Delhi District Court
Prime Gold Sail Jvc Limited vs M/S Shubham Steel Industries on 8 September, 2025
IN THE COURT OF SH. NARESH KUMAR MALHOTRA :
DISTRICT JUDGE (COMMERCIAL)-06
TIS HAZARI COURTS, WEST: DELHI
CS (COMM) No. 946/2022
CNR No. DLWT010114962022
08.09.2025
Prime Gold SAIL JVC Limited,
Having its Registered Office at:
5/2, Punjabi Bagh Extension,
New Delhi, Delhi-110026.
.....Plaintiff
Vs.
M/s. Shubham Steel Industries,
Through Mr. Shubham Agarwal
Having its Registered Office at:
84/21 Fazal Ganj, Kanpur-208012
....Defendants
Date of filing : 30.11.2022
Date of arguments : 06.09.2025
Date of judgment : 08.09.2025
COMMERCIAL SUIT FOR RECOVERY OF Rs. 43,32,270/-
ALONGWITH PENDENTELITE AND FUTURE INTEREST.
JUDGMENT:
1. Vide this judgment, I am deciding the suit for recovery of Rs. 43,32,270/- along with pendentelite and future interest filed by the plaintiff against the defendant.
2. In the plaint, it is mentioned that the plaintiff is Joint Venture Company of Prime Gold International limited and Steel Authority of India (SAIL). The plaintiff is engaged in manufacturing and production of TMT Bars and enjoys good market reputation. Mr. Kunwarpal Giri is duly authorized on CS (Comm.) No. 946/2022 -1- behalf of plaintiff vide Board Resolution dated 25.01.2021 to file the present plaint, sign affidavits, give undertakings, statements and to do all necessary work in respect of the present case. The defendant is a proprietorship concern of one Mr. Shubham Aggarwal. The defendant is engaged in business of trading/supplying billets (raw material) used for manufacturing TMT Bars. It is mentioned that in the month of February, 2021 plaintiff and defendant came in contact with each other. Defendant has approached the plaintiff at his Registered office at 5/2, Punjabi Bagh Extension, New Delhi-110026 where he expressed his willingness to supply billets to the plaintiff, as plaintiff is engaged in the manufacturing of TMT, wherein, billets is the main component. The defendant also represented to the plaintiff that he will provide billets to the plaintiff at very competitive price without compromising with the quality of material. The defendant gained the trust of the plaintiff by making the representation over the quality of the billets and competitive price. The plaintiff agreed to place orders of billets with the defendant. Initially orders placed by the plaintiff upon the defendant were delivered as per the pre-decided terms interalia covering rate, quality, quantity, date and place of delivery. The price of the billets keep fluctuating and hence plaintiff did not keep high stock of raw material and used to buy/ place orders of raw materials from the defendant with an approximate consumption of 30 days. The plaintiff subsequently started purchasing billets from the defendant. During the course of business a running account was maintained by the plaintiff with defendant wherein the goods supplied and payments made by the defendant in the normal course of business is maintained.
CS (Comm.) No. 946/2022 -2-It is mentioned that mode of communication between the parties were usually informal/ oral. It is mentioned that all the terms of contract/delivery were usually discussed over phones and same were followed by informal written communication by way of Whatsapp messages or otherwise, just for memory sake. In September, 2021, the plaintiff placed following purchase orders with the defendant, which are as under:-
Sr. Date of Particulars Quantity of Rate Balance No. Order order quantity of order
1. 30.08.2021 M.S. Billets 120 MT Rs. 41000/- 95.050 MT
2. 14.09.2021 M.S. Billets 100 MT Rs. 41550/- 14.550 MT
3. 17.09.2021 M.S. Billets 120 MT Rs. 41800/- 49.650 MT It was decided between the plaintiff and defendant that above mentioned orders will be delivered in 7-10 days by the defendant. Defendant has not complied with the same and did not deliver orders placed by the plaintiff on time, consequent to which the plaintiff was constrained to buy products from the open market at last moment. The plaintiff despite placing the orders of billets in advance and defendant herein agreed to supply the billets on a particular rate, quantity and quality but the defendant breached his commitments by not supplying the billets.
