Delhi District Court
Gopal vs M/S Axis Innovations Pvt Ltd on 29 October, 2025
IN THE COURT OF SHRI DEVENDER KUMAR, DISTRICT JUDGE
(COMMERCIAL COURT-01), EAST DISTRICT
KARKARDOOMA COURTS : DELHI
CS (Comm) No. 129/2024
Sh. Gopal
S/o Sh. Trilok Ram
Prop. Of M/s Servo Sine Systems
At : 56, Ganesh Nagar, Extension-II,
Shakar Pur, Delhi-110092 ................Plaintiff
Versus
1. M/s Axis Innovations Pvt. Ltd.
Regd. Off: Office No. 7, Ground Floor,
43, Hasanpur, I.P. Extension,
Patparganj, Delhi -110092
2. Smt. Riti Rastogi
Director of M/s Axis Innovations Pvt. Ltd.
Regd. Off: Office No. 7, Ground Floor,
43, Hasanpur, I.P. Extension,
Patparganj, Delhi -110092
Also at : H-704, VVIP Address
Raj Nagar Extension, Ghaziabad,
UP -201017
3. Sh. Kishan Raj Rastogi
Director of M/s Axis Innovations Pvt. Ltd.
Regd. Off: Office No. 7, Ground Floor,
43, Hasanpur, I.P. Extension,
Patparganj, Delhi -110092
Also at : H-704, VVIP Address
Raj Nagar Extension, Ghaziabad,
UP -201017 ............Defendants
Digitally signed
by DEVENDRA
CS (Comm) No. 129/2024 KUMAR
Gopal Vs. Axis Innovations Pvt. Ltd. & Ors.
DEVENDRA 1/33
Date:
KUMAR 2025.10.29
17:00:41
+0530
Date of institution : 23.04.2024
Date of reserving judgment : 23.09.2025
Date of judgment : 29.10.2025
JUDGMENT :-
1. Vide this judgment, I shall dispose of this suit for recovery of Rs. 5,14,458/- along with interest @ 12% per annum filed by the plaintiff against the defendants. Brief Facts of the case are as under: -
2. Plaintiff has alleged that he is running a proprietorship firm in the name and style of M/s. Servo Sine Systems and engaged in the business of manufacturing and supplying of stabilizers and other material, whereas defendant no. 1 is a private limited company and defendant nos. 2 and 3 are its directors and are responsible for day-to-day affairs of the defendant no. 1. It is further alleged that the defendant no. 1 through defendant nos. 2 & 3 placed workorders to the plaintiff time to time to purchase stabilizers and same were supplied and the plaintiff raised invoices against each and every order placed by the defendants. It is further alleged that the plaintiff- maintained ledger accounts of the defendants in the course of business and as per ledger accounts, as on 03.12.2018, an amount of Rs. 5,24,458/- was outstanding towards the defendants.
2.1. Plaintiff has further alleged that the defendants were delaying the payments therefore he decided to sue the defendants but the defendants came to know about it and contacted him in the month of October, 2019 and requested that their financial condition was not good and sought one year to make payment, which was granted. It is further alleged that the Digitally signed CS (Comm) No. 129/2024 by DEVENDRA Gopal Vs. Axis Innovations Pvt. Ltd. & Ors. DEVENDRA KUMAR 2/33 KUMAR Date:
2025.10.29 17:00:47 +0530 defendants again requested for more time citing Covid-19 situation, which was again allowed. Again, on 01.06.2021, the defendants requested for more time of year period citing unstable market conditions which was again granted. However, since June, 2022 onwards, the defendants lingered on to clear outstanding amount and failed to pay outstanding amount. After a great persuasion and continuous requests, the defendant no. 3 agreed to pay Rs. 10,000/- in cash on 20.03.2023 and still an outstanding amount of Rs. 5,14,458/- is due towards the defendants.
2.2. Plaintiff has further alleged that on 20.04.2023, he again contacted the defendant no. 3 to pay balance amount but he threatened not to make any further payment, due to the plaintiff served a legal notice dated 17.07.2023, which was duly served upon the defendants but still they failed to make payment. It is further alleged that on 05.08.2023, the plaintiff approached to DLSA, East for pre institution mediation but the defendants failed to turn up and dispute returned as non-starter vide report dated 19.08.2023. It is further alleged that as per statement of account/ ledger, the defendants are liable to pay Rs. 5,14,458/- along with interest @ 12% per annum and the plaintiff has prayed for a decree of suit amount.
3. Defendants were duly served and have filed their joint written statement thereby alleging that this suit is barred by limitation, as the defendants have neither acknowledged liability nor made any part payment to extend the period of limitation of three years, due to this suit is liable to be dismissed. It is further alleged that the plaintiff has falsely alleged that the defendant no. 3 paid Rs. 10,000/- in cash on 20.03.2023, otherwise no Digitally signed by DEVENDRA KUMAR CS (Comm) No. 129/2024 DEVENDRA Date: Gopal Vs. Axis Innovations Pvt. Ltd. & Ors. KUMAR 2025.10.29 3/33 17:00:54 +0530 such payment was ever made and last transaction between the parties was on 03.12.2018, whereas suit has been filed on 16.01.2024, due to this suit is liable to be dismissed.
3.1. Defendants have further alleged that the plaintiff has concealed the material facts, otherwise the defendants were not end customers and they had oral agreement to sell the products of the plaintiff on commission basis @ 10% of billing value and commission was paid in cash upto 31.03.2018, but, thereafter, the plaintiff stopped making payment and amount of Rs. 4 Lacs qua commission became outstanding till September, 2018 and was to be paid by 01.09.2019, whereas the plaintiff failed to pay and the defendants stopped selling products of the plaintiff. It is further alleged that in the month of December, 2018, the plaintiff himself agreed to set off commission amount qua the amount of material supplied by the plaintiff, due to nothing remained outstanding and this suit is not maintainable. Defendants have denied all the allegations of the plaintiff qua supply of material and making of part payment and have prayed that this suit is liable to be dismissed.
4. Plaintiff has filed replication to WS thereby denying all allegations of the defendants and has reaffirmed the pleadings.
5. On the basis of pleadings of the parties, the following issues were framed vide order dated 22.10.2024 as under:
ISSUES
1.Whether the plaintiff is entitled for a decree of recovery of Rs.
5,14,458/- against the defendant? OPP Digitally signed CS (Comm) No. 129/2024 by DEVENDRA Gopal Vs. Axis Innovations Pvt. Ltd. & Ors. KUMAR 4/33 DEVENDRA Date:
KUMAR 2025.10.29
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2. Whether the plaintiff is entitled for any interest ? If so, at what rate and for which period? OPP
3. Whether the suit is barred by limitation? OPD
4. Relief.
6. To prove case, the plaintiff has examined PW1 Vijay Kumar from GSTO, who has proved GST record of the plaintiff Ex. PW1/1 (colly) and certificate under Section 65B of Indian Evidence Act Ex.PW1/2.
6.1. Plaintiff has examined himself as PW2 and has deposed in verbatim of the plaint and has relied upon the documents Ex.PW2/1 to Ex.PW2/12.
