Delhi District Court
Anil Kumar Bansalproprietor Ofm/S ... vs Anga Sagar Singhproprietor Ofm/S Ganga ... on 20 November, 2023
DLCT010104012022
IN THE COURT OF SH. SANJEEV KUMAR AGGARWAL : DISTRICT
JUDGE (COMMERCIAL) 01 : CENTRAL, TIS HAZARI COURTS,
DELHI
CS (Com.) No. 1769/2022
Sh. Anil Kumar Bansal,
Proprietor of :
M/s. Mayank Enterprises,
Regd. Office at :
A601, Shastri Nagar,
Delhi - 110052. ..... Plaintiff.
Versus
Sh. Ganga Sagar Singh,
Proprietor of :
M/s. Ganga Sagar Singh,
Office at : Village & Post Office,
Karampur, Aurihar,
Tehsil Saidpur, Distt. Gazipur,
Uttar Pradesh - 233221.
Suit (Com.) No. 1769/2022 Page No. 1 of 28
Anil Kumar Bansal Vs. Ganga Sagar Singh
Also at :
S246, AK40, Hans Nagar Colony,
Taktapur, Varanasi, U.P. 221002. .... Defendant
Date of institution : 14.07.2022
Date of reserving Judgment : 14.09.2023
Date of decision : 20.11.2023
SUIT FOR RECOVERY OF RS. 10,64,549/ ALONG WITH PENDENTE
LITE AND FUTURE INTEREST.
JUDGMENT
1. Vide this Judgment, I shall decide the suit for recovery of Rs. 10,64,549/ along with pendente lite and future interest filed by the plaintiff against the defendant.
2. The brief facts as stated in the plaint are that the plaintiff is doing the business of industrial oil under the name and style of M/s. Mayank Enterprises and defendant is also carrying the business of sale and purchase of fuel oil under the name and style of M/s. Ganga Sagar Singh. It is further stated that the defendant placed order for supply of fuel oil / rubber processed oil to the plaintiff as per their requirement and plaintiff supplied the goods through various invoices over a period of time for sale consideration total amounting to Rs. 69,09,077/ and the Suit (Com.) No. 1769/2022 Page No. 2 of 28 Anil Kumar Bansal Vs. Ganga Sagar Singh plaintiff maintained a running account for supply of goods and amount received and as per the said account, a sum of Rs. 6,59,164/ is balance. It is further stated that the defendant was required to make payment within 30 days otherwise he will be liable to pay interest @ 18% per annum. The defendant did not make the payment therefore, the plaintiff sent legal notice dated 2.9.2021 but the same was never replied by the defendant and thus, the defendant is liable to pay amount of Rs. 6,59,164/ towards cost of the goods along with interest @ 18% per annum w.e.f. 10.12.2018 till 10.5.2022 and thus is liable to pay a total amount of Rs. 10,64,549/ to the plaintiff. Hence, the present suit.
3. Summons of the suit were sent to the defendant. Defendant contested the suit by filing the written statement. In the written statement, the defendant has taken the preliminary objections that this court has no territorial jurisdiction to decide the present suit as the defendant does not reside within the territorial jurisdiction of this court and the goods were not supplied within the jurisdiction of this court and further, the suit is barred by limitation.
4. On merits, the defendant has denied that the defendant has placed order at Delhi for supply of goods and also denied that the plaintiff supplied goods amounting to Rs. 69,09,077/ and a sum of Rs. 6,59,164/ is due. Further, it is denied that the defendant is liable to pay interest @ 18% per annum in case payment is not made within 30 days of supply of goods. He also denied that he is liable to pay Rs. 6,59,164/ as cost of goods and Rs. 4,05,385/ as interest. Hence, the defendant has prayed for dismissal of the suit.
Suit (Com.) No. 1769/2022 Page No. 3 of 28Anil Kumar Bansal Vs. Ganga Sagar Singh
5. Plaintiff has filed replication in which he denied the contents of the written statement and has reiterated the contents of the plaint as true and correct. The plaintiff has denied that this court has no territorial jurisdiction to decide this suit. It is stated that the invoices categorically mentioned the condition that Delhi jurisdiction only hence, this court has the territorial jurisdiction and thus prayed for decree of the suit amount.
6. Admission / denial of the documents has been filed by the defendant qua documents of the plaintiff in which he has denied all the documents of the plaintiff.
7. On the basis of the pleadings of the parties, following issues were framed vide order dated 16.2.2023 for consideration :
1. Whether this court has no territorial jurisdiction to try the present suit? OPD.
2. Whether the present suit is barred by limitation?
OPD.
3. Whether plaintiff is entitled to recovery of Rs.
10,64,549/? OPP.
4. Whether plaintiff is entitled to pendente lite and future interest? If so, at what rate and for which period? OPP.
5. Relief.
8. In order to prove his case, plaintiff has only examined himself as CW1 and led his evidence by way of affidavit Ex. CW1/A and Suit (Com.) No. 1769/2022 Page No. 4 of 28 Anil Kumar Bansal Vs. Ganga Sagar Singh relied upon the documents Ex. CW1/1A (Colly.) to Ex. CW1/1J (Colly.) and Ex. CW1/2 to Ex. CW1/6 and Mark X (Colly.). He was cross examined by Ld. Counsel for the defendant.
9. On the other hand, the defendant has examined only one witness i.e. its AR as DW1 who led his evidence by way of affidavit as Ex. DW1/A. He was cross examined by Ld. Counsel for the plaintiff.