The plaintiff was constrained to purchase the billets at much higher price afterwards from the open market, in comparison to what was agreed to be supplied by the defendant. The summary of the price difference at which the plaintiff was constrained to purchase the billets from open market/ other vendors despite having a pre-stipulated rate contract with the defendant are as under:-
CS (Comm.) No. 946/2022 -3-Agreement with Shubham Steel/ Purchased from Open Market (Amit Defendant. Ent.) Date of Rate of Quantity Date of Rate of Quantity Order Order (Rs.) Ordered Order Order (Rs.) Ordered.
30.08.2021 41000/- 95.050/MT 22.10.2021 49800 40.140/MT
14.09.2021 41550/- 14.550/MT 25.10.2021 48600 79.36/MT
17.09.2021 41800/- 49.650/MT 25.10.2021 48600 39.69/MT
Difference Amount 12,90,625/-
It is mentioned that after placement of orders and before the delivery, there was escalation of price of billets and therefore, the defendant abandoned the contract and failed in his commitment to supply the ordered goods in time. As per the plaintiff the rates of supply between the parties were pre-decided and defendant was contractually bound to supply the material of which order was placed at predetermined prices irrespective of escalation or in alternative, must have paid the difference price cost to the plaintiff on his failure to supply the goods. The plaintiff has incurred huge losses due to breach committed by the defendant. It is mentioned that due to escalation in price, billets promised to be delivered to plaintiff, were sold by defendant in open market committing a breach of contract. It is mentioned that the billets supplied by the defendant were of inferior quality, which again resulted in losses to the plaintiff.
The billets supplied by the defendant in September 2021 vide invoices/Bills No. 77,76,82,83 & 84 were put to use by the plaintiff in October/November 2021. When the billets were placed over the rolling mill, for the production of TMT Bars, due to the inferior quality of billets supplied by the defendant, plaintiff's reheating furnace broke down and the entire production was stopped for 5 days, and the plaintiff suffered CS (Comm.) No. 946/2022 -4- layoff charges, due to stoppage of production. The plaintiff was left with no other option and had to bear an additional cost culminating to Rs. 30,18,471.00 towards repair of rolling mill. The plaintiff in this regard has issued a Debit Note dated 15.10.2021 against the defendant for an amount of Rs. 15,42,614/-. The plaintiff has also sent a letter dated 15.10.2021 to the defendant. The plaintiff on various occasions tried to contract the defendant for the quality of the billets supplied by the defendant. The defendant on one pretext or the other, lingered upon the same and did not pay any heed to the requests and reminders made by the plaintiff about the quality of billets. The plaintiff after many requests, called upon the defendant to meet the representative of the plaintiff. The defendant was called at the registered office of the plaintiff for a meeting to discuss the issues. In the said meeting all the issues including the quality of the billets were brought to the knowledge of the defendant by the representative of plaintiff. The defendant assured to make all the losses incurred by the plaintiff on account of failure to supply the goods on time and on account of inferior quality of goods supplied. The plaintiff also issued debit note dated 15.10.2021 for an amount of Rs. 12,90,625/- and Rs. 15,42,614/- on account of faulty supply. It is mentioned that in furtherance of his strategy, the defendant had started writing/ circulating wrong whatsapp messages on the whatsapp groups of billet traders just with malafide intention to defame the plaintiff. The defendant has filed an application under Section 9 of IBC, 2016 before the Hon'ble Tribunal of NCLT, Delhi. The plaintiff has approached District Legal Service Authority for pre-litigation mediation but due to response of the defendant, non-starter report was issued on CS (Comm.) No. 946/2022 -5- 28.03.2022. It is prayed by the plaintiff to pass a decree of Rs. 43,32,270/- in its favour and against the defendant. Plaintiff has also claimed pendent lite interest @ 18 per annum along with cost of the suit.
