff was also informed that the Defendant suffered a loss of approximately Rs.35-45 Lakhs. However, the Plaintiff did not respond to any of the communications.
o) Thus, the Plaintiff had breached the material condition of contract by supplying defective and inferior quality goods. Thus, the contract stands repudiated by virtue of Section 12 of the Sales of Goods Act, 1930. The necessary corollary thereto is that the Plaintiff is not liable to make any payment to the Defendant.
p) Alternatively, the Plaintiff was liable to compensate the Defendant for the damage caused because of the substandard/ deficient materials supplied by it.
q) The suit has been filed in the name of the Proprietorship firm by Sh. Amit Paul. Proprietorship firm is not a legal entity, and the suit filed in the Proprietorship firm's name is not maintainable. No document had been placed on record to indicate that Sh. Amit Paul is the sole proprietor of the firm. In the absence of the same, the suit is not properly authorized and should be dismissed as the suit is not maintainable in its present form.
NEERA BHARIHOKE CS DJ 809/19 M/s S.S. Industries Vs. M/s Biscuit Basket Pvt. Ltd. Page 12 of 58 Digitally signed by NEERA BHARIHOKE Date: 2025.04.08 15:53:27 +0530
r) The Defendant had purchased the materials from the Plaintiff on certain conditions that were verbally agreed upon between the parties.
s) The Plaintiff is not liable to any amount as alleged. On the other hand, it was the Plaintiff who was liable to pay damages to the Defendant on account of loss caused by it.
t) The contents of Notice dated 28.05.2019 are denied.
u) This Court lacks territorial jurisdiction.
REPLICATION OF THE PLAINTIFF
13. Replication has been filed by the Plaintiff, wherein the Plaintiff has denied the contents of the Written Statement and reiterated the contents of the plaint.
FRAMING OF ISSUES
14. Vide order dated 01.12.2023, the exercise of admission/denial of documents on behalf of Defendant was dispensed with since one opportunity granted to the parties had remained unutilized and further adjournment was likely to cause more delay. On the pleadings of the parties, the following issues were framed by my learned Predecessor:-
NEERA BHARIHOKE CS DJ 809/19 M/s S.S. Industries Vs. M/s Biscuit Basket Pvt. Ltd. Page 13 of 58 Digitally signed by NEERA BHARIHOKE Date: 2025.04.08 15:53:33 +0530
1. Whether the suit is bad for want of territorial jurisdiction?
2. Whether the plaintiff is entitled for relief of recovery as prayed? OP Plaintiff.
3. Whether any interest is payable, if any, at what rate? OP Plaintiff.
4. Any other relief.
15. The matter was fixed for Plaintiff's Evidence. Shri Mayank Mikhail Mukherjee was appointed as Learned Local Commissioner for recording of evidence of the parties and the matter was listed for report of learned Local Commissioner and final arguments for 16.01.2024.
16. On 18.12.2023, the matter was taken up on an application of the Defendant filed under Order VIII Rule 1A(3) CPC. By that time the recording of the evidence of the plaintiff stood concluded. The said application filed under Order VIII Rule 1A (3) CPC was dismissed by a detailed order dated 16.01. 2024.
PLAINTIFF'S EVIDENCE
17. Plaintiff examined PW-1 Shri Amit Paul on 08.12. 2023. He presented his evidence by way of affidavit vide Ex. PW-1/A. He reiterated the contents of the plaint and relied upon the following documents: -
NEERA BHARIHOKE CS DJ 809/19 M/s S.S. Industries Vs. M/s Biscuit Basket Pvt. Ltd. Page 14 of 58 Digitally signed by NEERA BHARIHOKE Date: 2025.04.08 15:53:40 +0530 i. Carbon copy of Bill/Invoice No. 206 is Ex.PW-1/1. ii. Copy of consignment slip dated 20.12.2017 is Ex.PW-1/2. iii. Carbon copy of Bill/Invoice No. 263 dated 31.01.2018 is Ex.PW-1/3 iv. Copy of consignment dated 31.01.2018 is Ex.PW-1/4. v. Carbon copy of bill/invoice No.268 dated 01.02.2018 is Ex.PW-1/5.
vi. Carbon copy of bill/invoice no.272 dated 05.02.2018 is Ex.PW-1/6.
vii. Carbon Copy of bill/invoice no.273 dated 06.02.2018 is Ex.PW-1/7.
viii. Carbon Copy of bill/invoice no.292 dated 10.03.2018 is Ex.PW-1/8.
ix. Copy of consignment slip dated 10.03.2018 is Ex.PW-1/9. x. Carbon Copy of bill/invoice no.293 dated 11.03.2018 is Ex.PW-1/10.
xi. Carbon Copy of bill/invoice No.304 dated 31.03.2018 is Ex.PW-1/11.
xii. Carbon Copy of bill/invoice no.311 dated 27.03.2018 is Ex.PW-1/12.
xiii. Carbon Copy of bill/invoice no.333 dated 29.03.2018 is Ex.PW-1/13.
xiv. Carbon Copy of bill/invoice no.342 dated 03.04.2018 is Ex.PW-1/14.
xv. Copy of Ledger Account of Defendant Company maintained by the Plaintiff (total 3 running pages from page no.20-22) is Ex.PW-1/15.
xvi. Copy of legal notice dated 28.05.2019 along with original postal receipts is Ex.PW-1/16 xvii. Certificate under Section 65-B of Indian Evidence is Ex.PW-
1/17.
NEERA BHARIHOKE CS DJ 809/19 M/s S.S. Industries Vs. M/s Biscuit Basket Pvt. Ltd. Page 15 of 58 Digitally signed by NEERA BHARIHOKE Date: 2025.04.08 15:53:46 +0530
18. PW-1 was cross-examined in part on the same day i.e. 08.12.2023 and his remaining cross examination was concluded on 13.12.2023. On the same day, PW-1 Shri Amit Paul was discharged. Plaintiff's Evidence was closed on the same day and the matter was fixed for Defendant's Evidence.
DEFENDANT'S EVIDENCE
19. On 07.05. 2024, the evidence of the defendant was recorded before this Court. Defendant examined DW-1 Shri Ramakant Sarin. He presented his evidence by way of affidavit vide Ex. DW-1/A. He reiterated the contents of the plaint and relied upon the following documents: -
(1) Board Resolution dated 23.01.2020 is Ex.DW-1/1.
(2) Screenshot of whatsapp messages exchanged between Mr. Amit Paul and Ms. Deepali is Ex.DW-1/2. (objected to by Ld. Counsel for the plaintiff that the document did not belong to deponent).
(3) Certificate u/S 65B of Indian Evidence Act given by Ms. Deepali is Ex.DW-1/3. (objected to by Ld. Counsel for the Plaintiff that the document did not belong to deponent).
(4) Screenshot of whatsapp message exchanged between Plaintiff and Deepali on 24.01.2018 is Ex.DW1/4. (objected to by Ld. Counsel for the Plaintiff that the document did not belong to deponent).
NEERA BHARIHOKE CS DJ 809/19 M/s S.S. Industries Vs. M/s Biscuit Basket Pvt. Ltd. Page 16 of 58 Digitally signed by NEERA BHARIHOKE Date: 2025.04.08 15:53:51 +0530 (5) Screenshot of whatsapp message exchanged between Plaintiff and Mr. Ramakant Sarin is Ex.DW-1/5.
(6) Certificate u/S 65B of Indian Evidence Act given by M Ramakant Sarin is Ex.DW-1/6.
(7) Email dated 30.03.2018 exchanged between Defendant is Ex.DW-
1/7.
(8) Letter dated 21.04.2018 sent from Ramdas Sales C11 is Ex.DW-
1/8, (objected to by Ld. Counsel for the pl that the document did not belong to deponent).
(9) Letter dated 19.05.2018 sent from Ramdas Sales Corporation is Ex.DW-1/9. (objected to by Ld. Counsel for the plaintifr that the document did not belong to deponent).
(10) Letter dated 22.04.2018 sent from Divyanshi Agency is Ex.DW-
1/10. (objected to by Ld. Counsel for the Plaintiff that the document did not belong to deponent).
(11) Letter dated 10.05.2018 sent from Divyanshi Agency is Ex.DW-
1/11. (objected to by Ld. Counsel for the Plaintiff that the document did not belong to deponent).
(12) Letter dated 15.04.2018 sent from Vindhyachal Trading Corporation is Ex.DW-1/12. (objected to by Ld. Counsel for the Plaintiff that the document did not belong to deponent).
(13) Letter dated 29.04.2018 sent from Vindhyachal Trading Corporation is Ex.DW-1/13. (objected to by Ld. Counsel for the Plaintiff that the document did not belong to deponent).