10. Arguments heard from Sh. Dheeraj, Ld. Counsel for the plaintiff and Sh. Ivan, Ld. Counsel for the defendant.
11. I have considered the submissions and have gone through the record. My issuewise findings are as follows : ISSUE NO. 1.
Whether this court has no territorial jurisdiction to try the present suit? OPD.
12. In order to prove his case that this court has the territorial jurisdiction, the plaintiff has examined himself as CW1 who in his evidence led through affidavit Ex. CW1/A has deposed that the plaintiff has supplied the goods to the defendant vide invoices Ex. CW1/1A to Ex. CW1/1J and the said goods were supplied from Delhi. He deposed that the defendant has placed order for supply of goods i.e. fuel oil to the plaintiff in Delhi and the plaintiff supplied the goods to the defendant vide invoices from Delhi.
In his cross examination, he deposed that his business with defendant commenced in the year 2017. He used to supply goods to the Suit (Com.) No. 1769/2022 Page No. 5 of 28 Anil Kumar Bansal Vs. Ganga Sagar Singh defendant by his own tanker through Tina Oil Carrier which is also his proprietorship firm. He supplied goods to the defendant vide 10 invoices since 2017. He further stated that there is no purchase order pertaining to invoices Ex. CW1/1A, Ex. CW1/1D, Ex. CW1/1F, Ex. CW1/1H and Ex. CW1/1J and submitted that in the purchase order dated 28.11.2017 which is the part of Mark X (Colly.) the defendant ordered the quantity of 20000 liters and in the corresponding invoice dated 29.11.2017 Ex. CW1/1C, the plaintiff has supplied quantity of 22000 liters.
13. On the other hand, in order to prove that this court has no territorial jurisdiction, the defendant has examined its AR as DW1 who in his evidence led through affidavit Ex. DW1/A has stated that the defendant is the sole proprietor of M/s. Ganga Sagar Singh having its office at Village & Post Office Karampur, Aurihar, Tehsil Saidpur, Distt. Ghazipur, UP and he further stated that the goods supplied by the plaintiff was not as per the specifications outlined by the defendant and that the orders were not placed at Delhi.
14. It is argued by Ld. Counsel for the plaintiff that from the testimony of CW1, it is proved that the order for goods were placed at Delhi by the defendant and the goods were supplied from Delhi, further the invoices categorically stated that the courts of Delhi would have the territorial jurisdiction therefore this court has the territorial jurisdiction to decide the present suit.
15. On the other hand, it is argued by Ld. Counsel for the defendant that since the defendant does not reside within the territorial Suit (Com.) No. 1769/2022 Page No. 6 of 28 Anil Kumar Bansal Vs. Ganga Sagar Singh jurisdiction of this court and plaintiff has failed to prove any document that any order of goods was placed at Delhi and further since invoice was never accepted by the defendant therefore no jurisdiction can be conferred to this court by the clause in invoice "subject to Delhi jurisdiction" hence this court has no territorial jurisdiction.
16. I have considered the submissions and have gone through the record. Since the suit pertains to recovery of money therefore Section 20 of the Code of Civil Procedure would deal the territorial jurisdiction. Same is reproduced as under :
"Other suits to be instituted where defendants reside or cause of action arises.
Subject to the limitations aforesaid, every suit shall be instituted in a Court within the local limits of whose jurisdiction
(a) the defendant, or each of the defendants where there are more than one, at the time of the commencement of the suit, actually and voluntarily resides, or carries on business, or personally works for gain; or
(b) any of the defendants, where there are more than one, at the time of the commencement of the suit, actually and voluntarily resides, or carries on business, or personally works for gain, provided that in such case either the leave of the Court is given, or the defendants who do not reside, or carry on business, or personally works for gain, as aforesaid, acquiesce in such institution; or
(c)The cause of action, wholly or in part, arises".Suit (Com.) No. 1769/2022 Page No. 7 of 28
Anil Kumar Bansal Vs. Ganga Sagar Singh
17. On analyzing the testimony of plaintiff and defendant, it is evident that defendant is not residing or work for gain within the territorial jurisdiction of this court. As far as clause (c) i.e. whether cause of action wholly or partly arose or not, it has to be seen. Plaintiff has deposed that he supplied the goods through invoice Ex. CW1/1A to Ex. CW1/1J. No suggestion has been given to CW1 that the goods were not supplied to the defendant through invoices Ex. CW1/1A to Ex. CW1/1J. Further, the transport receipts have been exhibited by the plaintiff for each delivery with the respective invoices. From the transport receipts, it is evident that the goods have been supplied from consignor address i.e. Mayank Enterprises, A601, Shastri Nagar, Delhi - 110052 which clearly proves that the goods have been supplied by the plaintiff from his address at Shastri Nagar which comes within the territorial jurisdiction of this court. Further, plaintiff has deposed that purchase order has been placed at Delhi. No suggestion has been given that same were not placed at plaintiff's office at Delhi. Hence, part cause of action arose within the territorial jurisdiction of this court. Further, the invoices categorically mentions the terms "Subject to 'Delhi' jurisdiction only". Admittedly, the defendant has not denied of receipt of goods through invoices therefore, it amounts to defendant accepting the said condition. Parties by agreement can choose jurisdiction of a specific Court ousting jurisdiction of other Court. In this regard I rely upon M/s Empee Distilleries Pvt. Ltd. Vs. M/s S.S. Enterprises Pvt. Ltd. (RFA 534/2004) decided on 25.07.2011 wherein it is held that:
"13. Ouster of jurisdiction of a court can be claimed by either Suit (Com.) No. 1769/2022 Page No. 8 of 28 Anil Kumar Bansal Vs. Ganga Sagar Singh party if there is a clear agreement that the expression implies to oust the jurisdiction of a court and also when such a court otherwise has jurisdiction to try and entertain the suit. It is further a settled legal position that ouster of jurisdiction of a court or place would arise only in a case where both the parties have agreed to confer the jurisdiction at a particular place or court by using the necessary expression of "only" "exclusive" and also when such a place otherwise has jurisdiction to try and entertain the suit.