6.2. During cross-examination, PW2 has deposed that he has been manufacturing stabilizers since the year 2013 and the defendant's further sale the stabilizers purchased from the plaintiff. It is further deposed that he never sold goods against vouchers and only invoices were raised and even cash payment was not received and only online payment through cheque in account was accepted by him. It is further deposed that last goods were supplied to the defendants against invoice dated 09.10.2018, whereas an amount of Rs. 61,628/- was received from the defendant on 03.12.2018. It is further deposed that goods against invoice dated 09.10.2018 were delivered on the same day and he maintained statement of accounts/ ledger of the firm. It is further deposed that he did not meet advocate for serving legal action in October, 2019 and did not serve any legal notice to the defendant in October, 2019. It is further deposed that the defendants did not make any request in writing for extension of time for making payment, nor he demanded any written request from the defendants. It is denied that he Digitally signed by DEVENDRA CS (Comm) No. 129/2024 KUMAR Gopal Vs. Axis Innovations Pvt. Ltd. & Ors. DEVENDRA 5/33 Date:
KUMAR 2025.10.29
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did not ask for assurance in writing from the defendants to make payment as his accounts had already been settled with the defendant. It is admitted that he did not remember date, month and year when the defendants requested him to make payment after normalization of situation during Covid, but they made such request when he met them in their office.
6.3. PW1 has admitted that he did not issue any receipt of Rs. 10,000/- to the defendant no. 3, as he collected the amount from their office at Hasanpur on 20.03.2023. It is denied that he never met the defendant no. 3 on 20.03.2023 nor he paid any amount. It is further deposed that details mentioned in the statement of accounts under headings of vouchers are in fact details of invoices raised by the plaintiff and against the defendants. It is further admitted that numbers of vouchers mentioned regarding receipts of amount in statement of accounts Ex.PW2/4 are system generated and no separate vouchers were prepared by him.
7. Defendants have examined DW1 Kishan Raj Rastogi, Director of defendant company, who has deposed in verbatim of written statement during examination in chief and has not proved any document.
7.1. During cross examination, DW1 has deposed that dealings of the plaintiff and defendants were not account to account and some were in cash. It is further deposed that he maintained account of dealings during 2015 to Dec, 2018 but has not placed on record details of such cash dealings. It is denied that he had dealings with the plaintiff from 01.09.2019 onwards as well, as mentioned in Para 4 of his affidavit Ex.
Digitally signed by DEVENDRA CS (Comm) No. 129/2024 Gopal Vs. Axis Innovations Pvt. Ltd. & Ors.
DEVENDRA KUMAR
6/33
KUMAR Date:
2025.10.29
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DW1/A. It is further deposed that he used to purchase goods from the plaintiff on credit basis and there was no fix time for making payment qua the goods purchased. It is admitted that the goods were purchased vide invoice no. 28 dt. 07.06.2015, part of Ex. PW2/2 by him and bears his signature.
7.2. DW1 has further admitted that the goods were purchased by the defendants vide Invoice No. 104 dt. 17.12.2016, Invoice No. 115 dt. 07.01.2017, Invoice No. 163 dt. 28.07.2018, Invoice dt. 03.11.2014, Invoice No. 033 dt. 15.12.2014, Invoice No. 3 dt. 18.04.2015, Invoice No. 02 dt. 18.04.2015, Invoice No. 014 dt. 16.07.2015, Invoice No. 6 dt. 14.05.2015, Invoice No. 05 dt. 14.05.2015, Invoice No. 01 dt. 01.04.2016, Invoice No. 02 dt. 01.05.2016, Invoice No. 07 dt. 18.05.2016, Invoice No. 06 dt. 18.05.2016, Invoice No. 13 dt. 07.06.2016, Invoice No. 49 dt. 23.01.2017, Invoice No. 55 dt. 23.02.2017, Invoice No. 56 dt. 02.03.2017, Invoice No. 59 dt. 27.03.2017, Invoice No. 002 dt. 05.04.2017, Invoice No. 003 dt. 05.04.2017, Invoice No. 010 dt. 11.05.2017, Invoice No. 021 dt. 17.06.2017, Invoices at Page 25 to 46, part of Ex. PW2/2 (colly). It is further admitted that he also sold out some goods to the plaintiff through bills and can produce account statement of his company pertaining to the dealing with the plaintiff since from 2014 till last dealing (No statement produced). It denied that an amount of Rs. 5,14,458/- is outstanding towards the defendants.
7.3. DW1 has further deposed that his company was commission agent of the plaintiff and he has not worked personally as commission agent. It is Digitally signed by DEVENDRA KUMAR CS (Comm) No. 129/2024 DEVENDRA Date: Gopal Vs. Axis Innovations Pvt. Ltd. & Ors. KUMAR 2025.10.29 7/33 17:01:25 +0530 further deposed that the defendant no.1 worked on commission basis for a period from 2014 to 2018. It is further deposed that his company was working on 10% commission basis against sale of the plaintiff but there was no written agreement to this effect and was only oral agreement. It is further deposed that his company never issued any debit note for commission to the plaintiff and whenever the plaintiff issued bill, he adjusted commission against said bill, whereas Ex. PW2/2 (Colly.) has not reflected any such adjustment. It is further deposed that he used to maintain ledger but commission is not reflected in ledger account of the plaintiff Ex. PW2/4. It is further admitted that entries at point A and B in Ex. PW2/4 are not pertaining to his company and did not remember whether he has mentioned in pleadings that his company was getting 10% commission from the plaintiff. It is further admitted that his company was purchasing goods and paying GST. It is further admitted that his company was selling goods purchased from the plaintiff to its customer further and was charging GST f and customers were paying bills to his company directly. It is further deposed that warranty against the goods was extended by the plaintiff besides delivery and installation to the goods to customer of his company. It is denied that the plaintiff company was liable to extend warranty against goods supplied to his company only and not qua customers of the defendant company.
7.4. DW1 has further deposed that he has no document to prove that amount of Rs. 4,00,000/- till September 2018 was outstanding towards the plaintiff qua commission as dealings were on rough (Kacha) papers. It is denied that the plaintiff was not working with his company on commission Digitally signed by DEVENDRA CS (Comm) No. 129/2024 DEVENDRA KUMAR Gopal Vs. Axis Innovations Pvt. Ltd. & Ors. 8/33 KUMAR Date: 2025.10.29 17:01:34 +0530 basis so he cannot produce any documents to this effect. There was a set off of Rs. 4,00,000/- in the month of September/October/November 2018 regarding commission of his company. It is admitted that outstanding balance of Rs. 4,00,000/- of the plaintiff was due towards his company upto the month of September/October/November 2018, but he cannot say whether amount of Rs. 4,00,000/- was qua material supplied by the plaintiff company to defendant company.
7.5. DW1 has further deposed that his company was not receiving goods from the plaintiff directly and the goods were being supplied to his customers directly and he never remained present at the time of supply of goods to customers by the plaintiff. It is admitted that customers to whom goods were supplied by the plaintiff through his company used to acknowledge goods and to sign invoice/s but he has no details of such customers to whom goods were sold out by the plaintiff through his company. It is denied that the plaintiff never supplied goods to any customer through his company and he signed Ex. PW2/2 in the factory of the plaintiff itself where he used to sit and deal with.
8. I have heard the arguments and perused the record. Before giving my finding on issues, it is necessary to ascertain representation of the defendants before this court. Admittedly, the defendant no.1 is a Private Limited Company and defendant no. 2 & 3 are its directors. In case of a Private Limited Company, it has to be determined, as to whether the company is being represented through Authorized Representative or not.
Digitally
signed by
DEVENDRA
DEVENDRA KUMAR
CS (Comm) No. 129/2024 KUMAR
Gopal Vs. Axis Innovations Pvt. Ltd. & Ors.