NEERA BHARIHOKE CS DJ 809/19 M/s S.S. Industries Vs. M/s Biscuit Basket Pvt. Ltd. Page 17 of 58 Digitally signed by NEERA BHARIHOKE Date:
2025.04.08 15:53:57 +0530 (14) Letter dared 15.04.2018 sent from Shree Balaji Baeries Pvt. Ltd. is Ex.DW-1/14. (objected to by Ld. Counsel for the Plaintiff that the document did not belong to deponent).
(15) Letter dated 24.04.2018 sent from Shree Balaji Baeries Pvt. Ltd. is Ex.DW-1/15. (objected to by Ld. Counsel for the Plaintiff that the document did not belong to deponent).
(16) Letter dated 17.04.2018 sent from Daksh Enterprises is Ex.DW-
1/16. (objected to by Ld. Counsel for the Plaintiff that the document did not belong to deponent).
(17) Letter dated 07.05.2018 sent from Daksh Enterprises is Ex.DW-
1/17. (objected to by Ld. Counsel for the Plaintiff that the document did not belong to deponent).
(18) Letter dated 18.03.2018 sent from Freunde International is Ex.DW-1/18. (objected to by Ld. Counsel for the Plaintiff that the document did not belong to deponent).
(19) Letter dated 15.04.2018 sent from Freunde International is Ex.DW-1/19. (objected to by Ld. Counsel for the Plaintiff that the document did not belong to deponent).
(20) Letter dated 21.04.2018 sent from MP Traders is Ex.DW-1/20.
(objected to by Ld. Counsel for the Plaintiff that the document did not belong to deponent).
(21) Email dated 01.06.2018 exchanged between Plaintiff and Defendant is Ex.DW-1/21.
(22) Screenshot of WhatsApp message dt. 13.10.2018 exchanged between Plaintiff and Defendant is Ex.DW-1/22.
NEERA BHARIHOKE CS DJ 809/19 M/s S.S. Industries Vs. M/s Biscuit Basket Pvt. Ltd. Page 18 of 58 Digitally signed by NEERA BHARIHOKE Date: 2025.04.08 15:54:04 +0530 (23) Quality report of January, 2018 prepared by Defendant is Ex.DW- 1/23.
20. DW-1 was cross examined in part by learned Counsel for Plaintiff on 07.04. 2024 and remaining cross-examination was conducted on 12.08.2024 and on the same day, Defendants' Evidence was closed on the statement of Shri Ramakant Sarin, Authorized Representative of the Defendant.
FINAL ARGUMENTS
21. Learned Counsel for the Plaintiff contended that the Defendant is liable for the payment of the stipulated amount. It was asserted that the Plaintiff had duly maintained the ledger account of the Defendant, Ex.PW-1/15. Additionally, the Plaintiff had served a legal notice dated 28.05.2019 to the Defendant, which was supported by original postal receipts, Ex.PW-1/16 and a Certificate under Section 65-B of the Indian Evidence Act, Ex.PW-1/17. Learned Counsel for Plaintiff argued that despite repeated demands, the Defendant failed to fulfill the payment obligations. Learned Counsel for Plaintiff stated that Plaintiff delivered the materials to the Defendant as per the order and specifications placed by it. He denied that the material supplied by the Plaintiff to the Defendant was not as per the specifications or was of substandard quality. Learned Counsel for the Plaintiff emphasized that the Plaintiff's evidence, supported by the testimony of PW-1 Shri Amit Paul, NEERA BHARIHOKE CS DJ 809/19 M/s S.S. Industries Vs. M/s Biscuit Basket Pvt. Ltd. Page 19 of 58 Digitally signed by NEERA BHARIHOKE Date: 2025.04.08 15:54:11 +0530 substantiated the claims. The cross-examination of PW-1 did not discredit the Plaintiff's case, and the presented documents were sufficient to prove the Defendant's liability for the claimed amount. Therefore, the Plaintiff is entitled to the relief of recovery as prayed. Learned Counsel for the Plaintiff argued that the Defendant has set up a concocted story of Plaintiff having sent defective materials or materials of inferior quality or the goods were not as per the terms and stipulations decided between the parties.
22. Furthermore, the learned Counsel for the Plaintiff argued that the Plaintiff is entitled to interest on the claimed amount. Based on the terms agreed upon and the prevailing legal standards, the Plaintiff is justified in seeking interest at a specified rate until the full payment is made by the Defendant.
23. Per contra, the learned Counsel for the Defendant argued that the present suit is not maintainable having been filed in the name of proprietorship concern. She also argued that Defendant had placed a bulk order for purchasing premium wrappers/labels (materials) with the condition that the material should adhere to certain standards/description which is a material condition. It was also stated that the defendant had placed an oral single purchase order which the Plaintiff chose to deliver in multiple consignments and the defendant explicitly communicated the rejection of the consignments with reasons despite which the plaintiffs chose to keep delivering further consignments of the same purchase NEERA BHARIHOKE CS DJ 809/19 M/s S.S. Industries Vs. M/s Biscuit Basket Pvt. Ltd. Page 20 of 58 Digitally signed by NEERA BHARIHOKE Date: 2025.04.08 15:54:18 +0530 order. Learned counsel for Defendant argued that Plaintiff's claims were unfounded and lacked the necessary original documentary evidence to substantiate them. The Defendant's Counsel highlighted that the Plaintiff failed to produce the original invoices during the examination of PW-1, raising questions about the authenticity and admissibility of the copies presented. It was argued that the Defendant never received the original invoices, and that the Plaintiff has filed photocopies of carbon copies and the same are inadmissible in evidence in absence of producing originals on record.
24. Learned Counsel for the Defendant argued that materials would be deemed to be accepted once the Defendant approves the same. She also argued that Plaintiff supplied goods which were not as for description. The rejection was communicated by the Defendant. The said communication has been accepted by the Plaintiff. It was also argued on behalf of Defendant that contract of sale was not complete. Reliance has been placed on Section 24 of the Sale of Goods Act for the said submission.
25. The learned Counsel for the Defendant also contended that there was no ground for allowing the amount claimed through present suit of the Plaintiff, as the materials sent through the invoices for which the present suit has been filed was defective and not approved by the Defendant and the property in the material never passed to the Defendant and Defendant is therefore, not liable to pay any amount to the Plaintiff. It was also argued that the terms regarding interest were either non-
NEERA BHARIHOKE CS DJ 809/19 M/s S.S. Industries Vs. M/s Biscuit Basket Pvt. Ltd. Page 21 of 58 Digitally signed by NEERA BHARIHOKE Date: 2025.04.08 15:54:24 +0530 existent or not adequately proven by the Plaintiff. Thus, the Defendant should not be held liable for any additional financial burdens beyond what was legitimately owed, if any.
26. In conclusion, the defense argued that the Plaintiff's case was weak and unsubstantiated, and therefore, the court should dismiss the Plaintiff's claims and deny the relief sought.
ISSUE-WISE FINDINGS
27. I have heard the submissions of learned Counsel for the parties and have carefully gone through the record. My issue-wise findings are as under:-
Issue No.1: Whether the suit is bad for want of territorial jurisdiction?
28. This issue does not mention that on whom the onus to prove this issue was placed but from the issue it is clear that the onus to prove issue no. 1 lies on Defendant.
29. The issue stands conclusively decided by the order dated 06.02.2023 whereby it was observed that the orders had been placed by the Defendant at the office of Plaintiff, which is at 40/48, LGF, CR Park, New Delhi-110019 and goods were also delivered/dispatched to Defendant from above premises and therefore this court has territorial NEERA BHARIHOKE CS DJ 809/19 M/s S.S. Industries Vs. M/s Biscuit Basket Pvt. Ltd. Page 22 of 58 Digitally signed by NEERA BHARIHOKE Date: 2025.04.08 15:54:31 +0530 jurisdiction. The said submission was made by the Plaintiff in the plaint which remains unshaken even after cross examination of PW-1. The questions put to PW-1 about place of delivery of material to be Bhopal and PW-1 answering them in affirmative does form a part of cause of action but not the place of complete cause of action. Learned Counsel for Defendant had put a question to PW-1 in his cross-examination about the place where the Plaintiff received the orders from the Defendant and PW-1 replied as:
"The Defendant, Rajan Sarin and his employee have been meeting me at various places such as Starbucks and Cafe Coffee Day all around Delhi NCR such as Vasant Vihar, Ambience Mall, Connaught Place (3 times) for a total of about 20 times. I have also met the Defendant in my car. They would discuss the orders as well as approval of samples."