14. The appellant in the present case has claimed exclusive jurisdiction of Madras courts only and exclusion of territorial jurisdiction of Delhi courts based on two purchase orders proved on record as Ex. PW1/5 and Ex.PW1/13. These purchase orders carry terms and conditions of the purchase on the reverse of the same and clause 7 of the same deals with the jurisdiction of place which reads as under:
"Any dispute arising out of this contract will be subject to the jurisdiction of Madras Courts only."
15. Twofold arguments were raised by the counsel for the appellant based on the said purchase orders on the issue of jurisdiction i.e. the said purchase orders constitute contract between the parties and the said contract envisages a jurisdiction clause which restricts the jurisdiction to file a suit with Madras court only.
16. In Hakam Singh Vs. Gammon (India) Ltd., (1971)1SCC286, the Apex Court held that it is not open to the parties to confer by their agreement jurisdiction on a court which it does not possess. It further held that where two or more courts have the jurisdiction to try a suit or a proceeding, an agreement between the parties that the dispute between them shall be tried in one of such courts is not contrary to the public policy and that such an agreement does not contravene Section 28 of the Contract Act. Therefore, the parties to a contract can by an ouster clause oust the jurisdiction of a particular court which other wise had the jurisdiction to entertain the suit, which was further Suit (Com.) No. 1769/2022 Page No. 9 of 28 Anil Kumar Bansal Vs. Ganga Sagar Singh clarified by the Apex Court in the case of A.B.C.Laminart (P) Ltd. Vs. A.P. Agencies (1989)2SCC163, where the same question was examined in considerable detail and it was held as under:
"From the foregoing decisions it can be reasonably deduced that where such an ouster clause occurs, it is pertinent to see whether there is ouster of jurisdiction of other courts. When the clause is clear, unambiguous and specific accepted notions of contract would bind the parties and unless the absence of ad idem can be shown, the other courts should avoid exercising jurisdiction. As regards construction of the ouster clause when words like "alone", "only", "exclusive" and the like have been used there may be no difficulty. Even without such words in appropriate cases the maxim "expressio unius est exclusio alterius" expression of one is the exclusion of another may be applied. What is an appropriate case shall depend on the facts of the case. In such a case mention of one thing may imply exclusion of another. When certain jurisdiction is specified in a contract an intention to exclude all others from its operation may in such cases be inferred. It has therefore to be properly construed."
The same view was reiterated by the Apex Court in the case of Angile Insulations vs. Davy Ashmore India Ltd (1995)4 SCC 153.
17. In the present case, the appellant is claiming jurisdiction of Madras courts to the exclusion of the jurisdiction of Delhi courts based on the said clause 7 of the purchase order which restricts the jurisdiction with Madras courts only. The appellant has also claimed that the purchase order has a binding effect on the respondent as the same constitutes a contract between the parties. The respondent, on the other hand has based the jurisdiction with the Delhi courts on the premise that the orders were received by the respondent at Suit (Com.) No. 1769/2022 Page No. 10 of 28 Anil Kumar Bansal Vs. Ganga Sagar Singh Delhi, the payments were to be made by the appellant to the respondent at Delhi; the goods were dispatched from Delhi. Surprisingly, neither the appellant in its written statement has claimed vesting of jurisdiction with Madras courts based on its purchase orders nor even the respondent claimed jurisdiction of Delhi Courts based on the invoices/bills. The appellant in its written statement took a stand that the suit is not maintainable in Delhi courts as the cause of action has arisen in Chennai where the goods were delivered; where the agreement was entered into; payment was to be made at Chennai and the appellant had to store all the defective goods at Chennai. The defence taken by the appellant in its written statement is not specific to clause 7 of its purchase orders. Even in reply to the preliminary objections, the appellant did not make any specific reference to the said purchase orders to claim jurisdiction with the Madras courts only. It is not the case of any of the parties that prior to placing the said orders by the appellant there was any other contract between the parties whereunder the issue of jurisdiction of courts was settled between them. In the absence of any such agreement, the appellant has claimed exclusion of jurisdiction of Delhi courts based on clause 7 of the purchase orders while the respondent on the other hand has claimed jurisdiction of Delhi courts based on the printed terms in its invoices/bills. It is not the case of the appellant that after placing of the said orders, through the purchase orders, the respondent had agreed to the said jurisdiction clause, rather it is an admitted case between the parties that in the invoices/bills raised by the respondent, the printed clause which relates to the jurisdiction restricts the jurisdiction of disputes to Delhi courts only. It is thus quite manifest that there was no consensus or meeting of minds or any sort of agreement or contract between the parties to confer jurisdiction on a particular court. It also cannot be denied that so far the cause of action is concerned, the same arose within the jurisdiction of both the places i.e. Madras as well as Delhi Suit (Com.) No. 1769/2022 Page No. 11 of 28 Anil Kumar Bansal Vs. Ganga Sagar Singh and the jurisdiction could be restricted by the parties to one of the courts had there been any clear agreement between the parties to this effect. In the absence of any clear agreement between the parties, the appellant cannot claim ouster of jurisdiction of Delhi courts merely based on clause 7 of the purchase orders, which was never agreed to by the respondent".
