Delhi District Court
Deepika International Ltd vs Punjab Chemical Agency on 26 July, 2025
IN THE COURT OF SH. NARESH KUMAR MALHOTRA :
DISTRICT JUDGE (COMMERCIAL)-06
TIS HAZARI COURTS, WEST: DELHI
CS (COMM) No. 271/2024
CNR No. DLWT010025482024
26.07.2025
Deepika International Limited,
Having its Registered office at:
36, Ground Floor, Camp No. 3,
Nangloi, New Delhi-110041
Through its Authorized Representative
Mr. Chander Mohan,
S/o Sh. Rai Sahab Rohaz
Manager (Accounts)
.....Plaintiff
Vs.
1. M/s. Punjab Chemical Agency,
14, Najafgarh Road,
Near Zakhira Chowk,
Delhi-110015
2. Mr. H.S. Gogi,
Partner
M/s. Punjab Chemical Agency
14, Najafgarh Road,
Near Zakhira Chowk,
Delhi-110015
3. Gujarat Narmada Valley Fertilizers
& Chemical Limited
Having its registered office at:
P.O. Narmadanagar,
District Bharuch, NA
Gujarat, India-392015.
....Defendants.
Date of filing : 20.03.2024
Date of arguments : 24.07.2025
Date of judgment : 26.07.2025
CS (Comm.) No. 271/2024 -1-
COMMERCIAL SUIT FOR RECOVERY OF Rs. 9,82,231/-
ALONG WITH PENDENT-LITE AND FUTURE INTEREST.
JUDGMENT:
1. Vide this judgment, I am deciding the suit for recovery of Rs. 9,82,231/- along with pendent-lite and future interest filed by the plaintiff against the defendants.
2. In the plaint, it is mentioned that the present dispute between the plaintiff and defendants falls within the definition of commercial disputes specified under Section 2(c) of the Commercial Courts Act, 2015. The plaintiff is one of the leading manufacturers of PU Foam Sheets in India. The plaintiff company supplies its product such as PU Foam Sheets, Mattress etc. to customers located across the country. The plaintiff company has authorized Mr. Chander Mohan, S/o Sh. Rai Sahab Rohaz, working as Manager (Accounts) to sign, verify and file the present suit on behalf of plaintiff company vide Board resolution dated 17.11.2023. The plaintiff company requires "Toluene Di-Isocyanate" (hereinafter referred to as TDI) as an essential raw material to manufacture its final products such as PU Foam, Mattress etc. It is mentioned that the defendant no. 1 is a partnership firm and defendant no. 2 is the partner, who is looking after day to day affairs and management of the defendant no. 1. The defendants primarily deal in all kind of chemicals such as Methylene Chloride, Chloroform, CTC Phosphoric Acid, TDI etc. The defendant no. 1 is registered under the department of Goods and Service Tax (GST Department) under registration No. 03AAJFP7740B1ZJ. The defendant no. 3 is a private limited CS (Comm.) No. 271/2024 -2- company which is one of the major producers of urea, nitro phosphate fertilizers, neem-based products and industrial chemicals such as methanol, formic acid nitric acid and acetic acid. The defendants had assured the plaintiff that the defendant no. 1 is the registered distributor of defendant no. 3 for the sale of TDI in the state of Haryana & Delhi. The defendants no. 1 & 2 further assured the plaintiff that since it is the registered distributor of defendant no. 3, it conducts its business strictly as per the scheme and policies of the defendant no. 3 company. Based on assurances of the defendants, the plaintiff company started purchasing TDI from defendant no. 1 firm from the financial year 2020-2021 onwards. The plaintiff company entered into a Tripartite agreement with defendants no. 1 and 3 on 11.08.2021 for the purchase of TDI from June 2021 to March 2022. The said agreement provides various slab rates for monthly and quarterly discounts/rebates which the plaintiff would receive from defendant no. 1 at the behest of defendant no. 3 if the total purchase of the plaintiff crosses certain threshold limit in the respective period. The monthly and quarterly discount slab rates mentioned in the Tripartite agreement are as under:-
Monthly Discount Details.
Offered Quantity slab Monthly Discount (Rs./Mt) Annual Discount 47 to 95 Rs. 2,600/- Rs. 600/-
95 & Above Rs. 2,800/- Rs. 800/-
Three Months Special Scheme:-
Three months special scheme Discount (Rs./Mt) Duration July, 2021 to September, 2021 Qty. Commitment/ Month 56 Mts.