30. No suggestion was put to PW-1 about making incorrect statements or making any suggestion to PW-1 about no meeting having taken place in South-East Delhi. The above-cited statements of PW-1 support the averments made in plaint about territorial jurisdiction of Court on basis of which the application of the Defendant filed under Order VII Rule 11 CPC already stands dismissed vide order dated 06.02.2023. The order dated 06.02.2023 was never challenged by the Defendant and has achieved finality.
31. Therefore, issue No.1, i.e. 'Whether the suit is bad for want of territorial jurisdiction?' is decided against the Defendant and in NEERA BHARIHOKE CS DJ 809/19 M/s S.S. Industries Vs. M/s Biscuit Basket Pvt. Ltd. Page 23 of 58 Digitally signed by NEERA BHARIHOKE Date: 2025.04.08 15:54:41 +0530 favour of Plaintiff and it is held that this Court has territorial jurisdiction.
Issue No.2 : Whether the Plaintiff is entitled for relief of recovery as prayed?
The onus to prove this issue was on the Plaintiff.
32. The Defendant has taken an objection that the present suit is not maintainable and that suit has to be filed in the name of the proprietor and not in the name of the proprietorship. It has been submitted on behalf of the Defendant that the suit has been filed by the Proprietor, Sh. Amit Paul, in the name of the Proprietorship Firm. It is settled law that a proprietorship firm is not a legal entity and a suit filed in the name of a Proprietorship Firm is not maintainable. It has also been argued by the learned Counsel for Defendant that no document has been placed on record to indicate that Sh. Amit Paul is the sole proprietor of the firm.
33. The learned Counsel for Defendant submitted that even though the Defendant shed clarity on the relevant point of law regarding the maintainability of the suit at the very outset itself in the Written Statement and also during the proceeding of the suit especially cross- examination of PW-1 on 13.12.2023, the Plaintiff did not cure the defect.
34. Learned Counsel for the Defendant argued that a suit can be dismissed at the final stage of proceedings on ground of non- maintainability, and has relied on the observations of Hon'ble High NEERA BHARIHOKE CS DJ 809/19 M/s S.S. Industries Vs. M/s Biscuit Basket Pvt. Ltd. Page 24 of 58 Digitally signed by NEERA BHARIHOKE Date: 2025.04.08 15:54:46 +0530 Court of Delhi in the case of Miraj Marketing Corporation v Vishakha Engineering and Another, 115 (2004) DLT 471 (DB) which read as:
"So far issue No. 4 is concerned, it was held by the learned trial court that the present suit had been brought in the name of M/s. Miraj Marketing Corporation. through one authorised representative Mr. Amitabh Sharma who was not the proprietor and no authority of Mr. Amitabh Sharma was proved on record. Mr. A.K. Pandey, PW-1, filed affidavit by way of evidence wherein he had stated that he was the proprietor of the Plaintiff firm and that the Plaintiff was a sole proprietorship firm. He had not stated in his affidavit that the plaint was signed and verified by him."
"11 It was submitted that the suit was instituted in the name of the proprietorship firm and, therefore, the said suit was not maintainable. The learned trial court also upheld the said contention and dismissed the suit on that score also. Therefore, the aforesaid plea is very relevant and calls for in depth consideration by us. A proprietorship firm has no legal entity like a registered firm. A suit cannot be instituted in the name of an unregistered proprietorship firm and the said suit is to be instituted in the name of the proprietor. It is an admitted position in the plaint that the Plaintiff is a proprietorship firm."
"12 In that view of the matter, we agree with the findings and the conclusions recorded by the trial court that the suit was not instituted by a duly authorized person. Accordingly, we find no infirmity in the judgment and order passed by the learned trial court dismissing the suit on the ground that the suit was not properly instituted."
Objection raised by Defendant: The suit has to be filed in the name of the proprietor and not in the name of the proprietorship.
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35. No issue has been framed in the present suit as regards the suit not having been filed by a duly authorized person. However, the same is being dealt with herewith.
36. The cited judgment has been perused. Hon'ble High Court of Delhi in the case of Miraj Marketing Corporation v Vishakha Engineering and Another,(Supra) upheld the decision of learned trial court because the Plaintiff was described to be a proprietorship firm and represented through Shri Amitabh Sharma. Shri Amitabh Sharma had neither signed the plaint nor he signed the power which was filed in the present case and expressed agreement with the findings and the conclusions recorded by the trial court that the suit was not instituted by a duly authorised person.
37. It has been argued by learned Counsel for the Defendant that the Plaintiff has been filed by a non-juristic entity i.e. M/s S.S. Enterprises through Shri Amit Paul, whereas as per settled legal proposition, in the fitness of things, it should have been mentioned as Shri Amit Paul, Proprietor of M/s S.S. Enterprises. Perusal of this cited judgment shows that the suit was filed by a proprietorship firm through an AR.
38. Evidently, in the present case, the name of the proprietor of the Plaintiff firm is available in the Memo of Parties and as such it cannot be said that the suit is not filed by the proprietor in his name. Mere reference/mention of his firm's name prior to his name does not mean NEERA BHARIHOKE CS DJ 809/19 M/s S.S. Industries Vs. M/s Biscuit Basket Pvt. Ltd. Page 26 of 58 Digitally signed by NEERA BHARIHOKE Date: 2025.04.08 15:54:59 +0530 that suit is not filed by him. The Defendant has also relied on Svapn Constructions vs IDPL Employees Cooperative Group, 127(2006) DLT 80 in support of its submissions that the suit is not maintainable on account of not having been filed in the name of proprietor. Similar objection was taken in the matter titled M/S S.K Agencies vs M/S DFM Foods, ARB.P. 1201/2022, decided on 20 December, 2023 and reliance was placed by the respondent on Svapn Constructions vs IDPL Employees Cooperative Group(Supra). Hon'ble High Court of Delhi rejected the contention of the respondent and observed that:
"18. There is again no merit in the contention of the respondent that the present petition is liable to be dismissed since the petitioner is a sole proprietorship firm. In Svapn Constructions, relied upon by the respondent, it has been held that a sole proprietorship firm does not have any legal status and in case sole proprietorship firm wants to file a suit, it has to be in the name of the proprietor on behalf of the sole proprietorship firm and not in the name of sole proprietorship firm. The said decision is distinguishable inasmuch as in the present case, it has been averred in the petition that Mr.Satyendra Kumar Dixit is the proprietor of the M/s S.K Agencies. The affidavit in support of the petition and statement of truth has been filed by Mr. Satyendra Kumar Dixit. Therefore, the present petition is instituted by Mr. Satyendra Kumar Dixit as the proprietor of M/s. S. K. Agencies".
39. Similar was the observation of Hon'ble Supreme Court in the matter of Rasiklal Manikchand Dhariwal & Anr versus M/s S.S.Food Products, Civil Appeal No. 10112 of 2011, (Arising out of SLP (Civil) No. 27180 of 2008), decided on 25th November 2011, wherein the plaint filed by the Plaintiff described the title of the Plaintiff as "Messrs.
NEERA BHARIHOKE CS DJ 809/19 M/s S.S. Industries Vs. M/s Biscuit Basket Pvt. Ltd. Page 27 of 58 Digitally signed by NEERA BHARIHOKE Date: 2025.04.08 15:55:05 +0530 M.S.S. Food Products, Plot No. D, Sector-E, Sanver Road Industrial Area, Indore, Through - Proprietor - Nilesh Vadhwani, Son of Shri Ashok Vadhwani, aged 27 years, Occupation - Business." It was held by Hon'ble Supreme Court that the description of the Plaintiff in the plaint at best may be called to be not in proper order inasmuch as the name of Nilesh Vadhwani must have preceded the business name in the cause title. This is not an illegality which goes to the root of the matter.