18. In view of aforesaid discussion, I held that this court has the territorial jurisdiction to try and decide the present suit. Issue No. 1 is decided accordingly in favour of the plaintiff and against the defendant.
ISSUES NO. 2.
Whether the present suit is barred by limitation? OPD.
19. The defendant has taken the preliminary objection that the invoices relied upon by the plaintiff pertains to the year 201718 therefore even if the Suo Motu Judgment passed by the Hon'ble Supreme Court is taken into consideration, the same would have merely granting time till 31.5.2022 for filing the present suit whereas the plaint has been presented before this court on 13.7.2022 hence the amount of bills of the year 201718 are barred by limitation.
20. I have considered the submissions and have gone through the record.
21. On perusal of invoices, I found that the invoices Ex. CW1/1A to Ex. CW1/1J are from 7.10.2017 to 24.4.2018. Since it was a simple current running account maintain by plaintiff in which it used to mention details of goods supplied to defendant and payments made by defendant Suit (Com.) No. 1769/2022 Page No. 12 of 28 Anil Kumar Bansal Vs. Ganga Sagar Singh therefore, period of limitation would start from the date when goods were supplied to defendant as per Entry 14 of schedule to the Indian Limitation Act 1963 and not from the date of end of financial year as provided in entry 1 of the schedule to Indian Limitation Act. In this regard, I rely upon Bharath Skins Corporation v. Taneja Skins Company Pvt. Ltd.,186 (2012) DLT 290 (DB) where in it is held as under:
"10. In order to find an answer to the question: Whether Arti cle 1 of the Schedule to the Limitation Act, 1963 applies to the present case, it is first required to be seen: Whether the account between the parties was a mutual account as en visaged in Article 1 of the Schedule to the Limitation Act, 1963, it not being in dispute that the account was current and open.
11. In the decision reported as AIR 1965 SC 1711, Ke sharichand Jaisukhlal v. The Shillong Banking Corporation, the Supreme Court defined the scope of the expression 'mutual' occurring in Article 85 of the Schedule to the Indian Limitation Act, 1908 (precursor to Article 1 of the Schedule to the Limitation Act, 1963) in the following terms:
The next point in issue is whether the proceedings are gov erned by Article 85 of the Indian Limitation Act, 1908, and if so, whether the suit is bared by limitation. The argument be fore us proceeded on the footing that an application un der Section 45(D) of the Banking Companies Act is gov erned by the Indian Limitation Act, and we must decide this case on that footing. But we express no opinion one way or the other on the question of the applicability of the Indian Limitation Act to an application under Section 45(D). Now, Article 85 of the Indian Limitation Act, 1908 provides that the period of limitation for the balance due on a mutual, open and current account, where there have been recipro cal demands between the parties is three years from the Suit (Com.) No. 1769/2022 Page No. 13 of 28 Anil Kumar Bansal Vs. Ganga Sagar Singh close of the year in which the last item admitted or proved is entered in the account such year to be computed as in the account. It is not disputed that the account between the par ties was at all times an open and current one. The dispute is whether it was mutual during the relevant period.
11. Now in the leading case of Hirada Basappa v. Gadigi Muddappa, (1871) VI Mad H C R 142, 144]. Holloway, Act ing C.J. observed:
To be mutual there must be transactions on each side creat ing independent obligations on the other, and not merely transactions which create obligations on the one side, those on the other being merely complete or partial discharges of such obligations.'
12. These observations were followed and applied in Tea Financing Syndicate Ltd. v. Chandrakamal Bezbaruah, I.L.R. [1931] 58 Cal. 642 and Monotosh K. Chatterjee v.
Central Calcutta Bank Ltd., [1953] 91 C.L.J. 16, and the first mentioned Calcutta case was approved by this Court in Hin dustan Forest Company v. Lal Chand, (1960) 1 SCR 563. Holloway, Acting C.J. laid down the test of mutuality on a construction of Section 8 of Act 14 of 1859, though that Sec tion did not contain the words "where there have been recip rocal demands, between the parties". The addition of those words in the corresponding Article 87 of Act 9 of 1871, Arti cle 85 of Act 15 of 1877 and Article 85 of the Act of 1908 adopts and emphasises the test of mutuality laid down in the Madras case.