Eligible Slab Below 100
CS (Comm.) No. 271/2024 -3-
Eligible Discount Rs. 3,000/-
It is further averred that clause 5(b) of the Tripartite Agreement further provides that the defendant no. 1 would give monthly discounts to the plaintiff after the end of the respective month and clause 5(d) of the Agreement provides that the three- month scheme discount would be given by the defendant no. 1 to the plaintiff at the end of the respective quarter. It is mentioned that in accordance with the terms and conditions of the discount policy of defendant no. 3, the plaintiff company used to purchase TDI from the defendant no. I firm from time to time during FY 2020-21 and FY 2020-21. In order to avail the monthly discount and special scheme discounts/rebates, the plaintiff used to place orders in the excessive quantities with the defendant no. 1 firm so that the price of TDI per Mt. would be less which effectively would also lower down the cost price of PU foam sheet for the plaintiff. The plaintiff has purchased 88 Mts of TDI from defendant no. 1 from August 2020 to October 2020. In accordance with the terms and conditions of the special discount policy of defendant no. 3, the plaintiff was entitled to receive the discount/rebate of Rs. 2,000/- per Mt which comes to Rs. 1,76,000/- at the end of October 2020. However, the plaintiff did not receive the said discount/rebate from the defendants till date. The plaintiff has further been informed by the defendant no. 3 that the defendant no. 1 had availed the said discount/rebate from the defendant no. 3 in the name of plaintiff company but the plaintiff has not received the same till date from the defendants. It is mentioned that plaintiff has further placed the order of 100.04 Mts each month with defendant no. 1 from February 2021 CS (Comm.) No. 271/2024 -4- to June 2021. In accordance with the special scheme discount policy of defendant no. 3, the plaintiff was entitled to receive the special discount/rebate of Rs.3,000/- per Mt which comes to Rs. 3,00,120/-. On 13.08.2021, the defendant no. 1 and defendant no. 2 had also issued credit note for the sum of Rs. 3,00,120/- in favour of the plaintiff company. However, on 07.07.2023, the defendant no. 1 had shared the statement of accounts of the plaintiff in its ledger book wherein it has not credited this amount in its account books despite the fact that it had issued credit note on 13.08.2021. Instead of the credit note of Rs. 3,00,120/-, the defendant no. 1 had shown the credit note of Rs. 1,51,133/- on 13.08.2021 in favour of the plaintiff. It is mentioned that in the month of August 2021, the plaintiff had further placed the order of 55.960 Mts of TDI to defendant no. 1. As per the monthly discount policy of the defendant no. 3, the plaintiff was entitled to receive the discount/rebate of Rs. 2,600/- per Mt which comes out to Rs. 1,45,496/-. The defendants no. 1 & 2 had issued credit note of the said amount to the plaintiff on 30.09.2021. However, on 07.07.2023, the defendant no. 1 has shared the statement of accounts of applicant in its ledger book wherein it has not credited that amount despite the fact that the defendants no.1 & 2 had issued credit note on 30.09.2021. The defendant no.1 & 2 have closed the plaintiff company's account by issuing credit note of Rs. 1,23,152/- on 31.03.2022. The plaintiff company had purchased 56 Mts and 55.96 Mts of TDI from defendant no.1 & 2 during July, 2021 and August 2021. Even though the plaintiff had not purchased TDI during the month of September, 2021 but the plaintiff had been informed from the defendant no. 3 that the defendant no.1 and defendant no. 2 have purchased TDI from CS (Comm.) No. 271/2024 -5- them in the name of the plaintiff for the month of September 2021 also. The defendants have further received the rebate/discount of Rs. 1,68,000/- and Rs. 1,67,880/- for the month of July,2021 and August 2021 respectively from the defendant no. 3 in the name of the plaintiff company. It is mentioned that during the FY 2020-21 and 21-22, the defendants no. 1 & 2 had issued the total credit note for the amount of Rs.
16,69,361/- in favour of the plaintiff. Since the monthly discounts and special scheme discounts were specifically mentioned in the discount policy of the defendant no.3 and Tripartite Agreement dated 11.08.2021 and the exact amount of discount/rebate had to be calculated at the end of the specific time period, the credit notes for the said discount/ rebate would not be included in the total value of supply made by the defendants no. 1 & 3 to the plaintiff. Therefore, in terms of Section 15(3) of CGST Act, 2017, the credit note issued by the defendants no. 1 & 2 should also have included the amount of GST to be calculated @18% P.A on the said value of respective credit note. The defendant no.1 and defendant no.2 are also liable to pay the total amount of Rs. 3,00,485/- to the plaintiff calculated at the rate of GST i.e. 18% of the total credit notes of Rs. 16,69,361/- issued by the defendant no.1 & 2 to the plaintiff from the FY 2020-21 and FY 2021-22. The plaintiff had requested the defendant no.1 & 2 repeatedly to issue the credit note as per the terms and conditions of the discount policy of defendant no.3 but they failed to do the same even after lapse of more than 17 months since the end of FY 2021-22. The defendant no. 1 & 2 have availed the discount/rebate from defendant no. 3 in the name of the plaintiff company for the whole period but they have not passed on the CS (Comm.) No. 271/2024 -6- same to the plaintiff. The plaintiff has also issued demand notice dated 11.07.2023 through its counsel calling upon the defendant no. 1 & 2 to make payment of Rs. 12,19,696/- including interest calculated @ 18% p.a from 01.04.2022 till the date of notice. The said notice was duly delivered to the defendants. The defendant no.1 & 2 had sent reply to the legal notice vide reply notice dated 18.07.2023 wherein the defendants have admitted that they have issued credit note to the plaintiff. However, they have stated that the said credit note was issued due to clerical error. The defendants no.1 & 2 have never brought the so-called clerical error into the knowledge of the plaintiff prior to the issuance of demand notice. It is apparent that the defendants no. 1 & 2 are just making excuses to escape from the legal liability due towards the plaintiff. The defendant no. 1& 2 have asked the plaintiff in the reply to issue debit notes against which the defendants would issue credit notes to the plaintiff. It is mentioned that the plaintiff in accordance with the reply notice dated 18.07.2023 had issued debit notes and sent the same to defendants vide email dated 01.11.2023. However till date, the defendants no. 1 & 2 have neither replied to the said email nor issued any credit note against the same. As per the plaintiff, it is is entitled to receive the following principal amount from the defendants:-
S. No. Particulars Amount
01. Total outstanding balance as on 01.04.2023 as Rs. 1,69,866/-
per the ledger account.