40. RFA no.19/2020, titled M/S.Anil Bearings vs M/S State Motors & Another, decided on 12.02.2010, was filed by the appellant assailing the impugned judgment dated 19.11.2009 passed by the learned Additional District Judge dismissing the suit of the Plaintiff as not maintainable on the ground that the suit was filed by the proprietorship concern, which is not a legal entity. In the suit, the name and description of the Plaintiff was given in the following manner:-
"M/s. Anil Bearings, 633/4, Hamilton Road, Kashmiri Gate, Delhi
- 110006 Through its proprietor Shri Anil Thapar"
41. Hon'ble High Court of Delhi allowed the appeal by observing that that :
"The learned trial court adopted a hyper-technical approach in dismissing the suit, igno ring the fact that at the most it was a case of mis-description of the parties, as was clear from a reading of the plaint in its entirety. Thus, in paragraph 1 of the plaint, it was clearly mentioned that the Plaintiff was a proprietorship establishment and Shri Anil Thapar was the sole proprietor of the Plaintiff establishment, having its office at 633/4, Hamilton Road, Kashmiri Gate, Delhi - 110006. In paragraph 2 of the plaint, it NEERA BHARIHOKE CS DJ 809/19 M/s S.S. Industries Vs. M/s Biscuit Basket Pvt. Ltd. Page 28 of 58 Digitally signed by NEERA BHARIHOKE Date: 2025.04.08 15:55:12 +0530 was elaborated that the suit was being filed by Shri Anil Thapar, who was the proprietor and was well conversant with the facts and circumstances of the case and competent to file, sign and verify the suit and to do all other necessary acts for pursuing the case against the Defendants. Then again, in consonance with the provisions of Order VI Rules 14 and 15 CPC, the plaint was signed and verified by Shri Anil Thapar as Plaintiff and Shri Anil Thapar had also furnished his affidavit in support of the plaint."
42. In the present matter also, the plaint has been signed, verified and instituted by Mr. Amit Paul, the proprietor of the Proprietor firm. Even if Mr. Amit Paul has not filed any document on record to show that he is the proprietor of M/s S.S. Enterprises, the same has not been disputed by the Defendant. During his cross-examination, DW-1 stated that he started dealing with Mr. Amit Paul under the belief that he was proprietor of the Plaintiff, but Mr. Amit Paul had not given him any proof regarding his proprietorship. In the same breath, DW-1 stated that he did not ask Mr. Amit Paul for the proof as in normal circumstances, it was not required. In his whole cross-examination, DW-1 referred to Plaintiff to mean Mr. Amit Paul and not Plaintiff showing that for Defendant, Mr. Amit Paul and Plaintiff meant same entities and not as two different entities.
43. Therefore, the absence of filing any document by Mr. Amit Paul in support of him being proprietor of S.S. Industries is neither fatal to the maintainability of the case nor is it required. Accordingly, the objection of the Defendant about the suit being not maintainable is dismissed.
NEERA BHARIHOKE CS DJ 809/19 M/s S.S. Industries Vs. M/s Biscuit Basket Pvt. Ltd. Page 29 of 58 Digitally signed by NEERA BHARIHOKE Date: 2025.04.08 15:55:18 +0530 Objection raised by Defendant: The invoices have been created by the Plaintiff and Defendant did not receive the invoices.
44. The Defendant has raised an objection that the invoices relied upon by the Plaintiff have not been filed in original and therefore cannot be taken into consideration. Learned Counsel for Defendant submitted that the invoices submitted by the Plaintiff are unilateral documents that have been created by them and were never signed or consented to by the Defendant and stated that the invoices were never signed by the Defendant and it was admitted by the PW-1 in his cross-examination dated 13.12.2023 (Ques. 60). She also submitted that the Plaintiff has failed to put on record any documents to prove that the invoices submitted by them are genuine or that they were delivered to the Defendant. She also stated that in fact in the Plaint at para 3, the Plaintiff stated that he has attached original invoices with the Plaint, which clearly shows that the invoices were never delivered to the Defendant and Plaintiff was in possession of the same.
45. The correct facts are that the Plaintiff has not filed original invoices in the suit though so stated in the plaint. It is well within knowledge of Defendant that Plaintiff has not filed original invoices with the plaint and has placed copy of carbon copies of the same on record.
46. However, there is no requirement for the invoices to have been countersigned by the Defendant for the validity of the invoices.
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47. As regards the exhibiting of these invoices, learned Local Commissioner has specifically recorded in cross-examination of PW-1 dated 13.12 2023 in reference to question no. 57 as below:
"Q 57. Have you got the original invoices?
Ans. No. I have got the carbon copies of the same since the originals have been sent to the Defendant. (Vol. I cannot have the originals since they are required to send the material inter-state) (Local Commissioner note: that the witness today has produced 3 separate Bill Books which contain the carbon copy of Ex. PW-1/1, Ex. PW-1/2, Ex. PW-1/3, Ex. PW-1/4, Ex. PW-1/5, Ex. PW-1/6, Ex. PW-1/7, Ex. PW-1/7, Ex. PW-1/8, Ex. PW-1/9, Ex. PW-1/10, Ex. PW-1/11, Ex. PW-1/12, Ex. PW-1/13 and Ex. PW-1/14. The same has been perused and verified as the same documents are photocopies of which have been filed and exhibited) Q 58. Have you lied on oath that the originals of the invoices were with you?
Ans. I treat the carbon copies as originals."
48. No objection was taken to exhibiting of these invoices by learned Counsel for Defendant and even otherwise, the photocopy of carbon copies of invoices were exhibited after comparing with the Bill Book produced by PW-1.
49. The submission of learned Counsel for Plaintiff that the Defendant did not receive the invoices is belied by the e-mails tendered as exhibits by DW-1 in his examination in chief. The e-mail dated 30.03.2018 of NEERA BHARIHOKE CS DJ 809/19 M/s S.S. Industries Vs. M/s Biscuit Basket Pvt. Ltd. Page 31 of 58 Digitally signed by NEERA BHARIHOKE Date: 2025.04.08 15:55:30 +0530 Defendant sent to the Plaintiff, Ex. DW-1/7 and e-mail dated 01.06.2018 of Defendant sent to the Plaintiff, Ex. DW-1/8 specify in detail the alleged issues in respect to quality of material sent to the Defendant mentioning the specific Bill numbers/invoice numbers and the Plaintiff has filed the present recovery suit which includes these Bills/Invoices. Further, Ex. DW-1/7 and Ex. DW-1/8 have been written after completion of sending of all the consignments by the Plaintiff. Had the Defendant any intention to reject the materials, the same would have been exercised soon after receipt of first or second such consignment. The Defendant has not disputed the contents of the invoices/or the invoices filed by the Plaintiff on record to be different from the ones received by the Defendant.
50. Therefore, the Plaintiff has proved that the invoices for which the present suit has been filed by the Plaintiff which have been filed with the plaint are same as the ones which were delivered to Defendant alongwith materials.
Stand taken by Defendant: It was a Sale by Description and that as per the agreement between the parties, it had been decided that the materials would have to be of the standard agreed upon. Plaintiff and the Defendant had agreed that materials shall only be accepted once the Defendant i.e. Biscuit Basket Foods, to whom materials were supplied approves the quality of the same. Because of rejection of the material by the Defendant, Biscuit Basket, there was no sale as per Section 24 of Sale of Goods Act.
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51. The Defendant has taken a defence that it was a sale by description as stated in Preliminary Submissions in the Written Statement and that as per the agreement between the parties, it had been decided that the materials would have to be of the standard mentioned in para 2 of the preliminary submissions of the Written Statement i.e. "a. Printing Quality has to be good, neat and clean.
b. The Lamination quality has to be good. It has to be ensured that there is no delamination.
c. Thickness of the lamination (GSM) should be 42-44 microns.
d. The appropriate weight of the wrapping rolls should be 12-14 kg e. The eye-mark printing has to be solid print.
f. Vignette Size has to be same from both ends.
g. The picture placing has to be at the centre."
52. In its replication, the Plaintiff has denied existence of any such agreement between the Plaintiff and the Defendant and submitted that initially before placing purchase order, Defendant had asked the Plaintiff to send samples of the goods. The Plaintiff has stated that after receiving the sample, the Defendant appointed one executive at Delhi and under the supervision and after approval of that executive, the goods/materials were sent to the Defendant. The Plaintiff also submitted in the replication that the Defendant continued to purchase material and the NEERA BHARIHOKE CS DJ 809/19 M/s S.S. Industries Vs. M/s Biscuit Basket Pvt. Ltd. Page 33 of 58 Digitally signed by NEERA BHARIHOKE Date: 2025.04.08 15:55:44 +0530 Plaintiff supplied the material to the Defendant as per its order after approval of the executive of the Defendant.
53. The Defendant has submitted that it was agreed by the parties that if the materials were of an inferior quality, then the Plaintiff would be under a mandatory obligation to take the materials back and rectify the default within a reasonable time. Otherwise, the contract would be treated as repudiated, and the Defendant would not be liable to make any payment.
54. PW-1 was cross-examined at length about the submissions made in the written statement and its replication. The relevant part is reproduced below:
"Q 26. How was the quality/size of the materials decided? Ans. Size was given by the Defendant and the quality parameters have also been informed to the Plaintiff by the Defendant.
Q 27. Was it your responsibility to deliver defect free goods to the Defendant?
Ans. Yes."