13. In the instant case, there were mutual dealings between the parties. The respondent Bank gave loans on overdrafts, and the appellant made deposits. The loans by the respon dent created obligations on the appellant to repay them. The respondent was under independent obligations to repay the amount of the cash deposits and to account for the cheques, hundis and drafts deposited for collection. There were thus transactions on each side creating independent obligations on the other, and both sets of transactions were entered in the same account. The deposits made by the ap Suit (Com.) No. 1769/2022 Page No. 14 of 28 Anil Kumar Bansal Vs. Ganga Sagar Singh pellant were not merely complete or partial discharges of its obligations to the respondent. There were shifting balances on many occasions the balance was in favour of the appel lant and on many other occasions, the balance was in favour of the respondent. There were reciprocal demands between the parties, and the account was mutual. This mu tual account was fairly active up to June 25, 1947. It is not shown that the account ceased to be mutual thereafter. The parties contemplated the possibility of mutual dealings in fu ture. The mutual account continued until December 29, 1950 when the last entry in the account was made. It is con ceded on behalf of the appellant that if the account was mu tual and continued to be so until December 29, 1950, the suit is not barred by limitation, having regard to Section 45(o) of the Banking Companies Act. The Courts below, therefore, rightly answered issue No. 1 in the negative.
(Emphasis supplied)
12. From the aforesaid observations, it can be deduced that for the creation of an open, current and mutual account, there must be an intention between the parties, either ex press or implied, which may be deducible from the course of dealings to have mutual dealings, creating reciprocal obliga tions, independent of each other. A 'demand' in relation to a matter of account means a 'claim for money', arising out of a 'contractual business relationship' between the parties. Where the dealings between the parties disclose a 'single' contractual relationship, there will be demands only in favour of one party. For instance, where the relationship be tween 'A' and 'B' is that of lender and borrower respectively, 'A' will have a 'demand' against 'B' in respect of every item of loan advanced. But 'B' can have no demand against 'A'. Where the dealings between the parties disclose 'two' con tractual relationships, there will arise demands in favour of each side against the other. For instance, where 'A' ad vances money to 'B' from time to time as loan, and 'B' en gages 'A' as his agent for the sale of goods sent by 'B', Suit (Com.) No. 1769/2022 Page No. 15 of 28 Anil Kumar Bansal Vs. Ganga Sagar Singh there are two contractual relationships between the parties:
one, that of lender and borrower and the other, that of prin cipal and agent. 'A' as creditor may have several demands against 'B' who as principal may have, independently, sev eral demands against 'A'. The real test, therefore, to see whether there have been reciprocal demands in any particu lar case is to see: Whether there is a 'dual contractual rela tionship' between the parties.
13. Where 'A' sells goods to 'B' from timetotime and 'B' makes payments towards the price from timetotime, there is only a 'single' contractual relationship, namely that of buyer and seller, between the parties. 'A' has demands against 'B' for items sold, but 'B' can have no 'demands' against ' A'. Such case is not one of reciprocal demands and thus Article 85 of the Schedule to the Indian Limitation Act, 1908 corresponding to Article 1 of the Schedule to the Limitation Act, 1963 will not apply to suits on such ac counts. We are fortified in our view by the following observa tions made by the Supreme Court in the decision reported as AIR 1959 SC 1349, Hindustan Forest Company v. Lal Chand:
The learned Judge of the High Court who heard the suit held that Art. 115 had no application and dismissed the suit as barred by limitation. The sellers went up in appeal which was heard by two other learned Judges of the High Court. The learned Judges of the appellate Bench of the High Court held that Art. 115 of the Jammu & Kashmir Limitation Act applied and the suit was not barred. They thereupon al lowed the appeal and passed a decree in favour of the sell ers. The buyer has now come up in appeal to this Court.
5. Article 115 of the Jammu and Kashmir Limitation Act which is in the same terms as Art. 85 of the Indian Limitation Act except as to the period of limitation, is set out below:
6. If the article applied the suit would be clearly within time as the last item found to have been entered in the account was on June 23, 1947. The only question argued at the Bar is whether the account between the parties was mutual.Suit (Com.) No. 1769/2022 Page No. 16 of 28
Anil Kumar Bansal Vs. Ganga Sagar Singh
7. The question what is a mutual account, has been consid ered by the Courts frequently and the test to determine it is well settled. The case of the Tea Financing Syndicate Ltd. v.
Chandrakamal Bezbaruah, I.L.R. (1930) Cal. 649, may be referred to. There a company had been advancing monies by way of loans to the proprietor of a tea estate and the pro prietor had been sending tea to the company for sale and realisation of the price. In a suit brought by the company against the proprietor of the tea estate for recovery of the balance of the advances made after giving credit for the price realised from the sale of tea, the question arose as to whether the case was one of reciprocal demands resulting in the account between the parties being mutual so as to be governed by Art. 85 of the Indian Limitation Act. Rankin, C.J , laid down at p. 668 the test to be applied for deciding the question in these words:
There can, I think, be no doubt that the requirement of recip rocal demands involves, as all the Indian cases have de cided following Halloway, A.C.J , transactions on each side creating independent obligations on the other and not merely transactions which create obligations on one side, those on the other being merely complete or partial dis charges of such obligations. It is further clear that goods as well as money may be sent by way of payment. We have therefore to see whether under the deed the tea, sent by the defendant to the plaintiff for sale, was sent merely by way of discharge of the defendant's debt or whether it was sent in the course of dealings designed to create a credit to the de fendant as the owner of the tea sold, which credit when brought into the account would operate by way of setoff to reduce the defendant's liability.'