Date: 9/33
2025.10.29
17:01:40
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8.1. Authority on Behalf of Defendant No.1 to Contest Case- Admittedly, a civil suit may be instituted or defended by a company / corporation through its Authorized Representative. Written Statement is part of the pleadings in terms of Section 26 r/w Order 6 Rule 1 of CPC and the pleadings includes Written Statement also. Order 29 Rule 1 of CPC authorizes Secretory or Director or Principal officer of the corporation to sign the pleadings on its behalf. Order 29 Rule 1 is as under:
Order 29 Rule 1. Subscription and verification of pleading.-- In suit by or against a corporation, any pleading may be signed and verified on behalf of the corporation by the secretary or by any director or other principal officer of the corporation who is able to depose to the facts of the case.
8.2. In view of Order 29 Rule1 of CPC, it is clear that the authorities mentioned therein may sign and verify pleadings besides Authorized Representatives appointed by the corporation on its behalf through Board Resolution. The authority of recognized agents has been prescribed under Order 3 Rule 1 & 2 of CPC as under:
Rule 1. Appearances, etc., may be in person, by recognized agent or by pleader.--Any appearance, application or act in or to any Court, required or authorized by law to be made or done by a party in such Court, may, except where otherwise expressly provided by any law for the time being in force, be made or done by the party in person, or by his recognized agent, or by a pleader [appearing, applying or acting, as the case may be, on his behalf :
Provided that any such appearance shall, if the Court so directs, be made by the party in person.
Rule 2. Recognised agents.--The recognised agents of parties by whom such appearances, applications and acts may be made or done are--
Digitally
signed by
DEVENDRA
DEVENDRA KUMAR
CS (Comm) No. 129/2024 KUMAR Date:
Gopal Vs. Axis Innovations Pvt. Ltd. & Ors. 2025.10.29 10/33
17:01:47
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(a) persons holding powers-of-attorney, authorising them to make and do such appearances, applications and acts on behalf of such parties;
(b) persons carrying on trade or business for and in the names of parties not resident within the local limits of the jurisdiction of the Court within which limits the appearance, application or act is made or done, in matters connected with such trade or business only, where no other agent is expressly authorised to make and do such appearances, applications and acts.
8.3. In view of abovesaid legal proposition, it stands proved that Recognized Representative may be authorized by way of Power of Attorney / Resolution of Board of Directors in terms of Section 291 of Companies Act, 1956 (Now corresponding section under Companies Act, 2013). The authority of Authorized Representative under Order 3 Rule 1 & 2 CPC viz-a-viz signing authority of Authorized Representative under Order 29 rule 1 & 2 of CPC has been defined in case titled Nibro Ltd. v. National Insurance Co. Ltd., (1991) 70 Comp Cas 388 (Delhi) as under:
Order 3, rule 1 provides that any appearance, application or act in or to any court required or authorise by law can be made or done by the party in person or by his recognized agent or by a pleader appearing, applying or acting, as the case may be, on his behalf. Provided of course, such an appearance, application or act in or to any court is required or authorised by law to be done or done by a party in such court. Where, however, there is an express provision of law, then that provision will prevail. Thus, if an authority is given to a pleader or a recognised agent as provided by law, the recognised agent or pleader can file an appearance or file a suit in court if the party himself is not in a position to file it. In my view, if a party is a company or a corporation, the recognised agent or a pleader has to be authorise by law to file such a plaint. Such an authority can be given to a pleader or an agent in the case of a company by a person specifically authorised in this behalf. In other words, a pleader or an agent can be authorised to file a suit on behalf of a company only by an authorised representative of the company. If a director or a secretary is authorised by law, then he can certainly give the authority to another person as provided under Order 3, rule 1.
Digitally
signed by
DEVENDRA
CS (Comm) No. 129/2024 DEVENDRA KUMAR
Gopal Vs. Axis Innovations Pvt. Ltd. & Ors. 11/33
KUMAR Date:
2025.10.29
17:01:55
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The authority of a principal officer of a company in relation to suits filed on behalf of the limited company does not extend beyond what is laid down in Order 29 of the Code of Civil Procedure. That provision does not entitle the principal officer of a company to file a suit on its behalf and for that the authority has to be found either in the articles of association of the company or in the resolution of its board of directors. In the articles of association of several companies, provision is generally made authorising their managing directors and other officers to file and defend suits on their behalf. Similarly, the board of directors of a company can authorise the institution of a suit on behalf of the company by a resolution. In the case of some companies the articles empower the managing director or directors to appoint general attorneys and general managers and given them authority to institute suits on behalf of the company. But in the absence of any proof in regard to any such power having been conferred on Shri Ram Lal Choudhary, it is not possible to accept his statement that he was authorised to file the suit as the principal officer of the plaintiff hotel.
It is well-settled that under section 291 of the Companies Act except where express provision is made that the powers of a company in respect of a particular matter are to be exercised by the company in general meeting, in all other cases the board of directors are entitled to exercise all its powers. Individual directors have such powers only as are vested in them by the memorandum and articles. It is true that ordinarily the court will not unsuit a person on account of technicalities. However, the question of authority to institute a suit on behalf of a company is not a technical matter. It has far- reaching effects. It often affects the policy and finances of the company. Thus , unless a power to institute a suit is specifically conferred on a particular director, he has no authority to institute a suit on behalf of the company. Needless to say such a power can be conferred by the board of directors only by passing a resolution in that regard.
8.4. Further, in a landmark judgment titled United Bank of India v. Naresh Kumar, (1996) 6 SCC 660, it has held that;
9. In cases like the present where suits are instituted or defended on behalf of a public corporation, public interest should not be permitted to be defeated on a mere technicality. Procedural defects which do not go to the root of the matter should not be permitted to defeat a just cause. There is sufficient power in the courts, under the Code of Civil Procedure, to ensure that injustice is not done to any party who has a just case. As far as possible a substantive right should not be allowed to be defeated on account of a procedural irregularity which is curable.
Digitally signed by DEVENDRA CS (Comm) No. 129/2024 DEVENDRA KUMAR Gopal Vs. Axis Innovations Pvt. Ltd. & Ors. KUMAR Date: 12/33 2025.10.29 17:02:03 +0530
10. It cannot be disputed that a company like the appellant can sue and be sued in its own name. Under Order 6 Rule 14 of the Code of Civil Procedure a pleading is required to be signed by the party and its pleader, if any. As a company is a juristic entity it is obvious that some person has to sign the pleadings on behalf of the company. Order 29 Rule 1 of the Code of Civil Procedure, therefore, provides that in a suit by or against a corporation the Secretary or any Director or other Principal Officer of the corporation who is able to depose to the facts of the case might sign and verify on behalf of the company. Reading Order 6 Rule 14 together with Order 29 Rule 1 of the Code of Civil Procedure it would appear that even in the absence of any formal letter of authority or power of attorney having been executed a person referred to in Rule 1 of Order 29 can, by virtue of the office which he holds, sign and verify the pleadings on behalf of the corporation. In addition thereto and dehors Order 29 Rule 1 of the Code of Civil Procedure, as a company is a juristic entity, it can duly authorise any person to sign the plaint or the written statement on its behalf and this would be regarded as sufficient compliance with the provisions of Order 6 Rule 14 of the Code of Civil Procedure. A person may be expressly authorised to sign the pleadings on behalf of the company, for example by the Board of Directors passing a resolution to that effect or by a power of attorney being executed in favour of any individual. In absence thereof and in cases where pleadings have been signed by one of its officers a corporation can ratify the said action of its officer in signing the pleadings. Such ratification can be express or implied. The court can, on the basis of the evidence on record, and after taking all the circumstances of the case, specially with regard to the conduct of the trial, come to the conclusion that the corporation had ratified the act of signing of the pleading by its officer.