55. PW-1 admitted that he was doing business with Defendant as late as in January 2018. Prior to this, Ex. PW-1/X/D/2 was put to PW-1 which is part of Ex. PW-1/X/D/3 as can be seen from its contents. It is dated 24 Jan 2018. It reads as(it has many spelling and punctuation errors):
NEERA BHARIHOKE CS DJ 809/19 M/s S.S. Industries Vs. M/s Biscuit Basket Pvt. Ltd. Page 34 of 58 Digitally NEERA signed by BHARIHOKE Date: 2025.04.08 15:55:52 +0530 "Sir, tell me core inside dia & outside dia, most probably it is 3"(inches). It was a trial run to excess col.code. we propose to use in printing. We have detected the % of ink we have to apply on Bopp to get the exact match. which we got finally. But sending of material to Bhopal was a mistake on our part. As per as our lamination we feel it is OK. If not tell us it is heat sealing or not. If NOT, then we have to increase the adhesive & give at least 24 hr to get dry." In Ex. PW-1/D/X3, below this message, it has been written "PL send this massage to sarin sir.pl"
56. On seeing the same, PW-1 stated that he did not remember to have sent this message, but it might be that his staff would have sent it. He admitted that the message was sent by his mobile number. But no question was put to PW-1 as to whom it was sent.
57. PW-1 was put the following question about the material:
"Q 28. Did the Defendant ever write to you regarding deficient quality of material supplied?
Ans. No and never. (Witness is emphatic in his denial).
Witness is confronted with WhatsApp message dated 24.01.2018, Ex. PW-1/X/D3 and asked "Does the reference in WhatsApp message to 'Sarin Sir' refer to Mr. Ramakant Sarin? (Objected by the learned Counsel for Plaintiff for admissibility, relevance and mode of proof) Ans. I do not know."
58. No further question was put to PW-1 about the said document. No inference, adverse or favourable, can therefore be drawn from Ex. PW- 1/X/D/3 or Ex. PW-1/X/D/2.
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59. Section 41 of Sale of Goods Act provides as:
"41. Buyer's right of examining the goods.--
(1) Where goods are delivered to the buyer which he has not previously examined, he is not deemed to have accepted them unless and until he has had a reasonable opportunity of examining them for the purpose of ascertaining whether they are in conformity with the contract.
(2) Unless otherwise agreed, when the seller tenders delivery of goods to the buyer, he is bound, on request, to afford the buyer a reasonable opportunity of examining the goods for the purpose of ascertaining whether they are in conformity with the contract."
60. The Plaintiff has submitted that the material was checked by the executive of Defendant. The questions were put to PW-1 and their respective answers are being reproduced as they are self-speaking:
"Q36. Who sent the final product to the Defendant. What it the third party or was it the Plaintiff?
Ans. I used to send.
Q37. Did you check whether the goods were as per the purchase orders issued by the Defendant before dispatching the goods to Bhopal?
Ans. Yes. I used to check every consignment before dispatch.
Q38. Was Mr. Sarin obligated to make the payments after receipt of goods in Bhopal?
Ans. Yes. NEERA
BHARIHOKE
Digitally signed by
NEERA
BHARIHOKE
Date: 2025.04.08
15:56:06 +0530
CS DJ 809/19 M/s S.S. Industries Vs. M/s Biscuit Basket Pvt. Ltd. Page 36 of 58
Q39. Did Mr. Sarin approve the goods sent by you? Ans. Mr. Ramamkant Sarin had sent certain executives to look after the product and approve the material before sending it to Bhopal.
Q40. Have you placed on record any document to indicate that the goods were approved by the executives? Ans. It is all on verbal basis since a sample of the goods would be shown to the executive and after approval the consignment would be sent. The consignment was large in size so only a sample would be shown.
Q41. Can you name the executive?
Ans. I do not remember.
Q42. How many executives were there?
Ans. One or two.
Q43. Was it mutually decided from the beginning that the executive would be the person to approve the quality of goods before dispatch?
Ans. Yes.
Q44. At what stage did the executive check the quality of goods? Ans. The executive was shown a sample of the goods after production but before the goods were sent to Bhopal.
Q45. Who used to monitor the production of the goods? Ans. I did.
Q46. Did you call the executive before dispatching the goods?
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Q47. Have you signed the affidavit in your replication after reading the replication?
Ans. Yes I have read the replication.
Q48. Is the replication prepared by your lawyer as per the information provided by you?
Ans. Yes."
61. In support of its defence, learned Counsel for confronted PW-1 with point A1 to A2 of the Replication which reads as "It is submitted that there was some deficiency in the sample but thereafter Defendant appointed executive at Delhi to inspect and check the materials. The material was duly checked and verified by the executive of Defendant company, only then it was supplied to the Defendant company."
62. Learned Counsel for Defendant put the following questions to PW-1 about this portion and an e-mail dated 30.03.2018 sent by Defendant to Plaintiff highlighting the alleged defects in materials sent vide invoices for which the present suit has been filed:
"Q49. (Witness is confronted with para no.7 of the reply to the preliminary submission of the replication Marked from Point Al to A2) The witness is further asked as to whether the email dated 30.03.2018 was replied to only verbally/telephonically as mentioned in the confronted portion?
Ans. I do not remember since it is very old.
NEERA BHARIHOKE Digitally signed by NEERA CS DJ 809/19 M/s S.S. Industries Vs. M/s Biscuit Basket Pvt. Ltd. Page 38 of 58 BHARIHOKE Date: 2025.04.08 15:56:19 +0530 Q51. Is it correct to state that there was some deficiency in the sample provided by you?
Ans. There was no deficiency from the Plaintiff's side."
63. Therefore, the testimony of PW-1 remained in lines with the submissions made in the replication at point A1 to A2 and remained unshaken.
"(Witness is confronted with para no.6 of preliminary submissions of replication Mark B1 to B2 wherein it states "It is submitted that there was some deficiency in sample but thereafter Defendant company appointed executive at Delhi to inspect and check the materials. That the material was duly checked and verified by the executive of Defendant co, only then it was supplied to the Defendant company.") Materials were always seen, passed and only then supplied.
Q52. Who showed the samples to the Executive? Ans. I did.
Q53. Where did you show the samples?
I have already answered it previously in Q 21.
The answer to Q 21 was that:
"The Defendant, Rajan Sarin and his employee have been meeting me at various places such as Starbucks and Cafe Coffee Day all around Delhi NCR such as Vasant Vihar, Ambience Mall, Connaught Place (3 times) for a total of about 20 times. I have also met the Defendant in my car. They would discuss the orders as well as approval of samples."
NEERA BHARIHOKE CS DJ 809/19 M/s S.S. Industries Vs. M/s Biscuit Basket Pvt. Ltd. Page 39 of 58 Digitally signed by NEERA BHARIHOKE Date: 2025.04.08 15:56:25 +0530 Q54. Was Mr. Sarin there when you showed the samples? Ans. Sometimes he was there, at least 10 times.
Q55. Does that mean Mr. Sarin was also responsible for the approval of the samples?
Ans. Yes. He used to come along with the Executive sometimes and both of them together used to pass the samples. I have met him separately also, apart from approval of samples.
Q56. If Mr. Sarin or the executive did not approve the sample, was it your responsibility to rectify the defects in the sample? Ans. Yes. I did all the required changes as per their requirement before printing and supplying."
64. Perusal of cross-examination of PW-1, specially answer to question no.56, establishes that his testimony remained uncontroverted and unshaken as regards the submission of the Plaintiff that inspection, examination and approval of the goods was given by Defendant or its executive before dispatching of the goods by the Plaintiff.
65. This part of cross-examination also corroborates the submission of the Plaintiff that part of cause of action has arisen in Delhi and also that the materials were checked and approved by the DW-1 or executive of Defendant before being dispatched to Defendant. No suggestion was put to PW-1 pursuant to the replies given by him that he was making incorrect or false statements.
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66. PW-1 also stated that he did not know as to who used to receive goods in factory of Defendant and he had never been to factory of Defendant.
67. On being asked as to how he used to know that the goods have been received by DW-1, PW-1 replied that Mr. Sarin used to call and inform him that the goods have been received and again said Mr. Sarin never called him, somebody from the factory did.
68. PW-1 denied the suggestion that Mr. Sarin i.e. DW-1 was not satisfied with the materials. PW-1 was confronted with Ex. PW1/X/D/4 (which is same document which has been tendered by DW-1 as Ex. DW- 1/43) from point C1 to C2 and Ex. PW1/X/D/5 from point D1 to D2 and PW-1 responded that these documents had nothing to do with printing but related to Core. PW-1 explained Core to be a process involved in printing. Specific question was put to PW -1 whether the Defendant had a problem with the process of Core which was used in printing by Plaintiff and PW-1 replied that Core of Plaintiff was ok and there was some problem at the user's end machine. PW-1 was put a question if Core had anything to do with the final product to which PW-1 responded that Core has no relation to the printing and lamination. Again, no suggestion was put to PW-1 that the submissions made by him were incorrect.