8. The observation of Rankin, C.J , has never been dis sented from in our Courts and we think it lays down the law correctly. The learned Judges of the appellate Bench of the High Court also appear to have applied the same test as that laid down by Rankin, C.J. They however came to the Suit (Com.) No. 1769/2022 Page No. 17 of 28 Anil Kumar Bansal Vs. Ganga Sagar Singh conclusion that the account between the parties was mutual for the following reasons:
The point then reduces itself to the fact that the defendant company had advanced a certain amount of money to the plaintiffs for the supply of grains. This excludes the question of monthly payments being made to the plaintiffs. The plain tiffs having received a certain amount of money, they be came debtors to the defendant company to this extent, and when the supplies exceeded Rs. 13,000 the defendant com pany became debtors to the plaintiff and later on when again the plaintiff's supplies exceeded the amount paid to them, the defendants again became the debtors. This would show that there were reciprocity of dealings and transac tions on each side creating independent obligations on the other.'
9. The reasoning is clearly erroneous. On the facts stated by the learned Judges there was no reciprocity of dealings there were no independent obligations.What in fact had happened was that the sellers had undertaken to make de livery of goods and the buyer had agreed to pay for them and had in part made the payment in advance. There can be no question that in so far as the payments had been made after the goods had been delivered, they had been made towards the price due. Such payments were in dis charge of the obligation created in the buyer by the deliver ies made to it to pay the price of the goods delivered and did not create any obligation on the sellers in favour of the buyer. The learned Judges do not appear to have taken a contrary view of the result of these payments.
10. The learned Judges however held that the payment of Rs. 13,000 by the buyer in advance before delivery had started, made the sellers the debtor of the buyer and had created an obligation on the sellers in favour of the buyer.
This apparently was the reason which led them to the view that there were reciprocal demands and that the transac tions had created independent obligations on each of the parties. This view is unfounded. The sum of Rs. 13,000 had Suit (Com.) No. 1769/2022 Page No. 18 of 28 Anil Kumar Bansal Vs. Ganga Sagar Singh been paid as and by way of advance payment of price of goods to be delivered. It was paid in discharge of obliga tions to arise under the contract. It was paid under the terms of the contract which was to buy goods and pay for them. It did not itself create any obligation on the sellers in favour of the buyer it was not intended to be and did not amount to an independent transaction detached from the rest of the con tract. The sellers were under an obligation to deliver the goods but that obligation arose from the contract and not from the payment of the advance alone. If the sellers had failed to deliver goods, they would have been liable to re fund the monies advanced on account of the price and might also have been liable in damages but such liability would then have arisen from the contract and not from the fact of the advances having been made. Apart from such failure, the buyer could not recover the monies paid in ad vance. No question has, however, been raised as to any de fault on the part of the sellers to deliver goods. This case therefore involved no reciprocity of demands. Article 115 of the Jammu and Kashmir Limitation Act cannot be applied to the suit.
14. In view of the above discussion, since the dealings be tween the parties disclose a single contractual relationship i.e. of buyer and seller between them, the account between them cannot be termed as a 'mutual' account. As a neces sary corollary, Article 1 of the Schedule to the Limitation Act, 1963 has no application in the present case.
22. Further, as per Section 18 of the Limitation Act, the period of the three years would extend from the date of last payment. Defendant made last payment on 10.12.2018 hence the limitation period for further three year and would expire on 9.12.2021 in normal circumstances however in this case, period from 15.03.2020 to 28.02.2022, plus 90 days is to be excluded from said period, in view of Judgment passed by Suit (Com.) No. 1769/2022 Page No. 19 of 28 Anil Kumar Bansal Vs. Ganga Sagar Singh the Hon'ble Supreme Court passed in Suo Motu writ petition (C) No. 3/2020 dated 10.01.2022 Relevant portion of the said Judgment is reproduced hereunder : "5.Taking into consideration the arguments advanced by learned counsel and the impact of the surge of the virus on public health and adversities faced by litigants in the prevailing conditions, we deem it appropriate to dispose of the M.A. No. 21 of 2022 with the following directions:
I. The order dated 23.03.2020 is restored and in continuation of the subsequent orders dated 08.03.2021, 27.04.2021and 23.09.2021, it is directed that the period from15.03.2020 till 28.02.2022 shall stand excluded for the purposes of limitation as may be prescribed under any general or special laws in respect of all judicial or quasi judicial proceedings.
II. Consequently, the balance period of limitation remaining as on 03.10.2021, if any, shall become available with effect from 01.03.2022.
III. In cases where the limitation would have expired during the period between 15.03.2020 till 28.02.2022, notwithstanding the actual balance period of limitation remaining, all persons shall have a limitation period of 90days from 01.03.2022. In the event the actual balance period of limitation remaining, with effect from 01.03.2022 is greater than 90 days, that longer period shall apply.
IV. It is further clarified that the period from 15.03.2020 till28.02.2022 shall also stand excluded in computing the periods prescribed under Sections 23 (4) and 29A of the Arbitration and Conciliation Act, 1996, Section 12A of the Suit (Com.) No. 1769/2022 Page No. 20 of 28 Anil Kumar Bansal Vs. Ganga Sagar Singh Commercial Courts Act, 2015 and provisos (b) and (c) of Section 138 of the Negotiable Instruments Act, 1881 and any other laws, which prescribe period(s) of limitation for instituting proceedings, outer limits (within which the court or tribunal can condone delay) and termination of proceedings".
23. Further, as per Section 12 of Commercial Courts Act, the period during which application for pre institute mediation filed by the plaintiff has remain pending will be excluded. From Non Starter Report it is evident that plaintiff made application for pre institution litigation on 23.2.2022 and the non starter report has been issued to the plaintiff on 23.5.2022 therefore said period will also be excluded from the period of limitation in view of Section 12 of the Commercial Courts Act. Hence, the limitation period would extend till 23.2.2024 in the case of plaintiff, whereas the suit has been filed on 14.7.2022. Hence, the suit is well within the period of limitation, therefore I decide issue No. 2 in favour of the plaintiff and against the defendant.