02. Special Scheme Discount/Rebate on the Rs. 1,76,000/-
purchase of TDI during the period from August to October 2020.
03. Special Scheme Discount/Rebate received by Rs. 1,68,000/-
defendants no. 1 & 2 from defendant no. 3 in CS (Comm.) No. 271/2024 -7- the name of plaintiff company but not passed over to the plaintiff in the month of July, 2021
04. Special Scheme Discount/ Rebate received by Rs. 1,67,880/-
defendants no. 1 & 2 from defendant no. 3 in the name of plaintiff company but not passed over to the plaintiff in the month of August, 2021.
05. Total amount of GST to be calculated at the Rs. 3,00,485/-
rate of 18% per annum on the total value of credit notes issued by the defendants no. 1 & 2 during the FY 2020-21 and 2021-22 of Rs.
16,69, 361
Total Rs. 9,82,231/-
It is prayed by the plaintiff to pass a decree of Rs. 9,82,231/- in favour of the plaintiff and against the defendants. The plaintiff has also claimed pendent-lite and future interest @ 18% per annum.
3. The defendant has filed written statement taking preliminary objections that there is no cause of action to file the present suit. It is submitted that tripartite agreement was executed between the plaintiff and the defendant No.3 on 11.08.2021 and it was executed to avail benefits. The plaintiff company placed orders as per agreement. The plaintiff company never purchased the material as per the agreement. The plaintiff company with mala-fide intentions raised the false and illogical demand in the present suit for the year which is prior to date of agreement i.e. 11.08.2021. The present suit is bad for non-joinder of necessary parties and same is liable to be dismissed. It is mentioned that the agreement was executed by the plaintiff company and the orders were booked, however, all the payments which were made to defendants were through M/s Slumber Foam India Pvt Ltd. and the present suit for recovery is filed on behalf of Deepika CS (Comm.) No. 271/2024 -8- International Ltd. The present suit filed by the plaintiff is not maintainable against the defendants. It is mentioned that the Tri- partite contract for sale was executed on 11/08/2021 and this contract was for the period from Jun'21 to July'21 to March'22. The plaintiff has not made clear in the suit as to against which firm, the plaintiff has raised the claim. Mr Chander Mohan is not competent and duly authorized person to sign the plaint. This court has no jurisdiction to try and entertain the present suit. The answering defendant is a only a distributor of defendant No.3 company. However, the material was booked at Gujarat and the material was supplied at Haryana.
In reply on merits, it is mentioned that it is matter of record that the plaintiff company is leading manufacturers of PU foams sheets India. It is denied that Mr Chander Mohan working as Manager (Accounts) is competent and duly authorized person to sign the plaint. It is mentioned that Defendants No.1 firm is the registered distributor of Defendant No.3 for the sale of TDI in the State of Haryana & Delhi. It is mentioned that being a distributor all the benefits as given by the defendant No.3 have to be given to the plaintiff but this was not treated as an assurance by the answering defendants. It is mentioned that as per the requirements of plaintiff's company place, the defendants placed orders with the defendant No.3 and all the benefits from time to time were provided by the defendant No.3 through the answering defendants. It is mentioned that the discount would be passed through the answering defendants. As per the defendants no. 1 & 2 the three months scheme discount would be given by the answering defendant to the plaintiff at the end of the respective quarter. It is mentioned that plaintiff company placed orders in CS (Comm.) No. 271/2024 -9- excessive quantities to avail scheme of discounts launched by Defendant No.3. But the plaintiff company failed to procure the agreed quantity. Thus, the plaintiff company was not entitled for the benefits of discounts as per term and conditions of Tripartite agreement. It is mentioned that the 88 Mts of material purchased from Defendant No.1 from August 2020 to October 2020 does not fall within the performance of the agreement dated 11.08.21. The plaintiff is not entitled to the scheme as per agreement dated 11.08.2021. It is denied that the plaintiff has further been informed from the defendant No.3, that the answering defendants had availed the said discount/rebate from the defendant No.3 in the name of plaintiff company. It is mentioned that it is matter of record that the plaintiff had placed