3. The defendant has filed written statement taking preliminary objections that this court has no territorial jurisdiction to try and entertain the present suit as the invoices relied on by the plaintiff confers the jurisdiction of Kanpur, UP and ousts jurisdiction of any other Court. No cause of action has arisen within the territorial jurisdiction of this Court. The defendant resides and carries out his business in Kanpur, UP and proper quality of goods were supplied to the plaintiff at Gwalior (Madhya Pradesh). The invoices placed on record by the plaintiff towards procurement of billets from open market by the plaintiff are bogus and denied. The alleged invoices in favour of the plaintiff are issued from its entities to whom the defendant has only supplied billets at the instruction of the plaintiff. The invoices of the said parties were also issued in the city of Gwalior (Madhya Pradesh) to the factory address of the plaintiff in Gwalior (Madhya Pradesh). Therefore, no cause of action has arisen within the territorial jurisdiction of this Court. The plaintiff has filed a false suit. The plaintiff filed the fabricated and misleading statement of expenses alleging loss of Rs. 30,18,471/-. It is mentioned that plaintiff is having only its registered office in Delhi and defendant never made any supply of goods at the registered office of plaintiff. It is mentioned that all the supply of goods were made by the defendant at the factory of plaintiff situated in Gwalior, Madhya Pradesh. All the CS (Comm.) No. 946/2022 -6- payments of the defendant were made from the current bank account of the plaintiff maintained in Gwalior, Madhya Pradesh. The plaintiff is not entitled for any amount from the defendant.
In preliminary submissions, it is mentioned that plaintiff has failed to place on record any document which pertains to damages being caused to the plaintiff attributable to the defendant. It is mentioned that in the year 2021, the parties came in contact with each other through mutual business connections and the plaintiff requested the defendant to supply the billets as per its requirement. The defendant being a new player in the market agreed to supply the billets as per the requirement. It is mentioned that no purchase order whatsoever was ever issued by the plaintiff to the defendant and it was agreed by the plaintiff that once the goods are supplied by the defendant at its factory premises in Madhya Pradesh, the payment against the said supply shall be processed from the bank account of the plaintiff maintained in Madhya Pradesh only. The defendant started supplying the goods at the factory premises of the plaintiff situated in Gwalior, Madhya Pradesh. It is mentioned that supplies of all goods were made from Kanpur, Uttar Pradesh to Gwalior, Madhya Pradesh and the supply of the said goods were duly acknowledged and accepted by the plaintiff at Gwalior, Madhya Pradesh without any protest. It is mentioned that plaintiff in the plaint has alleged that due to non-supply of goods by the defendant, the goods were procured by the plaintiff from one M/s. Amit Enterprises but M/s. Amit Enterprises is a related entity of the plaintiff and upon the instructions of plaintiff, the defendant used to supply goods to M/s. Amit Enterprises and bills were raised to the plaintiff. It is mentioned that none of the CS (Comm.) No. 946/2022 -7- official of the plaintiff raised any objections whatsoever with respect to the quality of goods being supplied to it by the defendant for about 8 months. The plaintiff also made part payment in the month of November, 2021 towards the due and outstanding amount. The invoices of the defendant were cleared by the plaintiff through its current account controlled and maintained at Gwalior, Madhya Pradesh. The payments for the goods supplied to M/s. Amit Enterprises were also duly communicated on Whatsapp by the plaintiff. The plaintiff has not produced any document on record to show that any official of the plaintiff ever raised any issue. The plaintiff for the first time in the present suit has alleged that defendant failed to supply the products. The plaintiff has failed to disclose any cause of action whatsoever has ever arisen within the territorial jurisdiction of this Court.
In reply on merits, it is mentioned that no amount is due and payable by the defendant to the plaintiff. It is denied that Mr. Kunwarpal Giri is competent and duly authorized to sign, verify and institute the present suit on behalf of plaintiff. It is admitted that the defendant is a proprietorship firm. The defendant has not disputed the registered office of the plaintiff. As per the defendant in the month of July, 2021, through mutual business connections, the defendant was introduced to the plaintiff for supply of billets for the purpose of manufacturing of TMT. There was negotiations between the plaintiff and defendant and it was agreed that the defendant would supply Billets to the factory of the plaintiff situated in Gwalior, Madhya Pradesh and accordingly raised invoices for supply. It is mentioned that in the month of July 2021, the defendant supplied the first tranche of CS (Comm.) No. 946/2022 -8- billets to the