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69. The case of the Plaintiff is further fortified by the response of PW- 1 to the questions put to him in respect of payment to be made by the Defendant in respect of the material in question. The relevant part of cross examination is reproduced below:
"Q 70. Was Mr. Ramakant obligated to make the payment once the goods were delivered to Bhopal and approved as per the specification?
Ans. I had asked Mr. Ramakant for advance payment however he had stated that the payment would be made once goods were delivered.
Q 71. Did you agree with this payment term with Mr. Ramakant? Ans. I would always ask for advance payment but he would never give/has given.
Q 71. Do you have any document to show that you had asked the Defendant for advanced payment?
Ans. No. All discussions regarding payment were verbal.
Q 72. Was payment to be made in cash?
Ans. No. All payments were to be made via cheque.
Q 73. When was advanced payment to be made by Defendant? Ans. The Defendant was placing orders continuously without paying for previous consignment. Thus I would ask the Defendant for advanced payment for previous goods sold before I could supply the Defendant their new orders. However the Defendant has never paid a single rupee.
NEERA BHARIHOKE Digitally signed CS DJ 809/19 M/s S.S. Industries Vs. M/s Biscuit Basket Pvt. Ltd. Page 42 of 58 by NEERA BHARIHOKE Date: 2025.04.08 15:56:42 +0530 Q 75. What was the usual practice by which orders would be placed by Defendant on you?
Ans. I've already answered. (Witness is confronted with Ex. PW- 1/X/D/4 At point E1 to E2 stating that orders have been placed via WhatsApp) this extract has nothing to do with the present case but has to do with another company called Trend port."
70. Suggestion was put to PW-1 that he was deposing falsely. However, on perusal of Ex. PW-1/X/D/4, it is noticed that Ex. PW-1/X/D/4 talks of labels of Beer and the present case does not pertain to consignment of materials by the Plaintiff to the Defendant for beer. Therefore, the statement made by PW-1 in respect of Ex. PW-1/X/D/4 that this extract has nothing to do with the present case stands proved. What is equally relevant to discredit the contents of Ex. PW-1/X/D/4 to be pertaining to this case is its date i.e. 30.07.2018, much after the alleged date of Defendant requesting the Plaintiff to take back the materials (January and March 2018).
71. In view of observations made above, the Plaintiff has proved by preponderance of liability that the quality of materials was inspected, checked and approved by DW-1 and/or executive of Defendant and also that Plaintiff used to check every consignment before dispatch. Therefore, Plaintiff has proved that Defendant always used to inspect and approve the materials before dispatching to Defendant and therefore, the contention of the Defendant that property in materials did not pass to the Defendant as the goods were substandard and of inferior quality is not sustainable.
NEERA BHARIHOKE Digitally signed by NEERA CS DJ 809/19 M/s S.S. Industries Vs. M/s Biscuit Basket Pvt. Ltd. Page 43 of 58 BHARIHOKE Date: 2025.04.08 15:56:48 +0530
72. The Defendant has taken a defense that the Defendant examined the materials after the same was delivered to the Defendant in Bhopal and immediately informed the Plaintiff that the same were substandard and were of an inferior quality through various telephonic calls such as WhatsApp messages dated 19.01.2018 and 24.01.2018. The Defendant has also submitted that the Plaintiff admitted the deficiency and further stated that it was a mistake on his part to send the goods to Bhopal.
73. The Defendant has submitted that the Plaintiff gave assurance that he would improve the materials and make the necessary changes. However, the Plaintiff failed to adhere to his assurance and did not replace the inferior quality materials and the materials supplied thereafter were also of substandard quality.
74. However, DW-1 in its affidavit of evidence has taken a contradictory stand in its affidavit of evidence where in Para 14, DW-1 has taken a stand that first delivery of wrappers was given in last week of January 2018. Plaintiff has filed invoice bearing no.263 dated 31.01.2018 The Defendant has not given any explanation as to how deficiency in material allegedly informed through WhatApp messages dated 19.01.2018 and 24.01.2018 were discovered by the Defendant when as per case of Defendant, the materials were sent to the Defendant on 31.01.2018. Therefore, DW-1 has itself deposed the facts which are contradictory to the contents of Written Statement. Therefore, the NEERA BHARIHOKE CS DJ 809/19 M/s S.S. Industries Vs. M/s Biscuit Basket Pvt. Ltd. Page 44 of 58 Digitally signed by NEERA BHARIHOKE Date: 2025.04.08 15:56:55 +0530 Defendant has failed to prove that WhatsApp messages dated 19.01.2018 and 24.01.2018 were sent in respect of the materials supplied by the Plaintiff to Defendant and the Plaintiff has proved that these WhatsApp messages were in respect of the sample of materials which was agreed to be supplied by the Plaintiff to the Defendant and not with respect to the materials supplied by the Plaintiff to the Defendant after removal of the defects/deficiencies pointed by the Defendant.
75. Even otherwise, the submission of the Defendant in the Written Statement is that the materials supplied by the Plaintiff to the Defendant were deficient and sub-standard. The deficiencies have been mentioned as:
a. The printing quality was very poor and images on the wrapper were blurred.
b. The Lamination quality was poor. The paper was separating into layers and opening up during the process of sealing.
c. Wrapping rolls were too big and heavy. The appropriate weight should be 12-14 kg. However, the gross weight of the wrapper was 31 kg.
d. The eye-mark was not proper, because of which there was wastage of paper and machine was unable to detect the eye mark and complete the sealing process. As a result, the sealing had to be done manually.
e. There were lines in wrapper due to improper drying of ink.
NEERA BHARIHOKE CS DJ 809/19 M/s S.S. Industries Vs. M/s Biscuit Basket Pvt. Ltd. Page 45 of 58 Digitally signed by NEERA BHARIHOKE Date: 2025.04.08 15:57:03 +0530 f. Thickness of the lamination (GSM) was uneven. Standard to be maintained should be 42-44 microns. Whereas the wrappers received were of over 55 microns.
g. Vignette Size was uneven from both ends. Thus, the design image was not as per the sample.
The same is evident from the report prepared by the quality in- charge of the Defendant in January 2018.
76. The Defendant has relied on Ex. DW-1/7 i.e. e-mail dated 30.03.2018 and Ex. DW-1/21 i.e. email dated 01.06.2018 sent by one Deepali, Food Technologist of Defendant to Plaintiff which mentions 8 bills i.e. i. Bill dated 31.01.2018, Bill no. 263, ii. Bill dated 01.02.2018, Bill no. 268, iii. Bill dated 05.02.2018, Bill no. 272, iv. Bill dated 06.02.2018, Bill no. 273, v. Bill dated 10.03.2018, Bill no. 292, vi. Bill dated 11.03.2018, Bill no. 293 vii. Bill dated 27.03.2018, Bill no. 311 viii. Bill dated 29.03.2017, Bill no. 333
77. In the said mails it has also been written that the issues mentioned were found in these Bills. Therefore Ex.DW-1/7 and Ex.DW-1/21 corroborate the version of PW-1 that the WhatsApp messages dated 19.01.2018 and 24.01.2018 do not pertain to the materials supplied by the Plaintiff to the Defendant but to the samples which were resolved by the Plaintiff as stated by PW-1 in his cross examination. WhatsApp NEERA BHARIHOKE CS DJ 809/19 M/s S.S. Industries Vs. M/s Biscuit Basket Pvt. Ltd. Page 46 of 58 Digitally signed by NEERA BHARIHOKE Date: 2025.04.08 15:57:10 +0530 messages dated 19.01.2018 and 24.01.2018 could not have been exchanged between the parties in respect of the material supplied by Plaintiff to the Defendant says according to Ex.DW-1/7 and Ex.DW- 1/21, The first bill under which material had been withheld is dated 31.01.2018 and therefore the quality issues, if any, in that material could not have been pointed by the Defendant to the Plaintiff.
78. The Plaintiff has filed the present suit even in respect of the goods which were supplied by him to the Defendant prior to 31.01.2018 i.e. Bill no.206 dated 21.12.2017 and since in Ex.DW-1/7 and Ex.DW-1/21, there is no reference to the material supplied through this Bill to be defective, Whatsapp messages dated 19.01.2018 and 24.01.2018 could not pertain to the materials supplied by the Plaintiff to the Defendant through this Bill i.e. through Bill no.206 dated 21.12.2017.