13. The court had to be satisfied that Shri L.K. Rohatgi could sign the plaint on behalf of the appellant. The suit had been filed in the name of the appellant company; full amount of court fee had been paid by the appellant-Bank; documentary as well as oral evidence had been led on behalf of the appellant and the trial of the suit before the Sub- Judge, Ambala, had continued for about two years. It is difficult, in these circumstances, even to presume that the suit had been filed and tried without the appellant having authorised the institution of the same. The only reasonable conclusion which we can come to is that Shri L.K. Rohatgi must have been authorised to sign the plaint and, in any case, it must be held that the appellant had ratified the action of Shri L.K. Rohatgi in signing the plaint and thereafter it continued with the suit.
Digitally signed by DEVENDRACS (Comm) No. 129/2024 DEVENDRA KUMAR
Gopal Vs. Axis Innovations Pvt. Ltd. & Ors. 13/33
KUMAR Date:
2025.10.29
17:02:08 +0530
8.5. A combined reading of both abovesaid judgments made it clear that the pleadings must be signed by authorities mentioned under Order 29 Rule 1, or by any Authorized Agent / Representative. The authorization of any authorized representative may be in terms of Order 3 Rule 2 of CPC, or by the company through Resolution of Board of Directors in terms of Section 291 of Companies Act, 1956 (or corresponding section under Companies Act, 2013). However, authority of a person/s mentioned under Order 29 Rule 1 of CPC to sign pleadings must be proved either through Article of Association, or Resolution of Board of Directors, as held in case titled State Bank of Travancore v. Kingston Computers (I) (P) Ltd. , (2011) 11 SCC 524 as under:
14. In our view, the judgment under challenge is liable to be set aside because the respondent had not produced any evidence to prove that Shri Ashok K. Shukla was appointed as a Director of the Company and a resolution was passed by the Board of Directors of the Company to file a suit against the appellant and authorised Shri Ashok K. Shukla to do so. The letter of authority issued by Shri Raj K. Shukla, who described himself as the Chief Executive Officer of the Company, was nothing but a scrap of paper because no resolution was passed by the Board of Directors delegating its powers to Shri Raj K. Shukla to authorise another person to file a suit on behalf of the Company.
13. The Division Bench of the High Court did take cognizance of the fact that the Company had not summoned any witness from the office of the Registrar of Companies to prove that Shri Ashok K. Shukla was a Director of the Company and that the minute book of the Company had not been produced to prove the appointment of Shri Ashok K. Shukla as a Director, but reversed the finding of the trial court on Issue 1 on the basis of the authority letter issued by Shri Raj K. Shukla and resolutions dated 14-2-2001 and 19-4-2001, by which the Board of Directors of the Company had authorised some persons to operate the bank account.Digitally signed by DEVENDRA KUMAR CS (Comm) No. 129/2024
DEVENDRA Date:
Gopal Vs. Axis Innovations Pvt. Ltd. & Ors. KUMAR 2025.10.29 14/33 17:02:45 +0530 8.6. However, in this case, Written Statement, which is part of pleadings, has been signed by the defendant no.3 in the capacity of Director, whereas no Board Resolution or Article of Association has been proved or placed on record to prove that the defendant no.3 is existing Director of the defendant no.1 to sign it, due to Written Statement filed on behalf of the defendant no.1 by the defendant no.3 cannot be considered. In fact, it shall be considered that the defendant no.1 has no representation before this court and its plea cannot be considered. Not only this, no Board Resolution has been filed or proved on record to prove authority of the defendant no.3 to represent the defendant no.1 / company and the defendant no.1 has no defense on merit.
8.7. So far as the defendant nos. 2 & 3 are concerned, they have been impleaded in their personal capacity as well as Directors of the defendant no.1 and the plaintiff has alleged to dealt with them personally, due to Written Statement on their behalf may be considered to contest this case.
9. Now merit of the case may be seen. My issue wise findings are as under:
ISSUE NO. 3: - I am taking up issue no. 3 first, as it is pertaining to the maintainability of this case. The onus to prove this issue was fixed upon the defendants and to discharge the onus, the defendants have examined DW1 Kishan Raj Rastogi and have also cross examined PWs. Plaintiff has filed this suit for recovery of price of the goods supplied way back upto 03.12.2018 as mentioned in ledger. Plaintiff has mentioned the cause of action to file this suit in Para 19 of the plaint as under:Digitally signed by DEVENDRA
CS (Comm) No. 129/2024 KUMAR
DEVENDRA
Gopal Vs. Axis Innovations Pvt. Ltd. & Ors. Date: 15/33
KUMAR 2025.10.29
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"Cause of action arose on the date and time whenever the plaintiff supplied the goods as per the order to the defendants which were duly received by the defendants and it again arose on the date and time whenever during the course of business dealing and amount of Rs.
5,24,458/- became due towards the defendants. It again arose on the date and time whenever the plaintiff requested from the defendants to clear their outstandings dues but the defendants taken time in making the dues clear....it again arose on 20.03.2023 when the defendant no.3 after great persuasion and request of the plaintiff made a part payment of Rs. Ten Thousand towards the outstanding dues and further agreed to refund the balance payment of the plaintiff in the monthly installments of Rs. Ten Thousand only. It again arose on 24.04.2023 when the plaintiff requested the defendants to pay the monthly installment out of the dues amount but the defendants threatened the plaintiff and refused to pay any amount to the plaintiff. It again arose on 17.07.2023 the plaintiff sent legal demand notice calling upon the defendants to clear the dues amount but despite the service of the legal notice the defendants failed to pay the outstanding dues to the plaintiff. It again arose on 05.08.2023 the plaintiff raised his claim against the defendants in the East District Legal Service Authority, Karakardooma Courts, Delhi by way of filing of an application. It again arose on the date and time when on 19.08.2023 the plaintiff received non-starter report from the East District Legal Service Authority as the defendants did not participate in pre-mediation despite the service of the notice. As the amount of the plaintiff along with interest is still due towards the defendants hence the cause of action is still subsisting In view of abovesaid paragraph, it is clear that the cause of action firstly arose with supply of the goods and continued till serving of legal notice upon the defendants.
10. Ld. Counsel for defendants has argued that this suit is barred by limitation, as transactions between the parties are pertaining to the years to 2015-2018, which are duly supported by invoices Ex.PW2/2 (colly), whereas this suit has been filed on 23.04.2024, which is admittedly barred by limitation. It is further argued that even ledger Ex.PW2/4 has also not been maintained in the regular course of business, as admitted by PW2, due Digitally signed by DEVENDRA CS (Comm) No. 129/2024 KUMAR Gopal Vs. Axis Innovations Pvt. Ltd. & Ors.
DEVENDRA 16/33Date:
KUMAR 2025.10.29
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to this suit based upon ledger is liable to be dismissed. It is further argued that if any entry of ledger is beyond transactions, then entire ledger becomes doubtful and entries of such ledger must be proved by supporting some documents, otherwise suit cannot be maintained on the basis of doubtful ledger. It is further argued that PW2 has admitted that he was not accepting payments in cash, whereas in Para 10 of the plaint, the plaintiff has alleged that the defendant no. 3 approached to the plaintiff on 20.03.2023 and paid cash payment of Rs. 10,000/- after great persuasion and continuous requests, which during cross examination of PW1, he has deposed that he approached to the defendants in their office at Hasanpur on 20.03.2023 and received this payment. It is further argued that both versions of the plaintiff are contradictory and could not prove part payment by the defendant no.3. It is further argued that even if it is assumed that any such part payment was made, then also it was beyond the period of limitation, due to such part payment could not extend the period of limitation and this suit is barred by limitation.