orders as mentioned in the para. It is mentioned that the orders placed by plaintiff during February 2021 to June 2021 do not fall in the category of scheme which came in existence on 11.08.2021. As per the defendants no. 1 &2, the plaintiff is not entitled to receive the special discount/rebate of ₹ 3,000/- per Mt which comes to ₹ 3,00,120/-. It is mentioned that the credit note was issued by the answering defendants after verification of accounts and it was rectified and had shown the credit note of ₹1,51,133/- in favour of the Plaintiff. It is denied that in the month of August 2021, the plaintiff had further placed the order of 55.960Mts of TDI to Defendant No.1. It is mentioned that the plaintiff has only placed the orders however, the material was never been procured at the booked quantity as per the scheme. As per the defendants no. 1 & 2, the plaintiff company is not entitled to any benefits on basis of scheme dated 11.08.2021. It is denied that the Defendant Nos.1 and 2 had issued credit note of the said amount to the Plaintiff on CS (Comm.) No. 271/2024 -10- 30.09.2021. It is mentioned that the plaintiff shared the statement of accounts with the answering defendants. It is mentioned that the answering defendants after due verifications from defendant No.3, pointed out to the plaintiff that quantity of material was not procured to avail the benefits of scheme and issued credit note of ₹1,23,152/- on 31.03.2022. It is denied that the Plaintiff Company had purchased 56 Mts and 55.96 Mts of TDI from Defendant Nos.1 and 2 during July 2021 and August 2021. It is mentioned that the quantity was booked 56 Mts but the plaintiff procured material only 31.97 Mts in the month of August 2021 and 23.99 Mt in the month of September 2021, accordingly, the plaintiff is not entitled for discount as per the scheme. It is mentioned that although the credit notes were issued by the Defendant No.1 to the plaintiff, but after verification of accounts of material purchased the credit note was credited to the account of plaintiff without GST. It is mentioned that GST Liability was borne by answering defendant No.1 firm, hence there is no liability stands towards GST of the plaintiff company. It is mentioned that the plaintiff has not purchased the material as the agreement executed on 11.08.2021, and as such not entitled for the scheme of discounts. It is further mentioned that the credit note was issued qua the material purchased without GST. It is denied that the plaintiff had requested the Defendant Nos.1 & 2 repeatedly to issue the credit note as per the terms and conditions of the discount policy of Defendant No.3 but they failed to do the same even after lapse of more than 17 months since the end of FY 2021-22. It is mentioned that the tripartite agreement is dated 11.08.2021 and the plaintiff is not entitled for the benefit for the purchase made in year 2020. It is denied that the Defendant CS (Comm.) No. 271/2024 -11- Nos.1 & 2 have availed the discount/rebate from Defendant No.3 in the name of the plaintiff company for the whole period, but they have not passed on the same to the Plaintiff. It is mentioned that notice was duly delivered to the answering Defendants. It is mentioned that the Defendant Nos.1 & 2 had replied to the Plaintiff's company notice. The defendant have given credit for all eligible discounts to Plaintiff company. It is mentioned that there were certain clerical errors while issuing credit notes which were later on rectified and accounts were reconciled. As per books of accounts an amount of ₹ 1,69,866/- is due towards the plaintiff. In reply on merits similar averments are made. Dismissal of suit is prayed by the defendants no. 1 & 2.
4. Vide order dated 23.07.2024 the defendant no. 3 was proceeded ex-parte.
5. The plaintiff has not filed replication to the written statement filed by the defendants no. 1 & 2 and controverted the allegations made in the written statement and further reaffirmed the averments made in the plaint.
6. On the basis of pleadings of the parties, following issues were framed by this court on 06.09.2024, which are as under:-
(i) Whether the suit is bad for mis-joinder of parties (OPD No. 1 & 2)
(ii) Whether the suit is filed by duly authorized person ? (OPP)
(iii) Whether this court has jurisdiction to try and entertain the present suit? (OPP) CS (Comm.) No. 271/2024 -12-
(iv) Whether the plaintiff is entitled for recovery of Rs. 9,82,231/- ? (OPP)
(v) Whether the plaintiff is entitled for interest on the amount of Rs. 9,82,231/-, if yes at what rate and for what period ? (OPP)
(vi) Relief.