plaintiff and subsequently raised the invoice. The concerned official of the plaintiff stationed at factory situated in Gwalior, Madhya Pradesh thereafter used to convey their demand for the supply of the billets and defendant used to supply the specified quality of billets at the plant of the plaintiff situated in Gwalior, M.P and raised invoice against said supply. It is denied that defendant had made any assurances to the plaintiff in relation to competitive prices. It is mentioned that the concerned officials of the plaintiff stationed at factory premises in Gwalior used to inform the defendant about its requirement and accordingly, the defendant used to supply and dispatch the goods and raise the invoice accordingly. It is not denied that a running account was being maintained with the defendant and the fact that the goods were supplied regularly by the defendant. It is denied that the parties only communicated vide Whatsapp, the defendant has time and again sent emails to the plaintiff. As per the defendant there was no agreement in respect of the rate of supply of billets. Based on the understanding between the parties, the defendant has been supplying billets to the plaintiff since the inception of their trade relations. It is mentioned that the plaintiff from time to time cleared the invoices of the defendant, however, from the month of September 2021, the plaintiff started defaulting in making the payment of the invoices of the defendant against the supply of the billets. The defendant issued the following invoices to the plaintiff which are outstanding:-
Date of Invoice Due/Default Date Amount of Invoice (in Rs.) 16.09.2021 21.09.2021 10,36,583 16.09.2021 21.09.2021 9,86,716 20.09.2021 23.09.2021 15,22,408 CS (Comm.) No. 946/2022 -9- 20.09.2021 23.09.2021 7,40,037 22.09.2021 25.09.2021 12,38,288 The defendant time and again requested the plaintiff to clear the outstanding invoices, however, the plaintiff failed to clear the same. It is mentioned that the invoices placed on record by the plaintiff towards procurement of billets from open markets are also traders of the defendant particularly Amit Enterprises i.e. entity of the plaintiff to whom the defendant had been supplying billets at the request of the plaintiff. This fact is evident from the ledger account statement of Amit Enterprises and the invoices raised by the defendant towards the supply of billets. The plaintiff had been undertaking round-tripping of goods sold by the defendant to Amit Enterprises and then purchasing the same from Amit Enterprises. It is denied that the defendant abandoned the contract, rather he had discharged all his obligations and further entertained all the requests of the plaintiff to upkeep the understanding between the parties. It is mentioned that the plaintiff has failed to put on record a single document with respect of any damages being suffered by it. It is denied that defendant has committed any breach. It is denied that billets supplied by the defendant were of poor quality. It is denied that the plaintiff's rolling machine or reheating furnace broke down due to billets supplied by the defendant. It is denied that two debit notes dated 15.10.2021 were ever issued by the plaintiff.
The letter dated 15.10.2021 was never sent to the defendant and same is fabricated. It is mentioned that the defendant time and again made request to the plaintiff to clear the outstanding amount and sent request emails. The defendant also made part CS (Comm.) No. 946/2022 -10- payment of Rs. 1,50,000/- to the defendant in the month of November, 2021. It is denied that defendant was called at the registered office of the plaintiff to meet its representative. It is mentioned that no meeting whatsoever was ever called upon to discuss about the quality/ quantity or failure of supply of the goods. The defendant has supplied the defect free goods to the plaintiff at its factory office in Gwalior, Madhya Pradesh and same was duly accepted by its concerned officials from time to time without any protest. The defendant never committed any breach whatsoever with respect to the supply of goods. The plaintiff is guilty of manipulation of accounts and suppressing material facts. It is denied that defendant has ever sent any message defaming the plaintiff. It is mentioned that plaintiff being a JV of SAIL has resorted to cause harm to the goodwill of the defendant by alleging that the billets supplied by the defendant were of poor quality. It is denied that the billets supplied by the defendant were of poor quality. Other averments of the plaint are denied.
4. The plaintiff has filed replication and controverted the allegations made in the written statement and further reaffirmed the averments made in the plaint.
5. On the basis of pleadings of the parties, following issues were framed by me on 20.04.2024, which are as under:-
1) Whether this court has jurisdiction to try and entertain the present suit ? (OPP)
2) Whether plaintiff is entitled for the recovery of Rs.
43,32,270/- ? (OPP) CS (Comm.) No. 946/2022 -11-
3) Whether the plaintiff is entitled to interest on the amount of Rs. 43,32,270/-, if yes at what rate and for what period ? (OPP)
4) Relief.