11. Ld. Counsel for defendants has relied upon judgments titled XS Infosol Pvt. Ltd. v. GLS Technologies Pvt. Ltd., 2018 SCC OnLine Del 6601, Virender Kumar Jain v. Alumate (India) Pvt. Ltd., 2012 SCC OnLine Del 1313, National Minorities Development v. Mukherjeepara Sanmilita Pallibashi, RFA No. 592/2016 and Anil Vashisth v. Awaaz India Media, RFA No. 984/2019 to support his arguments.
12. On the other hand, Ld. Counsel for plaintiff has opposed these submissions and has argued that this suit is well within limitation, as the Digitally signed by DEVENDRA CS (Comm) No. 129/2024 KUMAR DEVENDRA Gopal Vs. Axis Innovations Pvt. Ltd. & Ors. Date: 17/33 KUMAR 2025.10.29 17:03:10 +0530 limitation to file this case started from the date of service of legal notice 17.07.2023, in terms of Article 14, Schedule of Limitation Act, as no specific period of payment was fixed. It is further argued that legal notice was not replied by the defendants which suggests that the defendants have no objection to this limitation and have also not disputed liability. It is further argued that limitation to recover amount of the goods shall govern by Section 113 of Limitation Act and Hon'ble High Court of Delhi has held in case titled Bharath Skins Corporation v. Taneja Skins Company Pvt. Ltd., 2011 SCC OnLine Del 5523 and Metropolis Travels & Resorts (I) (P) Ltd. v. Sumit Kalra, 2002 SCC OnLine Del 521 that limitation would start from date of demand and this suit is within limitation.
13. I have heard the arguments and perused the record. Admittedly, both the parties have raised a legal issue regarding limitation. Ld. Counsel for defendants has argued that this suit shall govern by limitation prescribed by Article 14 of Schedule of Limitation Act, whereas Ld. Counsel for plaintiff has argued that there was no fixed period of payment of due amount, due to limitation shall start on demand, which was raised by service of legal notice Ex.PW2/5. However, before dealing this issue, it is necessary to go through Articles 14 & 113 of Schedule of Limitation Act, 1963 are as under:
PERIOD OF LIMITATION [See Sections 2(j) and 3] FIRST DIVISION--SUITS Part I--Suits Relating To Accounts Digitally signed by DEVENDRA DEVENDRA KUMAR CS (Comm) No. 129/2024 KUMAR Date:
Gopal Vs. Axis Innovations Pvt. Ltd. & Ors. 2025.10.29 18/33 17:03:16 +0530 Description of suit Period of Time from which period limitation begins to run Part II--Suits Relating To Contracts
14. For the price of goods sold and Three The date of the delivered where no fixed period of credit is years delivery of the agreed upon. goods.
Part X--Suits for which there is no prescribed period
113. Any suit for which no period of Three When the right to limitation is provided elsewhere in this years sue accrues Schedule.
In view of abovesaid Articles, it is clear that both Articles deal with different limitations, as per Article 14, limitation starts from the date of delivery of the goods, whereas as per Article 113, it starts when the right to sue accrues.
14. Ld. Counsel for plaintiff has argued that there was no fixed time to pay amount and regular ledger was maintained, due to limitation would start from the date of service of legal notice in terms of Article 113 of Schedule of Limitation Act. However, to determine application of any specific Article, it is necessary to see criteria of application of both Articles, which depends upon the cause of action set out in the pleadings. The Hon'ble Supreme Court of India has held in case titled B & T AG v. Union of India, (2024) 5 SCC 358 that:
65. Cause of action becomes important for the purposes of calculating the limitation period for bringing an action. It is imperative that a party realises when a cause of action arises. If a party simply delays sending a notice seeking reference under the 1996 Act because they Digitally signed by DEVENDRA CS (Comm) No. 129/2024 DEVENDRA KUMAR Gopal Vs. Axis Innovations Pvt. Ltd. & Ors. 19/33 KUMAR Date:
2025.10.29 17:03:23 +0530 are unclear of when the cause of action arose, the claim can become time-barred even before the party realises the same.
64. "Cause of action" means the whole bundle of material facts, which it is necessary for the plaintiff to prove in order to entitle him to succeed in the suit. In delivering the judgment of the Board in Chand Kour v. Partab Singh [Chand Kour v. Partab Singh, 1888 SCC OnLine PC 14 : ILR (1889) 16 Cal 98] , Lord Watson observed : (SCC OnLine PC) "... Now the cause of action has no relation whatever to the defence which may be set up by the defendant, nor does it depend upon the character of the relief prayed for by the plaintiff. It refers entirely to the grounds set forth in the plaint as the cause of action, or, in other words, to the [Ed. : The matter between two asterisks has been emphasised in original.] media [Ed. : The matter between two asterisks has been emphasised in original.] upon which the plaintiff asks the court to arrive at a conclusion in his favour."
(emphasis supplied)
68. Whether any particular facts constitute a cause of action has to be determined with reference to the facts of each case and with reference to, the substance, rather than the form of the action. If an infringement of a right happens at a particular time, the whole cause of action will be said to have arisen then and there. In such a case, it is not open to a party to sit tight and not to file an application for settlement of dispute of his right, which had been infringed, within the time provided by the Limitation Act, and, allow his right to be extinguished by lapse of time, and thereafter, to wait for another cause of action and then file an application under Section 11 of the 1996 Act for establishment of his right which was not then alive, and, which had been long extinguished because, in such a case, such an application would mean an application for revival of a right, which had long been extinguished under the 1963 Act and is, therefore, dead for all purposes. Such proceedings would not be maintainable and would obviously be met by the plea of limitation under Article 137 of the 1963 Act.
73. Negotiations may continue even for a period of ten years or twenty years after the cause of action had arisen. Mere negotiations will not postpone the "cause of action" for the purpose of limitation. The Legislature has prescribed a limit of three years for the enforcement of a claim and this statutory time period cannot be defeated on the ground that the parties were negotiating.
Digitally
signed by
DEVENDRA
CS (Comm) No. 129/2024 DEVENDRA KUMAR
Gopal Vs. Axis Innovations Pvt. Ltd. & Ors. KUMAR Date: 20/33
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In view of abovesaid case law, it stands proved that the cause of action is not a single fact but a bundle of facts which gives a cause to file a case. However, when infringement of any right happens at a particular time, the whole cause of action starts immediately to file case and mere negotiations shall not postpone the "cause of action" for the purpose of limitation.
15. In the present case also, the different paragraphs of the plaint shall prove that initially, the cause of action started way back in the years 2015- 2018, when the goods were supplied and thereafter the defendants kept on seeking time under different pretexts like Corona pandemic/ financial constraints/ market conditions etc., due service of legal notice dated 17.07.2023 is cited specific cause of action to file this case. However, in view of judgment titled B & T AG v. Union of India , (2024) 5 SCC 358, mere negotiations / requests of the defendants to seek further time could not extend the period of limitation. In fact, limitation cannot be extended in whimsical manner and that too without supporting any document.
16. However, in this case, main issue is, as to which particular Article/s of Schedule of Limitation Act would be applicable to determine limitation? Ld. Counsel for plaintiff has cited Article 113, whereas Ld. Counsel for defendants has claimed Article 14. The Hon'ble High Court of Delhi has held in case titled Bharath Skins Corporation v. Taneja Skins Company Pvt. Ltd., 2011 SCC OnLine Del 5523 that:
23. The upshot of the above discussion is that Article 14 of the Schedule to the Limitation Act, 1963 does not apply to suits for recovery of money due on a running and current but a non-mutual account between the buyer and seller i.e. an account of the kind with which we are dealing.Digitally signed by DEVENDRA
CS (Comm) No. 129/2024 KUMAR
DEVENDRA
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24. There being no Article in the Schedule to the Limitation Act, 1963 dealing with suits for recovery of money due on running and current but non-mutual accounts, in such circumstances, the residual article viz. Article 113 applies to such suits.