7. In evidence plaintiff has examined Sh. Kapil Gupta, S/o Sh. Sanjay Gupta as PW-1. This witness has filed affidavit on the lines of plaint. This witness has proved copy of Board Resolution as Ex. PW1/1, copy of master data as Ex. PW1/2, copy of GST registration certificate of M/s Punjab Chemical Agency which is exhibited as Ex. P1, copy of Master Data of Gujarat Narmada Valley Fertilizers & Chemicals Ltd as Ex. PW1/4, copy of tripartite agreement dated 11.08.2021 as Ex. PW1/5, copies of invoices dated 06.02.2021, 06.03.2021 and 12.05.2021 as Ex. P2 (colly), copy of voucher dated 31.05.2021 issued by the defendant which is exhibited as Ex. P-3, copies of vouchers dated 06.07.2022 and 05.08.2021 which are exhibited as Ex. P-4 and P-5, Copy of credit note dated 13.08.2021 and 30.09.2021 which are exhibited as Ex. P-6 and P-7, Copy of e-mail dated 04.10.2021 which is exhibited as Ex. P-8, copy of ledger account maintained by the plaintiff company as Ex. PW1/13, Statement of account dated 07.07.2023 which is exhibited as Ex. P-9, Copy of demand notice dated 11.07.2023 which is exhibited as Ex. P-10, Copy of reply to the demand notice dated 18.07.2023 which is exhibited as Ex. P-11, Copies of debit notes dated 18.07.2023 for Rs. 1,68,000/-, 1,678,880/-, 1,76,000/- and CS (Comm.) No. 271/2024 -13- 3,00,485/- which are exhibited as Ex. P-12 to P-15 and Board Resolution dated 15.10.2024 as Ex. PW1/21.
This witness is duly cross examined by Ld. Counsel for defendants no. 1 & 2. In cross examination, this witness has stated that admitted that a tripartite agreement dated 11.08.2021 was executed which is already Ex. PW1/5. He has admitted that there are no signatures of defendant no.1 on Ex. PW1/5. This witness has stated that in June, 2021 he had booked 28 Mt Tonnes and he had lifted 27.97 Mt Tonnes. This witness has stated that he cannot tell without seeing the record as to how much quantity of goods were booked by plaintiff for the month of July, 2021 to March, 2022 and how much quantity of goods plaintiff had lifted. This witness has admitted that he has not placed on record books of account of the plaintiff company. This witness has stated that he had made the payments to defendant No.1 through RTGS. This witness has voluntarily stated that he had made 09 payments. He has admitted that defendant no.1 has received payment from Slumber Foam India Pvt. Ltd. He has admitted that plaintiff used to book the chemicals and M/s Slumber Foam India Pvt Ltd used to make payment to defendant no.1. This witness has stated that GST used to be deposited after the receiving of credit note only. This witness has voluntarily stated that he has never received any credit note from the defendant. He has admitted that as per ledger account Ex. PW1/13 plaintiff has received discount from defendant no.1 on 06.07.2021 amounting to Rs. 69,925/-. This witness has stated that his account department has prepared Ex. PW1/13. He has admitted that there is entry dated 06.07.2021 and in this entry it is mentioned 2500/- per Mt discount scheme Agt supply M/o CS (Comm.) No. 271/2024 -14- June 21 at point A. This witness has stated that his account department personnel has prepared document to show how much material was procured from defendant No.1 from June, 2021 to March, 2022. This witness has admitted that he has placed this document on record and after seeing the file submits that he has not filed any document in this regard. He has stated that earlier Mr. Chander Mohan was Incharge of the account department for the relevant period. This witness has stated that he is in business transactions with defendant since July/August, 2020.
8. On the other hand, as per order dated 13.05.2025, Ld. counsel for defendants no. 1 & 2 had submitted that witness Mr. Harvinder Singh has lost his vision and there is only 10% visibility. It was also submitted by Ld. Counsel for defendants no. 1 & 2 at bar that he is not willing to examine any witness and D.E be closed. Accordingly, D.E was closed and matter was posted for final arguments.
9. I have heard Ld. Counsel for plaintiff and Ld. Counsel for defendants no. 1 & 2 at length and perused the record carefully.
10. My issue-wise findings are as under:-
11. Issue No.1-Whether the suit is bad for mis-joinder of parties? OPD (defendant No. 1 & 2).
12. To prove this issue the defendant has argued that an agreement was executed by the plaintiff and accordingly orders of the goods were placed by the plaintiff. However, all payments CS (Comm.) No. 271/2024 -15- made to the defendant were through M/s Slumber Foam India Pvt Ltd as per the statement of account (Ex. PW1/13). During cross- examination PW-1 admitted that defendant no. 1 received payments from M/s Slumber Foam India Pvt Ltd. PW-1 also admitted that the plaintiff used to book the chemicals and M/s Slumber Foam India Pvt Limited used to make payments to defendant no. 1. Since M/s Slumber Foam India Pvt Ltd. and the plaintiff are separate legal entities the present suit is bad for misjoinder of parties.