79. Coming to the objections of the Defendant about the defect in the goods supplied by the Plaintiff to the Defendant, any person experienced in the packaging industry like in this case, the Defendant/DW-1, could have come to know on physical examination of the material supplied by the Plaintiff to it/him is defective as some of the mentioned defects are of such nature that will be visible to naked eye on physical examination or could have been tested by simple tests or instruments without putting the rolls of the material to the machine for wrapping and sealing like :-
The printing quality was very poor and images on the wrapper were blurred NEERA BHARIHOKE CS DJ 809/19 M/s S.S. Industries Vs. M/s Biscuit Basket Pvt. Ltd. Page 47 of 58 Digitally signed by NEERA BHARIHOKE Date: 2025.04.08 15:57:17 +0530 The Lamination quality was poor, the paper was separating into layers Wrapping rolls were too big and heavy. The appropriate weight should be 12-14 kg. However, the gross weight of the wrapper was 31 kg. Anybody can note the difference between weight of wrapper of 12-14 kgs and that of 31 kgs and also the capacity of its own machine if it will be able to bear and accept double the standard weight, eye-mark was not proper, There were lines in wrapper due to improper drying of ink Thickness of the lamination (GSM) was uneven Vignette Size was uneven from both ends.
80. This observation is supported by Ex. DW-1/23 tendered by DW-1 in his examination in chief. Ex. DW-1/23 is a photocopy and is not admissible in evidence. The Defendant, even otherwise, failed to prove the same since the Defendant did not examine its author.
81. As the Defendant has relied on it, the document is being referred to. According to the Defendant, the first consignment received by it from the Plaintiff is the material sent by the Plaintiff by Invoice/ Bill dated 31.01.2018. The consignment note of the goods having been given to the transporter is also of the same date.
82. It is not understandable as to how the materials reached in Bhopal on the same day and how the quality in charge of Defendant could examine the material in January 2018 as its report is undated but is of January 2018. The report deals with all the parameters mentioned by Defendant in its written statement by the Defendant and provides that printing quality is blurred, GSM is above 55 microns, Eye mark printing NEERA CS DJ 809/19 M/s S.S. Industries Vs. M/s Biscuit Basket Pvt. Ltd. Page 48 of 58 BHARIHOKE Digitally signed by NEERA BHARIHOKE Date: 2025.04.08 15:57:24 +0530 is faded and raw colour, Delamination is easily delaminating with hand, sealing count 2 packets/1.6 sec, sealing quality-separating after seal, vignette size-differ in size, picture placing shifted to left, color out of standard dark red picture and giving the status of all the parameters as failed. The note on Ex.DW-1/23 is "Material reject due to poor quality and found every standard out."
83. If physical examination of the material supplied revealed so many defects, how and why would any prudent person choose to use such material for packaging its biscuits and rusks and that too after report of its quality in charge is of rejection of the said material. The Defendant has created documents to defeat the legitimate claim of the Plaintiff. The Defendant claiming to be having experience over years would not have accepted these materials had these been defective and would not have continued to accept the consignment of the materials supplied by Plaintiff one after another in a span of three months. No prudent business entity will accept that and put itself at a loss. The submissions of the Defendant do not merit any consideration.
84. In view of the unshaken testimony of PW-1 during his cross- examination that the goods supplied were not defective and that is the reason that the Defendant continued to place orders and also that the Defendant had cooked up false stories to evade payment, the Defendant was required to prove on record that the materials provided by the Plaintiff were defective or were of inferior quality. The Defendant has NEERA BHARIHOKE CS DJ 809/19 M/s S.S. Industries Vs. M/s Biscuit Basket Pvt. Ltd. Page 49 of 58 Digitally signed by NEERA BHARIHOKE Date: 2025.04.08 15:57:30 +0530 not produced anything on record in support of its defence that the materials supplied by the Plaintiff were defective. The Defendant has only tendered the e-mails sent by Biscuit Basket, the Defendant, about the aforementioned defects in the materials supplied by the Plaintiff through the Bills mentioned in the Ex. DW-1/7 i.e. email dated 30.03.2018 and Ex. DW-1/21 i.e. email dated 01.06.2018. The said mails at best prove the fact of information by the Defendant to the Plaintiff but cannot be equated with proof of rejection of material by Defendant.
85. DW-1 has stated in his cross-examination that 95% of the material supplied to Defendant by Plaintiff is lying with it and the Plaintiff could take it back but did not produce any of such defective material before this Court in evidence. The two e-mails i.e. Ex. PW-1/7 and Ex. PW- 1/21 can at best be considered as intimations of defective material but not as proof of the materials supplied to be defective. Further, if the Defendant had put only 5% of the materials supplied by the Plaintiff to the Defendant, how it could suffer a loss of Rs.31,75,000/- by using 5% material of Plaintiff and the figure given in Para 8 of the Reply on merits in the Written Statement is concocted by the fact that in table drawn in Para no, 8, there is mention of 7 Dealers who returned the material supplied by Defendant to the Plaintiff but the quantum of loss allegedly suffered by the Defendant in respect of Dealer named MP Traders has not been mentioned and the total amount mentioned in the column of TOTAL comes to be Rs.31,75,000/- only but the Defendant has placed on record typed copies of some correspondence allegedly sent by these NEERA BHARIHOKE CS DJ 809/19 M/s S.S. Industries Vs. M/s Biscuit Basket Pvt. Ltd. Page 50 of 58 Digitally signed by NEERA BHARIHOKE Date: 2025.04.08 15:57:41 +0530 dealers to the Defendant i.e. Ex. DW-1/9 to Ex. DW-1/20 and Ex. DW- 1/20 is typed copy of alleged communication sent by dealer MP Traders on 21.04.2018 to the Defendant. The language, the expressions and the contents of all these exhibits are similar. In absence of the Defendant producing originals of any of these alleged communications between the so called Dealers of the Defendant and the Defendant, the Defendant has miserably failed to prove the contentions of the material supplied by the Plaintiff to be suffering from the alleged defects as well as the Defendant has failed to prove rejection of the materials supplied by him to his dealers.
86. I concur with submissions of learned Counsel for Plaintiff that the Defendant has forged Ex. DW-1/9 to Ex. DW-1/20 in support of its frivolous defence.
87. The Defendant had filed an application under Order VIII Rule 1 A(3) CPC to bring additional documents on record by submitting that those documents could not be filed earlier and were proposed to be filed after conclusion of evidence of Plaintiff which was dismissed vide order dated 16.01.2024. Ms. Deepali had given the Certificate under section 65 B of Evidence Act in support of the documents which were proposed to be filed as additional documents. Deeming the contents of the Ex. DW- 1/7 and Ex. DW-1/21 were true, Deepali is the author of these two exhibits, the Defendant could and should have produced said NEERA BHARIHOKE Digitally signed CS DJ 809/19 M/s S.S. Industries Vs. M/s Biscuit Basket Pvt. Ltd. Page 51 of 58 by NEERA BHARIHOKE Date: 2025.04.08 15:58:04 +0530 Ms.Deepali, Food Technologist as its witness. But the Defendant did not produce her and thus failed to prove Ex. DW-1/7 and Ex. DW-1/21.
88. The onus was on the Defendant to produce, if nothing, some part of the alleged defective material in its evidence or to summon a witness from Biscuit Basket or its dealers who allegedly returned the products of the Defendant packed by that alleged defective material which was supplied by Defendant i.e. author of any of the exhibits/dealers from Ex. DW-1/9 to Ex. DW-1/20. He is admittedly CEO of Biscuit Basket, the Defendant. He could have at least produced alleged defective materials supplied by Plaintiff or products returned by any of those dealers or a witness from Biscuit Basket to depose in support of the defence of the Defendant that the materials were of inferior quality or were defective. The Defendant has failed miserably to prove that the materials were of inferior quality and substantiates the stand of the Plaintiff that the mails sent by the Defendant to Plaintiff were written to evade making payment due under the invoices to the Plaintiff.
89. The Defendant has been unable to prove its defence that the goods were not inspected and approved by its executives in the factory/office of the Plaintiff before being dispatched by the Plaintiff to the Defendant whereas the Plaintiff has proved the same by its unshaken testimony. Therefore, the property in the goods passed to the Defendant much before the goods reached Bhopal and the Defendant failed to prove that NEERA BHARIHOKE CS DJ 809/19 M/s S.S. Industries Vs. M/s Biscuit Basket Pvt. Ltd. Page 52 of 58 Digitally signed by NEERA BHARIHOKE Date: 2025.04.08 15:58:10 +0530 the sale was not complete in absence of approval by DW-1 after the goods reached Bhopal and after he examined them.