ISSUES NO. 3.
Whether plaintiff is entitled to recovery of Rs. 10,64,549/? OPP.
24. The plaintiff has alleged that he supplied the goods to the defendant and amount of said goods is due, hence the onus to prove this issue is upon the plaintiff.
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25. Sections 101 and 102 of Indian Evidence Act deal with burden of proof which are reproduced as under:
"101. Burden of proof.--Whoever desires any Court to give judgment as to any legal right or liability dependent on the existence of facts which he asserts, must prove that those facts exist. When a person is bound to prove the existence of any fact, it is said that the burden of proof lies on that person. Illustrations
(a) A desires a Court to give judgment that B shall be punished for a crime which A says B has committed. A must prove that B has committed the crime.
(b) A desires a Court to give judgment that he is entitled to certain land in the possession of B, by reason of facts which he asserts, and which B denies, to be true. A must prove the existence of those facts.
102. On whom burden of proof lies.--The burden of proof in a suit or proceeding lies on that person who would fail if no evidence at all were given on either side. Illustrations
(a) A sues B for land of which B is in possession, and which, as A asserts, was left to A by the will of C, B's father. If no evidence were given on either side, B would be entitled to retain his possession. Therefore the burden of proof is on A.
(b) A sues B for money due on a bond. The execution of the bond is admitted, but B says that it was obtained by fraud, which A denies. If no evidence were given on either side, A would succeed, as the bond is not disputed and the fraud is not proved. Therefore the burden of proof is on B".
26. Whereas Section 103 of The Indian Evidence Act are provides that burden of proof of a particular facts on that person who wants courts to believe existence of any particular facts. Section 103 is Suit (Com.) No. 1769/2022 Page No. 22 of 28 Anil Kumar Bansal Vs. Ganga Sagar Singh reproduced as under : "103.The burden of proof as to any particular fact lies on that person who wishes the Court to believe in its existence, unless it is provided by any law that the proof of that fact shall lie on any particular person."
"106.When any fact is especially within the knowledge of any person, the burden of proving that fact is upon him."
27. Hon,ble Supreme Court in Raghavamma and Anr. Vs. A. Chenchamma and Anr. (referring to Sections 101 to 103 explained the distinction between burden of proof and onus of proof in the following terms :
"There is an essential distinction between Burden of proof and onus of proof: burden of proof lies upon the person who has to prove a fact and it never shifts, but the onus of proof shifts. The burden of proof in the present case undoubtedly lies upon the plaintiff to establish the factum of adoption and that of partition. The said circumstances do not alter the incidence of the burden of proof. Such considerations, having regard to the circumstances of a particular case, may shift the onus of proof. Such a shifting of onus is a continuous process in the evaluation of evidence."
(16) The burden of proof that lies under Section 101 and that under Section 102 of the Evidence Act is distinguishable : the former has been described as a "legal" or "persuasive burden" and the latter as the evidential burden or as the "burden of adducing evidence" (Phipson). It is easy enough to say concerning the legal or persuasive burden that it lies on whichever party would fail if no Suit (Com.) No. 1769/2022 Page No. 23 of 28 Anil Kumar Bansal Vs. Ganga Sagar Singh evidence were given on either side or if the allegation to be proved is struck out of the record. But, as Rupert Cross points out "A moment's reflection should suffice to show that these tests arc only applicable to the evidential burden ; they cannot apply to the legal burden in all cases." "As a matter of commonsense", "the legal burden of proving all facts essential to their claims normally rests upon the plaintiff in a civil suit or that prosecutor in criminal proceedings"; it would go to such length as the burden of proof of the assertion still resting upon the plaintiff even "if the assertion of a negative is an essential part of the plaintiff's case." (Vide Bowen, L.J. in Abrath v. North Eastern Rail, Co., 1883 Ii Q.B.D. 440 at p. (457 a decision which was affirmed by the House of Lords in (1886) Ii A.C.
247). Cross explains the difficulty which may sometimes arise with regard to the question whether an assertion is essential to a party's case or that of the adversary by referring to the decision of the House of Lords in Joseph Constantine Steamship Line, Lid. v. imperial Smelting Corporation, Ltd. (1942 A.C. 154) (9). In that case the charterer of the ship claimed damages from the owners for failure to load ; the owners pleaded frustration of the contract by reason of the destruction of the ship owing to an explosion. The question of fact for determination was whether the explosion had been caused by the fault of the owner, but the evidence was scanty on this question. The House of Lords held that thc plaintiff had the legal burden of proving default when frustration of the contract was pleaded. In some cases, as Cross explains, it becomes necessary to ascertain the "legal burden of proof" even after consulting the precedents concerned with the various branches of substantive law. Even greater difficulty arises Suit (Com.) No. 1769/2022 Page No. 24 of 28 Anil Kumar Bansal Vs. Ganga Sagar Singh when the existence or nonexistence of any fact in issue may be known for certain by one of the parties and this is often said to have an important bearing on the incident of burden of proof of that fact. Reference in this connection is made by him to R. v. Turner, (1816) 5 m. & S. 206) where the accused was prosecuted for having pheasants and hares in his possession without the necessary qualification or authorization; ten possible qualifications had been mentioned in the relevant statute. The King's Bench held that it was unnecessary for the Crown to prove that these qualifications did not apply to the case. "
28. Now reverting back to the case, CW1 has categorically deposed that he is proprietor of M/s Mayank Enterprises and is in business of sale purchase of oil. The defendant placed order for supply of fuel oil / rubber processed oil to the plaintiff as per their requirement and plaintiff supplied the goods through various invoices over a period of time for sale consideration total amounting to Rs. 69,09,077/ and as per the said account, a sum of Rs. 6,59,164/ is balance and further, the defendant was required to make payment within 30 days otherwise he will be liable to pay interest @ 18% per annum w.e.f. 10.12.2018 till 10.5.2022 and thus is liable to pay a total amount of Rs. 10,64,549/ to the plaintiff. The defendant in the written statement has not denied that the goods through aforesaid invoices were not supplied to the plaintiff or that the defendant has made more payment than what has been shown in ledger Ex. CW1/2 by the plaintiff.