I have perused Ex-PW1/13 which shows that payments were made by M/s Slumber Foam India Pvt Limited to the defendant no. 1. It is important to observe Ex-P8 wherein it is clearly mentioned Kapil Gupta as managing director of M/s Slumber Foam India Pvt Ltd. Board resolution of the plaintiff company is exhibited as PW 1/1 which also shows that Mr. Kapil Gupta has signed the board resolution in the capacity of a director. It appears that M/s Slumber Foam India Pvt Ltd and the plaintiff company are sister concerns. Furthermore, the defendant no. 1 had complete knowledge of this fact as many emails have been sent by the defendant no. 1 to M/s Slumber Foam India Pvt Ltd wherein Mr. Kapil Gupta is a recipient. Furthermore, during the course of business transactions, the defendant never objected to any payment made by M/s Slumber Foam India on behalf of the plaintiff. Thus, it is apparent that M/s Slumber Foam India Pvt Ltd. is not a necessary party to the present suit as it rather appears to be affiliated with the plaintiff company. I am of the view, the present suit is not bad for mis-joinder of parties and therefore this issue is decided in favour of the plaintiff and against the defendant.
CS (Comm.) No. 271/2024 -16-13. Issue No. 2-Whether the suit is filed by duly authorized person ? OPP
14. To prove this issue PW-1 proved board resolution dated 17.11.2023 passed by the board of directors exhibited as PW1/1 whereby Mr. Chander Mohan had been duly authorised to pursue the case. This board resolution was later substituted by board resolution dated 15.10.2024 passed by the board of directors exhibited as PW1/21. During cross-examination PW-1 admitted that Ex-PW 1/1 is on the letter head of the plaintiff company and bears his signature at point A. Thus, there is nothing on record to suggest that the present suit has not been filed by duly authorised person. I am of the view, the present suit is filed by duly authorised person and therefore this issue is decided in favour of the plaintiff and against the defendant.
15. Issue No.3-Whether this court has jurisdiction to try and entertain the present suit? OPP
16. To prove this issue the Ld. Counsel for the plaintiff has argued that defendant no. l used to supply material to the plaintiff at its registered office situated at 36, Ground Floor, Camp No.3, Nangloi, Delhi 110041, which is located within the territorial jurisdiction of this Court. It is further argued that the defendant no. 2 is carrying on his business at 14, Najafgarh Road, Near Zakhira Chowk, New Delhi 110015, which is also within the jurisdiction of this Court.
CS (Comm.) No. 271/2024 -17-I have perused Copy of Master Data exhibited as Ex- PW1/2 which shows the registered address of the plaintiff company as 36, Ground Floor, Camp No.3, Nangloi, Delhi 110041. Tripartite contract for sale exhibited as Ex-PW 1/5 shows the address of the defendant no. 2 as 14, Najafgarh Road, Near Zakhira Chowk, New Delhi 110015. Tax invoice exhibited as Ex-P2 shows bank details of the defendant no. 2 as HDFC Bank, branch Rajouri Garden, New Delhi 110027. During cross examination PW-1 admitted that he made payments to defendant no. 1 through RTGS. It is apparent that plaintiff's registered office, address of defendant no. 2 and the bank account on which payments were made by the plaintiff are all situated within the territorial jurisdiction of this court.
The Hon'ble Delhi High Court in M/S. AUTO MOVERS vs. LUMINOUS POWER TECHNOLOGIES PVT LTD.
(CM(M) 604/2020) held as follows :-
"22. When, in the present case, the part cause of action has arisen also on account of the payments made by the petitioner/defendant directly into the bank account of the respondent/plaintiff, even if these were not on regular basis, since there is nothing to show that the place of payment had been fixed, even without following the principle that the 'debtor must seek out the creditor', it is clear that the Delhi Courts have jurisdiction to try the suit and the invoice does not vest jurisdiction in a court which had no jurisdiction at all."
The Hon'ble Delhi High Court in SATYAPAL vs SLICK AUTO ACCESSORIES PVT. LTD. & ORS. RSA No.40/2013 held as follows :-
6. I completely agree with the conclusion of the trial court because it is settled law that the debtor has to seek the creditor and since no place of payment was agreed upon, payment would have been made CS (Comm.) No. 271/2024 -18- to the seller/appellant who is residing and working for gain at New Delhi. Trial court has also rightly relied upon Section 49 of the Indian Contract Act, 1872 that it was upon the respondent no.1/defendant no. 1 to fix the place of payment and which has not been done, and therefore payment would have been made by the debtor to the creditor at the place of the creditor/plaintiff/appellant.
As already stated the first appellate court has not even bothered to refer to the analysis and reasoning of the trial court for holding that the courts at Delhi have jurisdiction. Accordingly, the findings of the first appellate court are set aside and it is held that the courts at Delhi have territorial jurisdiction.
Thus, in view of the fact that payments were being made to defendant no. 2 in HDFC Bank, branch Rajouri Garden, New Delhi 110027 coupled with the principle of debtor has to seek the creditor it can be held that this court has jurisdiction to try and entertain the present suit. In view thereof, this issue is decided in favour of the plaintiff and against the defendant
17. Issue No.4- Whether the plaintiff is entitled for recovery of Rs. 9,82,231/- ? OPP
18. To prove this issue the Ld. Counsel for the plaintiff argued that based on assurances of the defendant no. 2, the plaintiff company started purchasing TDI from defendant no. 1. Accordingly, the plaintiff company entered into a Tripartite Agreement with defendant no. 1 and defendant no. 3 on 11.08.2021 for the purchase of TDI from June 2021 to March 2022. The plaintiff purchased goods as per the terms and conditions of the agreement however it did not receive discounts / rebates as per the agreed terms. Several requests were made by the plaintiff to issue credit notes as per discount policy of defendant no. 3 but defendant no. 1 and 2 failed to issue credit notes as per the terms.