25. Under Article 113, the period for limitation for filing a suit is three years and the same begins to run when the right to sue would accrue when claim was denied in response to the legal notice dated 26.06.1985 on 13.07.1985 but since Rs. 7,000/- was paid on 13.07.1985 and 24.07.1985 (Rs. 2,000/- on the former date and Rs. 5,000/- on the latter date), limitation would commence from 24.07.1985. The suit being filed on 02.09.1985, governed for purposes of limitation by Article 113 the suit would be within limitation.
17. Contrary to it, it has held in case titled XS Infosol Pvt. Ltd. v. GLS Technologies Pvt. Ltd., 2018 SCC OnLine Del 6601 as under:
6. The subject suit is a suit for services provided by the appellant/plaintiff and with respect to which the Bill dated 7.11.2012 was raised and last payment under which was made on 13.2.2013. If the suit was a suit for recovery of price of goods not paid for then the suit would have been governed by Article 14 of the Limitation Act, 1963 and which provides limitation to be three years from the date of delivery of goods. The present suit would be governed by Article 113 of the Limitation Act and because there is no Article provided for sale of services, however, when we have to apply Article 113 of the Limitation Act in the facts of the present case the same will have to be on the same principles contained in Article 14 of the Limitation Act with respect to providing for sale of goods because sale of goods and services more or less stand on the same footing.
18. In view of comparison of both judgments, it is clear that judgment titled XS Infosol Pvt. Ltd. (Supra) is more applicable on the facts of this case, which has laid down clear criteria to apply Article 113 according to the parameters of Article 14 of Schedule of Limitation Act, 1963. The cause of action in cases of supply of the goods and services shall start from the date of supply of the goods in terms of Article 14 and Article 113 of the Digitally signed by DEVENDRA KUMAR CS (Comm) No. 129/2024 DEVENDRA Gopal Vs. Axis Innovations Pvt. Ltd. & Ors. Date:
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Limitation Act shall be read in reference of Article 14 and limitation would start from the date of supply of the goods / services. Article 14 provides limitation of 3 years to recover amount from the date of supply of the goods, which was during the period from 2015 to 2018. Plaintiff has served legal notice dated 17.07.2023 (Ex.PW2/5), which was definitely beyond the period of 3 years as provided by Article 14.
19. However, Ld. Counsel for plaintiff has argued that this case is based upon ledger, due to limitation would start from last payment, which was of Rs. 10,000/- paid by the defendant no.3. Admittedly, the plaintiff has filed ledger to recover due amount and it must be maintained in regular course of business. If ledger is maintained in regular course of business, then it may be considered to determine limitation but authenticity of ledger must be proved.
20. Admissibility of ledger/ statement of accounts has been dealt with in case titled Chandradhar Goswami & Ors vs The Gauhati Bank Ltd, 1967 AIR SC 816, as under;
The main question urged before us is that there is no evidence besides the certified copy of the account to prove that a sum of Rs. 10,000/- was advanced to the appellants and therefore in view of s. 34 of the Evidence Act the appellants cannot be saddled with liability for that amount. Section 34 is in these terms:-
"Entries in books of account, regularly kept in the course of business, are relevant whenever they refer to a matter into which the court has to inquire, but such statements shall not alone be sufficient evidence to charge any person with liability."
It is clear from a bare perusal of the section that no person can be charged with liability merely on the basis of entries in books of account, even where such books of account are kept in the regular course of business. There has to be further evidence to prove payment Digitally signed CS (Comm) No. 129/2024 by DEVENDRA Gopal Vs. Axis Innovations Pvt. Ltd. & Ors. DEVENDRA KUMAR 23/33 KUMAR Date:
2025.10.29 17:03:52 +0530 of the money which may appear in the books of account in order that a person may be charged with liability thereunder, except where the person to be charged accepts the correctness of the books of account and does not challenge them. In the present case, however, the appellants did not accept the correctness of the books of account. We have already indicated that they went to the. length of saying that the accounts were not correctly kept, and were fraudulent.
In any case as the appellants had not admitted the correctness of the accounts filed by the bank, particularly after March 1, 1947, the bank had to prove payment of Rs. 10,000/- on March 19,1947 if it wanted to charge the appellants, with liability for that amount, But all that the bank did was to produce a certified copy of account under s. 4 of the Bankers' Books Evidence Act, No. XVIII of 1891. Section 4 of that Act reads thus-
"Subject to the provisions of this Act, a certified copy of any entry in a banker's book shall in all legal proceedings be received as prima facie evidence of the existence of such entry, and shall be admitted as evidence of the matters, transactions and accounts therein recorded in every case where, and to the same extent as, the original entry itself is now by law admissible, but not further or otherwise".
It will be clear that s. 4 gives a special privilege to banks and allows certified copies of their accounts to be produced by them and those certified copies become prima facie evidence of the existence of the original entries in the accounts and are admitted as evidence of matters, transactions and accounts therein, but such admission is only where, and to the same extent as, the original entry itself would be admissible by law and not further or otherwise. Original entries alone under s. 34 of the Evidence Act would not be sufficient to charge any person with liability and as such copies produced under s. 4 of the Bankers' Books Evidence Act obviously cannot charge any person with liability. Therefore, where the entries are not admitted it is the duty of the bank if it relies on such entries to charge any person with liability, to produce evidence in support of the entries to show that the money was advanced as indicated therein and thereafter the entries would be of use as corroborative evidence. But no person can be charged with liability on the basis of mere entries whether the entries produced are the original entries or copies under s. 4 of the Banker's Books Evidence Act.
We are therefore of opinion that in view of s. 34 of the Evidence Act the appellants cannot be saddled with liability for the sum of Rs. 10,000/- said to have been advanced on March, 19,1947 on the basis Digitally signed by DEVENDRA CS (Comm) No. 129/2024 DEVENDRA KUMAR Gopal Vs. Axis Innovations Pvt. Ltd. & Ors. KUMAR Date: 24/33 2025.10.29 17:03:59 +0530 of a mere entry in the amount. Section 34 says that such entry alone shall not be sufficient evidence, and so some independent evidence had to be given by the bank to show that this sum was advanced. What would be the nature of such independent evidence would certainly depend upon the facts of each case; but there can be no doubt that some independent evidence to show that advance had been made has to be given.