6. In evidence plaintiff has examined Sh. Kunwarpal Giri, AR of plaintiff as PW-1. This witness has filed affidavit on the lines of plaint. This witness has proved copy of the Board Resolution dated 25.01.2021 issued by the plaintiff company in favour of PW-1 as Mark- A, copy of Whatsapp chat messages exchanged between the plaintiff and defendant with respect to the agreement as Mark- B, copies of the invoices raised for the purchase of Billet from open marked as Ex. PW-1/3 (colly), copy of calculation sheet of the expenses of plaintiff due to non-supply by defendant as Ex. PW-1/4, copies of the invoices raised by the defendant as Ex. PW-1/5 (colly), copy of the letter dated 15.10.2021 issued by the plaintiff to the defendant as Ex. PW-1/6, copy of the Debit Note dated 15.10.2021 of Rs. 15,42,614/- issued by the plaintiff as Ex. PW-1/7, copy of the Debit Note dated 15.10.2021 for Rs. 12,90,625/- issued by the plaintiff as Ex. PW-1/8, copy of the notice issued by the defendant under Form 7 under the Insolvency and Bankruptcy, 2016, demanding payment from the plaintiff as Ex. PW-1/10, copy of the Mediation Application form filed by the plaintiff against the defendant before District Legal Service Authority, West, District, Tis Hazari Courts, Delhi as Ex. PW-1/11, copy of the Non-Starter Report dated 28.03.2022 as Mark-C, copy of the Grievance letter dated 06.07.2022 made to SAIL by the defendant as Ex. PW-1/13.
CS (Comm.) No. 946/2022 -12-This witness is duly cross examined by Ld. Counsel for defendant. In cross examination, this witness has stated that he is working with the plaintiff company for the last 15-20 years. This witness has stated that he is working as Personal Secretary to Managing Director of the plaintiff company. He has stated that defendant company has approached the plaintiff for supply/ sale of materials to the plaintiff. He has stated that the plaintiff company is having manufacturing plant at Gwalior (MP). He has stated that the defendant company has started supplying material from September, 2021. He has admitted that no purchase order in writing was issued to the defendant company. He has voluntarily stated that the plaintiff company used to send purchase orders verbally as well as on Whatsapp. He has stated that Mr. Rajeev Bhardwaj (Manager Commercial ) used to send the purchase orders on Whatsapp of the defendant company. He has admitted that the defendant company used to supply the material at the Gwalior plant of the plaintiff company. He has admitted that at Gwalior plant, the plaintiff company used to manufacture TMT Bars. He has stated that the transactions between the plaintiff and defendant were started in September, 2021 and lasted the same month i.e. September, 2021.This witness has stated that he cannot tell the exact month when the meeting between the representatives of the plaintiff and defendant had taken place. This witness has voluntarily stated that this meeting was held in Delhi and Mr. Rajeev Bhardwaj had telephonically talked with the representative of the defendant in October, 2021 in respect of dispute. This witness has admitted that he had not participated in the meeting held in Delhi. He has stated that the representative of the defendant had admitted that CS (Comm.) No. 946/2022 -13- there was lapse on the part of the defendant and also agreed to compensate the plaintiff. He has stated that in the meeting itself a letter was given by the representative of the plaintiff to the representative of the defendant. This witness has stated that he cannot admit or deny, if the plaintiff company had made the payment to the defendant amounting to Rs. 1,50,000/- on 12.11.2021 and a payment of Rs. 1,50,000/- on 19.11.2021. He has stated that when the deficiency in the goods supplied by the defendant was noticed, the plaintiff had purchased the goods from open market. He has stated that due to the supply of defective billets, the heating furnace and rolling mill of the plaintiff company were badly damaged in October, 2021. He has stated that the plaintiff company has purchased the materials from Amit Enterprises, Gwalior and Sambhav Steel, Ghaziabad. He has admitted that after October, 2021 the plaintiff company had not purchased any material from the defendant. He has stated that the representative of the defendant agreed to compensate the plaintiff in respect of the defective material supplied but no compensation/ money was given by the defendant company to the plaintiff. He has admitted that plaintiff has not made the entire payments of the goods purchased from the defendant company. He has admitted that only part payment was made. He has admitted that the defendant company has approached NCLT for recovery of its dues from the plaintiff. He has stated that plaintiff used to make the payment to the defendant company through its various accounts. This witness has stated that he cannot say if the plaintiff company had inspected the goods before purchase. He has admitted that when the furnace heater and rolling mill were damaged, he was not present in the plaint.