CS (Comm.) No. 271/2024 -19-On the other hand Ld. Counsel for the defendant no. 1 and 2 has argued that the plaintiff company placed orders in excessive quantities to avail benefit of scheme of discounts launched by defendant no. 3. But the plaintiff company failed to procure the agreed quantity. Thus, the plaintiff company was not entitled for the benefits of discounts as per term and conditions of Tripartite agreement.
19. I have perused Tripartite Agreement dated 11.08.2021 exhibited as Ex. PW 1/5. As per this agreement the period of contract was from June 2021 + July 2021 (24Mt) to March 2022 (56 Mt). As per this agreement, two different discount schemes were offered. The same are as follows :-
Quantity wise Offered Monthly Discount per Mt Annual Discount quantity slab per Mt 47-95 Rs. 2,600/- Rs. 600/-
95 Rs. 2,800/- Rs. 800/- Three months discount
Three months special discount Discount per Mt Duration July 2021 to September 2021 Quantity commitment per 56 Mt month Eligible Slab Below 100 Eligible Discount Rs. 3,000/-CS (Comm.) No. 271/2024 -20-
The plaintiff has mentioned in the plaint that as per the ledger account an outstanding total balance of Rs. 1,69,866/- is due as on 01.04.2023. The defendant no. 1 and 2 has duly confirmed this fact in the written statement. The defendant no. 1 in its reply to the legal notice dated 18.07.2023 exhibited as Ex-P 11 has admitted that an amount of Rs. 1,69,866/- is due towards the plaintiff. Thus, in view of clear admission, the plaintiff is entitled to recover Rs. 1,69,866/- from the defendant no. 1.
20. Further, plaintiff has pleaded special scheme discount / rebate of Rs. 1,76,000/- for the purchases made from August to October 2020. However, the said period is not covered by the Tripartite agreement as the agreement has been entered between the parties on 11.08.2021. As per the terms of special scheme discount the duration of its applicability is only between July 2021 to September 2021. Thus, the plaintiff is not entitled to recover Rs. 1,76,000/- as it is not covered by the Tripartite agreement.
21. Further, the plaintiff has pleaded special scheme discount / rebate of Rs. 1,68,000/- received by defendant no. 1 and 2 from defendant no. 3 in the name of the plaintiff company but not passed over to the plaintiff in the month of July, 2021. The defendant has denied receiving any such discount and stated that even though a quantity of 56Mt was placed but only 31.97 Mt was actually lifted. However, Ex-P5 shows that a credit voucher of Rs. 1,45,000/- was issued in favour of the plaintiff. If we divide this amount with Rs.2600 i.e; the monthly discount provided as per the tripartite agreement, the total quantity comes CS (Comm.) No. 271/2024 -21- to about 56Mt. Thus, the plaintiff had procured TDI of 56 Mt. Defendant has not placed any document to show that 31.97 Mt was lifted and not 56 Mt. Thus, the plaintiff is entitled to Rs. 1,68,000/- (56Mt x Rs.3000/-) as a special scheme discount as per tripartite agreement dated 11.08.2021.
22. Further, the plaintiff has pleaded special scheme discount / rebate of Rs. 1,67,880/- received by defendant no. 1 and defendant no. 2 from defendant no. 3 in the name of the plaintiff company but not passed over to the plaintiff in the month of August, 2021. It is argued by the Ld. Counsel for the plaintiff that in the month of August 2021 the plaintiff had placed an order of 55.960 Mts of TDI to defendant no. 1. As per the monthly discount policy of the defendant no. 3, the plaintiff was entitled to receive the discount/rebate of Rs. 2,600 - per Mt which comes out to Rs. 1,45,496/- (Rupees One Lac Forty-Five Thousand Four Hundred and Ninety Six only). The defendant no. 1 & defendant no. 2 had issued credit note of the said amount to the plaintiff on 30.09.2021. However, on 07.07.2023, the defendant no. 1 had shared the statement of accounts of the plaintiff in its ledger book wherein it had not credited that amount despite the fact that the defendant no.1 and defendant no.2 had issued credit note on 30.09.2021. The defendants no.1 & 2 have closed the plaintiff company's account by issuing a credit note of Rs. 1,23,152/- on 31.03.2022. On the other hand Ld. Counsel for the defendant no. 1 and 2 have argued that even though the plaintiff placed an order of 55.960Mts of TDI from defendant no. 1 but the material was not procured at the booked quantity. The defendant no. 1 and 2 after due verifications from CS (Comm.) No. 271/2024 -22- defendant No.3 pointed out to the plaintiff that quantity of material was not procured to avail the benefits of scheme and accordingly issued credit note of Rs. 1,23,152/- on 31.03.2022.