29. Further, plaintiff / CW1 has also proved invoice Ex. CW1/1A to Ex. CW1/1J regarding for supply of goods and amount received Ex.
Suit (Com.) No. 1769/2022 Page No. 25 of 28Anil Kumar Bansal Vs. Ganga Sagar Singh CW1/2. He also proved ledger account maintained by him regarding dealing with defendant. From the ledger account it is evident that a sum of Rs. 6,59,164/ was due on 10.12.2018. In the cross examination of the plaintiff / CW1, no suggestion has been given by the counsel for the defendant that the goods through invoices Ex. CW1/1A to Ex. CW1/1J were not supplied or that he has paid more amount than what has been shown in the ledger account. Hence, in these circumstances, the plaintiff is able to prove that he has supplied the goods to the defendant for a sum of Rs. 69,09,077/ and an amount of Rs. 6,59,164/ is balance as on 10.12.2018.
30. As far as testimony of defendant is concerned, the defendant's witness Sh. Pramod Singh though has deposed that the plaintiff has not supplied the goods to the defendant but has not specified goods of which invoice was not received by the defendant. Since the defendant in the written statement has not specifically denied of receipt of any of goods from the plaintiff and making payment by the defendant to the plaintiff. Therefore the defendant's testimony cannot be accepted that goods as mentioned in invoices Ex. CW1/1A to Ex. CW1/1J were not supplied to the defendant. The defendant has also failed to explain if no goods were supplied by the plaintiff why the defendant was making payments as shown in the ledger Ex. CW1/2. He has not given any suggestion that payment as shown in ledger was not made by him. Therefore, in these circumstances, I do not find testimony of DW1 reliable that no goods were supplied by the plaintiff to the defendant or that the entries made by the plaintiff in its ledger Ex. CW1/2 Suit (Com.) No. 1769/2022 Page No. 26 of 28 Anil Kumar Bansal Vs. Ganga Sagar Singh was false or fabricated.
31. In view of the aforesaid facts and circumstances, I held that the plaintiff has been able to prove by preponderance of probability that he has supplied goods to the defendant for a total sum of Rs. 69,09,077/ and defendant has made payment of Rs. 62,49,913/ and thus, an amount of Rs. 6,59,164/ was due as on 10.12.2018.
32. As far as interest is concerned, in the invoice clause there is specific column that "interest @ 18% p.a. will be charged if the payment is not made within the stipulated time" but the ledger account of plaintiff shows that the defendant was not making the payment invoices wise but was making part payment which plaintiff used to adjust in the total dues of defendant hence, this ledger shows that plaintiff does not intend to act upon the interest term as mentioned in invoice. Hence, the plaintiff is not entitled for 18% interest on the said amount but since the defendant has deprived the plaintiff from use of his money and has wrongfully gained himself and cause wrongful loss to the plaintiff, the defendant must pay the interest and considering the bank rate of interest, plaintiff will be entitled to recover interest @ 10% per annum from the defendant on the said amount from the date of demand of said amount which is the date of legal notice i.e. 2.9.2021. Hence, I held that the plaintiff will be entitled to recover interest 10% per annum on the amount of Rs. 6,59,164/ from 2.9.2021 till the date of filing of the suit. Issue No. 3 is decided accordingly.
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33. ISSUES NO. 4.
Whether plaintiff is entitled to pendente lite and future interest? If so, at what rate and for which period? OPP.
As stated above, since the defendant has deprived the plaintiff from use of his money and wrongfully gained himself and cause loss to the plaintiff therefore the plaintiff is also entitled to pendente lite and future interest hence, I order that the plaintiff will be entitled to recover interest @ 10% per annum on the decretal amount from the date of filing of the suit till the date of decree and thereafter till its realization.
34. RELIEF.
In view of my findings on aforesaid issues, the suit of the plaintiff is decreed against the defendant for an amount of Rs. 6,59,164/ along with interest @ 10% per annum from 2.9.2021 till filing of the suit. Further, the plaintiff will be entitled to recover pendente lite and future interest at the same rate from the date of filing of the suit till the date of decree and thereafter till its realization. Plaintiff is further held entitled to the proportionate costs. Decree sheet be prepared accordingly. File be consigned to record room.
Announced in the open court (Sanjeev Kumar Aggarwal)
on 20.11.2023 DJ (Commercial)01, Central,
THC/Delhi / 20.11.2023
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