CS (Comm.) No. 946/2022 -14-He has stated that the Managing Director of the plaintiff company disclosed about the damage of above mentioned machines. He has stated that due to the damage of the above mentioned articles, the plant of the plaintiff was closed for about one week. He has admitted that the above mentioned machineries were repaired within one week. He has stated that Mr. Rajeev Bhardwaj, Commercial Manager of the plaintiff company again said Managing Director of the plaintiff company had disclosed him about the damage of the above mentioned machines due to use of the materials supplied by the defendant company. He has admitted that part payments were made by the plaintiff company to the defendant. This witness has stated that he cannot admit or deny, if Amit Enterprise and Shambhav Steel had only supplied the materials of defendant company to the plaintiff.
7. Plaintiff has also examined Sh. Rajeev Bhardwaj S/o Sh. Shiv Kumar Sharma as PW-2. This witness has filed affidavit in evidence. This witness is duly cross examined by Ld. Counsel for defendant. During cross examination, this witness has stated that he is working as a Manager Commercial in the plaintiff company. This witness has stated that he used to sit at the registered office of the plaintiff company at Punjabi Bagh. He has stated that the plaintiff company used to keep stocks of billets approximately 200 to 300 Matric Tons. This witness has stated that he used to place orders with the defendant approximately once in a week. This witness has stated that he had placed orders lastly with the defendant approximately in September, 2022. He has admitted his mobile number as 8700349736. This witness has stated that he used to communicate with Mr. Shubham Aggarwal, who is CS (Comm.) No. 946/2022 -15- probably the proprietor of the defendant. This witness has sated that he cannot tell without checking the record, if plaintiff had made any payment to the defendant after closing of plant. This witness has stated that he had attended 1-2 negotiation meetings with the defendant at Delhi office.
8. Plaintiff has examined Sh. Sanjeev Agarwal S/o Sh. Narnarayan Agarwal, Proprietor of Amit Enterprises as PW-3. This witness has proved Tax Invoices as Ex. PW-3/1 (colly). In affidavit in evidence, he has stated that in the month of end September 2021, he received a phone call from the representative of the plaintiff, who informed him that they are in urgent requirement of M.S. Billets. Accordingly, the plaintiff telephonically placed orders for supply of billets on an urgent basis and asked him to supply the required billets within 15 to 20 days. This witness has stated that he has supplied the goods to the plaintiff on an urgent basis and he has raised invoices against the said supply.
This witness is duly cross examined by Ld. Counsel for defendant. During cross examination, this witness has stated that he had himself written in Ink Pen at point A and B on Ex. PW3/A. This witness has admitted that he had not made my initials on both the points. This witness has stated that he is also in the business of trading of billets. This witness has stated that he procured the billets from the manufacturers from where he got suitable price. He has admitted that rate of the billets changes every day. This witness has stated that he is having dealings with the plaintiff for the last 5-6 years. He has stated that Mr. Rajeev Bhardwaj used to place orders upon him on behalf of the CS (Comm.) No. 946/2022 -16- plaintiff. This witness has stated that he used to handle the orders placed upon his firm. This witness has stated that he used to supply the goods to the purchasers within 05,10,20 and one month from the date of placing of order. This witness has stated that he has no transactions with the defendant. He has stated that as far as his knowledge is concerned, he has not purchased any billets from the defendant. A specific question was asked to this witness that whether he had purchased goods from the defendant or not and after seeing the document he has submitted that he cannot admit or deny the same. This witness has stated that he cannot tell the specific date and month when the plaintiff approached him for purchase of the goods. This witness has stated that he cannot say if he had delivered the goods within 15/ 20 days to the plaintiff from the date of placing orders. This witness has stated that he had supplied the Billets to the plaintiff at the market rate. This witness has stated that he had sent the goods to the plaintiff by road transport. This witness has stated that he cannot tell exactly as to how much invoices he had raised upon the plaintiff. He has admitted that no agreement regarding price and quality of goods was executed between him and the plaintiff.
9. On the other hand, defendant has examined himself as DW-1. This witness has filed affidavit on the lines of written statement. This witness has relied on copy of UDDYAM Registration Certificate of defendant. This witness has proved copies of invoices raised by the defendant in favour of plaintiff as Ex. DW1/2 (colly), Copy of transport receipt showing supply by the defendant as Ex. DW1/3, Copy of ledger statement CS (Comm.) No. 946/2022 -17- maintained by the defendant as Ex. DW1/4, Copy of bank statement of defendant as Ex. DW1/5, Copy of reminder emails sent by the defendant to the plaintiff as Ex. DW1/6 and Ex. PW1/7, Copy of cancelled cheque of the plaintiff as Ex. DW1/9, Ledger account statement of Amit Enterprises maintained by the defendant as Ex. DW1/10, Declaration U/o XI Rule 6(3) of Commercial Courts Act as Ex. DW1/11.