I have perused a credit note bearing no. CN/21-22/006 exhibited as Ex. P7 issued by defendant no. 1 wherein discount for the month of August 2021 for lifting of TDI weighing 55.960 Mt is issued amounting to Rs. 1,45,496/-. Defendant no. 1 and 2 failed to produce any document to prove that a quantity lesser than 55.960 Mt was lifted by the plaintiff. Nonetheless, the plaintiff admittedly procured 55.960 Mt which is lesser than 56Mt therefore the plaintiff is not entitled to receive special scheme discount as per tripartite agreement dated 11.08.2021.
23. Lastly, the plaintiff has pleaded Rs. 3,00,485/- as GST at the rate of 18% P.A. on the total value of credit notes amounting to Rs. 16,69,361/- issued by defendant no. 1 and 2 during FY 2020-21 and 2021-22. On the other hand Ld. Counsel for the defendant no. 1 and 2 have argued that the liability to pay GST was borne by defendant no. 1 firm hence there is no liability on the plaintiff to pay GST.
The plaintiff has failed to show that the total value of credit note received by the plaintiff from the defendant accounts for Rs. 16,69,361/- on which GST is liable to be paid. Thus, the plaintiff is not entitled to receive GST @18% P.A.
24. Thus, the plaintiff is entitled to Rs. 1,69,866/- + 1,68,000/- that is a total of Rs. 3,37,866/- from the defendants. Therefore, this issue is partly decided in favour of the plaintiff and against the defendants.
CS (Comm.) No. 271/2024 -23-25. Issue No. 5- Whether the plaintiff is entitled for interest on the amount of Rs. 9,82,231/-, if yes at what rate and for what period ? (OPP) The burden to prove this issue is upon the plaintiff. It is contended by Ld. Counsel for defendants that plaintiff is not entitled to interest. The plaintiff has claimed interest @ 18% per annum. Admittedly, no agreement regarding rate of interest was executed between the parties. Reliance can be placed in this regard on the judgment of Central Bank of India Vs Ravindra & Ors MANU/SC/0663/2001 passed by Hon'ble Supreme Court of India. In this judgment it is held that according to stroud's Judicial dictionary of Words and Phrases interest means, inter alia, compensation paid by the borrower to the lender for deprivation of the use of his money. In Secretary, Irrigation Department, Government of Orissa & Ors Vs G. C. Roy Manu/ SC/0297/1992 (1992) 2 SCC 508, it is held that the constitution bench opined that a person deprived of the use of money to which he is legitimately entitled has a right to be compensated for the deprivation, call it by any name. It may be called interest, compensation or damages. This is the principles of Section 34 CPC.
In this judgment, Judgment of Dr. shamlal Narula Vs CIT Punjab MANU/ SC/0109/1964 (53) was also relied upon wherein it is held that interest is paid for the deprivation of the use of the money. In this judgment it is also held that in whatever category "interest in a particular case may be put, it is a consideration paid either for the use of money or for forbearance in demanding it, after it has fallen due, and thus, it is charge for the use of CS (Comm.) No. 271/2024 -24- forbearance of money. In this sense, it is a compensation allowed by law or fixed by parties, or permitted by customs or usage, for use of money, belonging to another, or of the delay in paying money after it has become payable.
Reliance can also be placed on the judgment of Aditya Mass Communication (P) Ltd Vs APSRTC MANU/SC/ 0759/2003 wherein Hon'ble Supreme Court granted interest @ 12% p.a. Reliance can also be placed on the judgment of " M/s IHT Network Limited Vs. Sachin Bhardwaj" in RFA No. 835/2016 & CM Appl.14617/2020 wherein the Hon'ble High Court of Delhi has granted interest @12% per annum. I am of the view that interest claimed by the plaintiff is every excessive and plaintiff is entitled to interest @ 12% p.a. which is reasonable and usually prevailing market rate of interest on the amount of Rs. 3,37,866/- from 01.04.2023 since when the amount was due till realization.
26. RELIEF:
In view of my above discussions, the suit of the plaintiff is partly decreed and a decree of Rs. 3,37,866/- is passed in favour of the plaintiff and against the defendants No. 1 & 2. The plaintiff is also entitled to interest @ 12% per annum on the amount of Rs. 3,37,866/- from 01.04.2023 since when the amount was due till realization. Plaintiff is also entitled to the proportionate cost of the suit. Both the defendants no. 1 & 2 are jointly and severally liable to make the payment. Decree sheet be prepared accordingly. File be consigned to record room, after necessary compliance.
Announced in the (NARESH KUMAR MALHOTRA)
open court on 26.07.2025 District Judge, Comm. Court-06
Digitally signed West, Tis Hazari Courts
NARESH by NARESH
KUMAR Extension Block, Delhi/26.07.2025
KUMAR MALHOTRA
MALHOTRA Date: 2025.07.26
16:36:33 +0530
CS (Comm.) No. 271/2024 -25-