90. As per the case of the Defendant, the Defendant supplied biscuits and rusks to various dealers/traders in the materials supplied by the Plaintiff because of Plaintiff's not taking back the material with intent to mitigate the losses. Therefore, the Defendant did an act adopting the transaction. In view of the said statement of the Defendant in its Preliminary Submissions, the Defendant itself contradicted its stand that the Plaintiff was informed that the goods shall only be accepted once the Defendant approves the quality of the same. Therefore, the Defendant, doing an act of adopting the transaction takes the case of the Defendant out of the ambit of Section 24 of Sale of Goods Act.
91. Therefore, the corollary is that the sale was complete at the latest on the receiving of the supply from the Plaintiff by the Defendant and the defence of the Defendant that it is not liable to pay the amount of the materials supplied through the invoices for which the present suit has been filed fails and is unsustainable. The act of rejection of the material supplied by the Plaintiff to the Defendant, deeming it to be correct, is thus an act subsequent to the completion of Sale between the parties and the Defendant has its own remedies to pursue under Sale of Goods Act or any other law but the Defendant cannot escape its liability to pay the amount claimed through these invoices since the Plaintiff has proved NEERA BHARIHOKE Digitally signed by NEERA BHARIHOKE CS DJ 809/19 M/s S.S. Industries Vs. M/s Biscuit Basket Pvt. Ltd. Page 53 of 58 Date: 2025.04.08 15:58:19 +0530 these invoices. The Defendant has itself stated that in the alternative the Plaintiff should pay damages to the Defendant.
92. In its written submissions, the Defendant has submitted that if the case of the Plaintiff is that the materials were wrongly rejected by the Defendant, the Plaintiff ought to have filed a case for damages for non- acceptance as per section 56 of Sale of Goods Act.
93. Section 56 of the Sale of Goods Act, 1930, which deals with damages for non-acceptance. It is in addition to a seller's right to claim the price of goods under Section 55, which addresses suits for price. Section 55 allows a seller to sue the buyer for the price of goods when the buyer wrongfully refuses to pay, even if the property in the goods has passed to the buyer. In other words, if the buyer has agreed to buy the goods and the seller has fulfilled its part of the contract by delivering or being ready to deliver the goods, the seller can sue for the price. Section 56 provides for remedy to claim damages for non-acceptance and provides that if the buyer wrongfully neglects or refuses to accept and pay for the goods, the seller can sue the buyer for damages for non- acceptance. This means the seller can seek compensation for any loss or damage suffered due to the buyer's refusal to take delivery or pay for the goods. Section 56 is an additional remedy available to the seller, in addition to the right to claim the price under Section 55. Therefore, the contention/submission of Defendant is not sustainable that the present suit for recovery is not maintainable since remedies under Section 55 NEERA BHARIHOKE CS DJ 809/19 M/s S.S. Industries Vs. M/s Biscuit Basket Pvt. Ltd. Page 54 of 58 Digitally signed by NEERA BHARIHOKE Date: 2025.04.08 15:58:26 +0530 and Section 56 of Sale of Goods Act are not mutually exclusive; a seller can pursue both, depending on the circumstances of the case.
94. It is noticed that the Defendant has left no stone unturned to mislead this court by making submissions in its affidavit of evidence which are beyond the pleadings and in its written submissions, the Defendant has taken some grounds which were not part of either pleadings or evidence. Further, the Defendant has taken contradictory defences in its Written Statement.
95. Section 42 of the Sale of Goods Act, 1930, defines when a buyer is deemed to have accepted goods, which occurs when they intimate acceptance, perform an act inconsistent with the seller's ownership, or retain the goods after a reasonable time without rejecting them. In its written statement, the Defendant and in its affidavit of evidence, DW1 has mentioned that to mitigate the loss, the Defendant supplied the materials to his dealers and the same was rejected by them. The said submission of the Defendant shows that the buyer i.e. Defendant performed an act inconsistent with the seller's ownership. The Defendant has taken contradictory stands. Deeming that the goods received by Defendant were defective (which the Defendant has failed to prove miserably), in view of the above deposition of DW-1, the Defendant loses the right to reject the material and at best could claim damages for breach of warranty. The Defendant has, in fact, itself pleaded that it be paid compensation in the alternative for loss suffered NEERA BHARIHOKE CS DJ 809/19 M/s S.S. Industries Vs. M/s Biscuit Basket Pvt. Ltd. Page 55 of 58 Digitally signed by NEERA BHARIHOKE Date: 2025.04.08 15:58:32 +0530 by it but did not lead any evidence to prove that it suffered any loss. In the conspectus of these observations, the Defendant had no right to reject the materials nor could it therefore refuse payment of the materials supplied by the Plaintiff to the Defendant through its invoices.
96. Plaintiff has proved its invoices, and the invoices specifically provide the terms and conditions that the goods once sold will not be taken back and the responsibility of the Plaintiff ceases when the goods are delivered to the party or the carrier. Therefore, the material supplied by Plaintiff to Defendant would be governed by terms and conditions mentioned in the invoices.
97. The Plaintiff has proved the fact of delivery of materials to the Defendant alongwith invoices as well as its Ledger Account. The testimony of PW-1 remained unimpeached and unshaken since PW-1 took a consistent stand that the materials supplied by the Plaintiff were not defective during his cross-examination coupled with the fact that the Defendant did not produce any evidence or material on record to show that the materials provided by the Plaintiff were defective nor produced any witness from office of Biscuit Basket like Quality in charge or any of its dealers nor produced any defective materials or the packaged goods allegedly rejected and returned by its Dealers in its evidence or alongwith its written statement, proves the case of the Plaintiff by preponderance of liability. Therefore, the Plaintiff has proved its case by preponderance of probabilities. Therefore it is held that the Plaintiff is NEERA BHARIHOKE CS DJ 809/19 M/s S.S. Industries Vs. M/s Biscuit Basket Pvt. Ltd. Page 56 of 58 Digitally signed by NEERA BHARIHOKE Date: 2025.04.08 15:58:38 +0530 entitled to relief of recovery of suit amount of Rs.7,73,437/- to be paid by the Defendant. The Plaintiff is also held entitled to recovery of notice charges of Rs.5,500/-. Therefore issue no.2 is decided in favor of Plaintiff and against the Defendant.
Issue No.3 : Whether any interest is payable, if any, at what rate?
The onus to prove this issue was on the Plaintiff.
98. In view of issue No.1 decided in favour of the Plaintiff and against the Defendant, it is held that Plaintiff is entitled to interest.
99. The Plaintiff has claimed the amount of Rs.7,73,437/- alongwith pendente lite and future interest @ 18% per annum. It is held that Plaintiff is entitled for pendente lite and future interest at the rate of 18% per annum on Principal amount i.e. Rs.7,73,437/- till its realization. Issue no.3 is, therefore, decided in favour of Plaintiff and against the Defendant.
RELIEF
100. In view of my findings on issue No.1 to 3, the present case is decreed in favour of Plaintiff and against the Defendant for the sum of Rs.7,73,437/- alongwith pendente lite and future interest @ 18% per annum till its realization. Defendant is also directed to pay a sum of Rs.5,500/- to the Plaintiff towards Notice Charges. Defendant is also directed to pay to Plaintiff the cost of the suit which shall include pleader's fee and the other costs on the scale provided under section 35 NEERA BHARIHOKE CS DJ 809/19 M/s S.S. Industries Vs. M/s Biscuit Basket Pvt. Ltd. Page 57 of 58 Digitally signed by NEERA BHARIHOKE Date: 2025.04.08 15:58:45 +0530 of the Code of Civil Procedure as substituted by Commercial Courts Act. If the payment is not made within thirty days, the cost shall also carry simple interest @ 6% per annum.
101. Decree sheet be prepared accordingly.
File be consigned to record room after necessary compliance. NEERA BHARIHOKE Announced in the open Digitally signed by NEERA Court on 08.04.2025 BHARIHOKE Date: 2025.04.08 (Dr. Neera Bharihoke) 15:58:54 +0530 District Judge (Commercial Court)-06 South East, Saket Courts, New Delhi 08.04.2025 Certified that this judgment contains 58 pages and each page bears my signatures.
NEERA (Dr. Neera Bharihoke) BHARIHOKE District Judge (Commercial Court)-06 South East, Saket Courts, New Delhi Digitally signed 08.04.2025 by NEERA BHARIHOKE Date: 2025.04.08 15:58:59 +0530 CS DJ 809/19 M/s S.S. Industries Vs. M/s Biscuit Basket Pvt. Ltd. Page 58 of 58