21. Further, in case titled M/S. J.K. Synthetics Ltd. vs M/S. Dynamic Cement Traders, CS(OS) No.782/1998
6. The only averment in the plaint for claiming amount due is that the amount claimed in the suit is an entry dated 31.3.1995 which is found in the statement of account of the plaintiff. The statement of account of the plaintiff has been proved and exhibited as Ex.PW1/50. This is a statement of account from 1.4.1993 to December, 1997. Another document, which of course, is not a statement of account but only some of the entries in the statement of account is Ex.PW1/49. In view of Section 34 of Indian Evidence Act, 1872, a mere entry in the statement of account is not sufficient to fasten any liability and the entries in the statement of account have to be proved by means of the documents/vouchers of the transaction. Admittedly, the entry dated 31.3.1995 in Ex.PW1/50 for `69,36,240.36/- has not been substantiated by means of any document showing as to how and for what this amount of ` 69,36,240.36/- is due. The Supreme Court in the judgment reported as Central Bureau of Investigation Vs. V.C. Shukla & Ors. (1998) 3 SCC 410 has observed that Section 34 is in two parts. The first part speaks of relevancy of the entries in evidence once the books of accounts are shown to be regularly kept in the course of business and the second aspect is that even if it is proved that the statements of accounts are regularly kept in course of business, yet, the statement of account/entry alone is not sufficient evidence to charge a person with liability. The object of law is that mere entries should not be sufficient to fasten the monetary liability unless documents of transaction (which would be invoices, challans and receipts of supply of goods etc) are filed and exhibited in support of the entries made. I therefore hold that mere entry of ` 69,36,240.36/- existing in the statement of account in Ex.PW1/50 is not sufficient to charge the defendant with liability as claimed by the plaintiff in the suit. Once this entry is not proved, then, even if I take the payment of ` 2 lacs made by the defendant on 21/22.4.1995 and as admitted by the defendant in his cross- examination, will not in any manner help to prove the existence of debit entry of ` 69,36,240.36/-. Even the plaint Digitally signed by CS (Comm) No. 129/2024 DEVENDRA Gopal Vs. Axis Innovations Pvt. Ltd. & Ors. DEVENDRA KUMAR 25/33 KUMAR Date:
2025.10.29 17:04:07 +0530 is totally silent as to because of what reason this entry exists i.e for supply of goods or towards interest or towards any other aspect, and if so what are such invoices/agreement qua the supply or interest or other aspects. I therefore hold that the plaintiff has failed to prove the entries dated 31.3.1995
22. Further, in case titled M/S ICICI Bank Limited vs Kamini Sharma & Anr., RFA 297/2015, it is held that
14. Section 34 of the Evidence Act clearly provides that the books of accounts maintained in electronic form are relevant. Under Section 62 of the Evidence Act, original documents constitute primary evidence. In the context of electronic evidence, printouts of electronic documents are considered as secondary. However, judicial notice needs to be taken of the fact that most accounts today are not maintained in paper form, but electronic form. The primary evidence could be the server on which the statement of accounts is stored.
These servers may store the statement of accounts of multiple clients in the hard drive. It would be an impossibility to require the Plaintiff bank to produce the hard drive of the server in every suit for recovery filed by it. Under such circumstances, the Plaintiff bank has no option but to produce the secondary evidence i.e., a printout of statement of accounts, duly certified by a responsible official of the bank along with a certificate under Section 65B of the Evidence Act. Needless to add, the certificate under Section 65B of the Evidence Act has now become a usual practice in almost all of the suits, inasmuch as, in every such suit, parties are bound to place reliance on electronic documents. The mere fact, that the printout is being filed as secondary evidence along with the necessary certificate, does not make it any less valid. The said accounts statement would be rebuttable if any discrepancy is found or pointed out. But in the absence of the same, there is no reason as to why the statement of accounts filed by the Plaintiff bank should be disbelieved.
23. In another case titled Om Prakash v. Central Bureau of Investigation, 2017 VII AD (Del) 649, it is held as under:
"5.18. A conjoint reading of Section 34 of the Indian Evidence Act, Sections 2(8), 2A and 4 of the Banker's Book Evidence Act and the various pronouncements of the Supreme Court lead to the conclusion that firstly, the prosecution is required to lead admissible evidence to prove the entries in the books of accounts and after having led admissible evidence link the same with other evidence on record to prove the guilt of the accused beyond reasonable doubt. Thus, in case Digitally signed by DEVENDRA CS (Comm) No. 129/2024 KUMAR Gopal Vs. Axis Innovations Pvt. Ltd. & Ors. DEVENDRA 26/33 Date:
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the statements of accounts exhibited on record are accompanied by certificate as envisaged under Section 2A of the Bankers' Books Evidence Act, the statements of accounts would be admissible in evidence. An objection as to the person exhibiting the said statements of account i.e. an objection to the mode of proof and not admissibility, has to be taken at the time of exhibition of the documents. Therefore if certified copies of the statements of accounts have been exhibited as per the requirement of Section 2A of the Act, the statement of account would be admissible and in case no objection to the witness proving the same is taken at the time when the document is exhibited, the document would be validly read in evidence. However, if the statements of accounts have been exhibited without the necessary certificate as contemplated under Section 2A of the Act, the same being inadmissible in evidence, even in the absence of an objection taken as to the mode of proof during trial, this Court cannot read the same in evidence even though marked as an exhibit."
In view of abovesaid legal proposition, it is cleared that statement of accounts / ledger maintained by any party does not carry any presumption, until and unless it is authenticated under Banker's Books Evidence Act.
24. In this case also, ledger of the defendants maintained by the plaintiff Ex.PW2/4 is nowhere admitted by the defendants. The defendants have not admitted statement of account / ledger and even PW2 has also admitted that entries at point A & B in Ex.PW2/4 are not pertaining to supply of the goods and are regarding payment of some commission qua articles sold by the defendants for the plaintiff, whereas the plaintiff has nowhere disclosed that the defendants ever worked as commission agent/s. Rather PW2 has deposed that the defendants never appointed commission agent/s. If the plaintiff has admitted that ledger contains some entries beyond supply of the goods, then contents / entries of ledger have no authenticity under Section 34 of Evidence Act. If ledger has no admissibility, then entries must be proved by relevant documents, which are invoices Ex.PW2/2 Digitally signed by DEVENDRA KUMAR CS (Comm) No. 129/2024 DEVENDRA Gopal Vs. Axis Innovations Pvt. Ltd. & Ors. Date:
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(colly) herein. However, invoices Ex.PW2/2 (colly) are pertaining to the years 2015-2018 and recovery of such invoices is barred by limitation under Article 14. As such, statement of account / ledger cannot determine limitation of this case.
25. One more aspect regarding ledger is material. Plaintiff has filed an affidavit/ certificate under Section 63 of BSA, 2023 to support authenticity of ledger Ex.PW2/4 as well as invoices Ex.PW2/2 (Colly). Plaintiff has proved certificate Ex. PW1/3 to support computer-generated documents Ex.PW2/2 (colly) and Ex.PW2/4 but contents and language of this certificate are very general and have no description of documents or computer system. Even there is no description of documents which have been supported by this affidavit/ certificate u/s 63 of BSA, 2023. As such, certificate u/s 63 of BSA, 2023 (Section 65B of erstwhile Evidence Act) Ex.PW2/3 could not prove the authenticity of ledger, as most of the invoices are admitted.
26. Ld. Counsel for plaintiff has emphasized that the defendant no.3 made a part payment of Rs. 10,000/- in cash 20.03.2023, as mentioned in Para 10 of plaint, which has extended period of limitation. However, Section 19 of the Limitation Act, 1963 deals with part payment, which has been defined in case titled Shanti Conductors (P) Ltd. v. Assam SEB, (2020) 2 SCC 677 as under:
15. Order 7 Rule 6 uses the words "the plaint shall show the ground upon which exemption from such law is claimed". The exemption provided under Sections 4 to 20 of the Limitation Act, 1963 are based on certain facts and events. Section 19, with which we are concerned, provides for a fresh period of limitation, which is founded on certain facts i.e. (i) whether payment on account of debt or of interest on Digitally signed CS (Comm) No. 129/2024 by DEVENDRA Gopal Vs. Axis Innovations Pvt. Ltd. & Ors. KUMAR 28/33 DEVENDRA Date:
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legacy is made before the expiration of the prescribed period by the person liable to pay the debt or legacy, (ii) an acknowledgment of the payment appears in the handwriting of, or in a writing signed by, the person making the payment.
16. We may notice the judgment of this Court dealing with Section 20 of the Limitation Act, 1908, which was akin to present Section 19 of the Limitation Act, 1963. In Sant Lal Mahton v. Kamla Prasad [Sant Lal Mahton v. Kamla Prasad, 1951 SCC 1008 : AIR 1951 SC 477] , this Court held that for applicability of Section 20 of the Limitation Act, 1908, two conditions were essential that the payment must be made within the prescribed period of limitation and it must be acknowledged by some form of writing either in the handwriting of the payer himself or signed by him. This Court further held that for claiming benefit of exemption under Section 20, there has to be pleading and proof.
27. In view of this judgment, it stands proved that part payment must be made within the period of limitation. In this case, period of 3 years started on 03.12.2018, whereas part payment was allegedly made on 23.03.2023 i.e. beyond 3 years, as prescribed under Article 14 r/w 113 of Schedule of Limitation Act, 1963. Even this part payment of Rs. 10,000/- is also disputed, as mode and manner of this payment is contradictory in the plaint and testimony of PW2.
28. Admittedly, outstanding amount against the defendants on 03.12.2018 was of Rs. 5,24,458/-, whereas this suit has been filed on 23.04.2024 on the basis of legal notice dated 17.07.2023 which could not be justified in any manner. Ld. Counsel for plaintiff has argued that legal notice was duly served upon the defendants but they failed to reply said legal notice and now adverse inference has to be drawn in view of case titled Metropolis Travels & Resorts (I) Pvt. Vs. Sumit Kalra & Anr., 2002 VI AD (Delhi) 493. In this case, it has held that if legal notice was not Digitally signed by DEVENDRA CS (Comm) No. 129/2024 Gopal Vs. Axis Innovations Pvt. Ltd. & Ors. DEVENDRA KUMAR 29/33 KUMAR Date:
2025.10.29 17:04:34 +0530 replied, then adverse inference has to be drawn against opposite party. However, adverse inference does not mean extension of limitation, as expiry of limitation extinguishes right to sue and once right to sue extinguished, it cannot be revived by serving of legal notice, until and unless such legal notice is integral part of the cause of action, which is not in this case. In fact, purpose of legal notice is to bring into notice of opposite party the grievance of sender and to give an opportunity to addressee to comply with, whereas legal notice cannot replace limitation to file a time barred claim. As such, judgment relied upon Ld. Counsel for plaintiff is not helpful.
29. No doubt period of limitation remained suspended during the period from 15.03.2020 to 28.02.2022 in view of judgment titled In Re. Extension of Limitation. However, a period of 90 days was given to file cases of which limitation had already expired during corona period, but in this case suit has been filed on 23.04.2024, which is admittedly beyond the prescribed period of 90 days.
30. As such, the cause of action to file this case started from 03.12.2018 onwards, whereas the plaintiff has not proved that the defendants acknowledged claim of the plaintiff, or made any part payment within the period of limitation. Rather contradictory version of the plaintiff regarding part payment of Rs.10,000/- by the defendant no.3 in the pleadings and testimony of PW2 has proved that the plaintiff has failed to prove that any such payment was ever made by the defendant no.3. Plaintiff has not proved any document to prove this payment. Accordingly, the defendants Digitally signed by DEVENDRA CS (Comm) No. 129/2024 DEVENDRA KUMAR Gopal Vs. Axis Innovations Pvt. Ltd. & Ors. 30/33 KUMAR Date:
2025.10.29 17:04:42 +0530 have discharged the onus to prove that this suit is barred by limitation and issue no.3 is decided in favor of the defendants and against the plaintiff.
31. ISSUE NOs. 1 & 2: The onus to prove both issues was fixed upon the plaintiff and to discharge the onus, the plaintiff has examined himself as PW2 and has cross examined DW1. PW2 has proved that the plaintiff supplied the goods to the defendants against invoices Ex.PW2/2 (colly), whereas the plaintiff has failed to prove that any ledger Ex.PW2/4 was maintained in the regular course of business. Ledger has shown outstanding amount of Rs. 5,24,458/- on 03.12.2018, whereas it has two entries at point A & B, which are beyond payment of the goods. Even ledger is not proved by proper certificate u/s 63 of BSA regarding its authenticity and the plaintiff has also failed to prove that the defendant no. 3 ever made any part payment of Rs. 10,000/- on 22.03.2023 as alleged to extend period of limitation.
32. Contrary to it, the defendants have taken a defense in Written Statement that the defendant no.1 was commission agent of the plaintiff and the plaintiff used to supply the goods on commission basis @ 10% against bills amount. In Para 4 of Preliminary Objections, the defendants have further alleged that Rs. 4,00,000/- commission was outstanding against the plaintiff till Sept., 2018 and even the plaintiff agreed to pay amount by 01.09.2019, where he failed to pay outstanding commission amount, due to the defendants stopped selling of the goods and ultimately unpaid commission amount was set off against due amount in the month of December, 2018. However, the plaintiff has denied allegations of the Digitally signed by DEVENDRA CS (Comm) No. 129/2024 KUMAR Gopal Vs. Axis Innovations Pvt. Ltd. & Ors. DEVENDRA 31/33 Date:
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defendants levelled in 4 of WS in Replication, Para- 4 - Reply to Preliminary Objections which suggest that the plaintiff has denied claim of the defendants. DW1 has deposed similar facts in Para 4 of his affidavit Ex.DW1/A and has confirmed it during cross examination that the defendants worked on commission basis during the period from 2014 to 2018 @ 10% against bills amount under oral agreement.
33. Not only this, DW1 has also pointed out points A & B in lodger Ex.PW2/4 qua adjustment of such commission and commission amount of Rs. 4,00,000/- was set off against due outstanding in the month of Sept./Oct./Nov., 2018. It is further proved that customers to whom the goods were supplied by the plaintiff through the defendants used to acknowledge goods and to sign invoices. In fact, entire testimony of PW2 is silent about any arrangement of commission on the goods @ 10% against bills amount and amounts to concealment. No doubt the defendants have also not proved any document to prove any such commission arrangement but still testimony the testimony of DW1 has proved that the defendants were commission agent of the plaintiff. Though PW3 has proved GST record of the defendants, yet merely on the basis of GST record, it cannot be said that sell reflected in record was on commission basis. However, on the basis of admitted invoices Ex.PW2/2 (colly), it may be said that the plaintiff supplied the goods to the defendants but recovery of charges of those goods supplied in the year 2018 is barred after a period of 3 years in terms of Article 14 of Schedule of Limitation Act. As such, the plaintiff has failed to discharge the ones to prove that the plaintiff is entitled for recovery of suit amount. Similarly, if no amount is recoverable, then Digitally signed by DEVENDRA KUMAR DEVENDRA CS (Comm) No. 129/2024 Date:
KUMAR 2025.10.29
Gopal Vs. Axis Innovations Pvt. Ltd. & Ors. 32/33
17:05:00
+0530
charging of interest against outstanding amount is out of question amount. As such, the plaintiff has failed to discharge the onus to prove issues no. 2 & 3 and both the issues are decided in favour of the defendants and against the plaintiff
34. Relief :- In view of my findings on the aforesaid issues, the suit of the plaintiff is not maintainable, hence dismissed. Decree sheet be prepared. No order as to cost. File be consigned to Record Room after necessary compliance. Digitally signed by DEVENDRA DEVENDRA KUMAR KUMAR Date:
2025.10.29 ANNOUNCED IN OPEN COURT 17:05:09 +0530 ON 29th day of October, 2025 (DEVENDER KUMAR) District Judge (Commercial Court-01) East District Karkardooma Courts, Delhi CS (Comm) No. 129/2024 Gopal Vs. Axis Innovations Pvt. Ltd. & Ors. 33/33