This witness is duly cross examined by Ld. Counsel for plaintiff. During cross examination, this witness has stated that he is the proprietor of the defendant. He has stated that Mr. Rajiv used to make dealings on behalf of plaintiff with him. This witness has stated that he used to supply the goods from Raigarh ( Chattisgarh) to the plaintiff at Gwalior. He has admitted that there is no signatures of the plaintiff or his representative on the invoices. He has admitted that there is no mention of interest on the invoices Ex. DW1/2 (colly). He has voluntarily stated that after some transactions, the plaintiff has agreed to pay the interest and thereafter, he started mentioning rate of interest on the invoices. He has admitted that there is no separate agreement regarding rate of interest between him and the plaintiff. This witness has admitted that he had approached Hon'ble NCLT for recovery of dues against the plaintiff. This witness has admitted that he used to supply goods to Amit Enterprises and Amit Enterprises used to supply goods to the plaintiff. He has stated that on all the bills /invoices raised with M/s Amit Enterprises there is also mention of name of the plaintiff. He has stated that no suit against Amit Enterprise was filed by the defendant. He has voluntarily stated that he had received entire payment from CS (Comm.) No. 946/2022 -18- Amit Enterprise. This witness has stated that he used to receive payment on delivery of the goods.
10. I have heard Ld. Counsels for both the parties at length and perused the record carefully.
11. My issue-wise findings are as under:-
12. Issue no. 1 : Whether this Court has jurisdiction to try and entertain the present suit ? OPP
13. To prove this issue the plaintiff has argued that in paragraph no. 32 of the plaint, the plaintiff has averred that it is maintaining its registered office at Punjabi Bagh, Delhi, wherein various meetings and discussions have taken place with the defendant. The purchase orders have been placed from the registered office of the plaintiff. Debit note as well as letter dated 15.10.2023 have been issued from the registered office of the plaintiff.
14. On the other hand Ld. Counsel for the defendant has argued that the defendant is a sole proprietor based in Kanpur, Uttar Pradesh. The goods have been supplied from Kanpur, Uttar Pradesh to Gwalior, Madhya Pradesh. No cause of action whether wholly or in part has arisen in the jurisdiction of this Court. The place where the plaintiff is carrying out business or from where legal notice has been sent cannot be the sole basis for vesting territorial jurisdiction.
CS (Comm.) No. 946/2022 -19-15. It is pertinent to mention that the defendant had raised the issue of territorial jurisdiction earlier and had accordingly filed an application under Order VII Rule 11 for rejection of the plaint. This Court vide Order dated 15.02.2024 had dismissed the application. Under Order VII Rule 11 this court had limited purview restricted to examination of plaint and documents attached therewith. Since both the parties have led evidence. I am deciding this issue on the basis of evidence adduced by both the parties.
16. The law on determining territorial jurisdiction is undisputed. Section 15 CPC deals with the place of suing. It provides that every suit shall be instituted in the Court of the lowest grade competent to try it. Sections 16 to 20 CPC deals with territorial jurisdiction of civil courts. Section 20 CPC provides that suits to be instituted where defendants reside or cause of action arises. It reads as under:-
20. Other suits to be instituted where defendants reside or cause of action arises.-- Subject to the limitations aforesaid, every suit shall be instituted in a Court within the local limits of whose jurisdiction
--
(a) the defendant, or each of the defendants where there are more than one, at the time of the commencement of the suit, actually and voluntarily resides, or carries on business, or personally works for gain; or
(b) any of the defendants, where there are more than one, at the time of the commencement of the suit, actually and voluntarily resides, or carries on business, or personally works for gain, provided that in such case either the leave of the Court is given, or the defendants who do not reside, or carry on business, or personally works for gain, as aforesaid, acquiesce in such institution; or CS (Comm.) No. 946/2022 -20-
(c) The cause of action, wholly or in part, arises.
Therefore, it is clear that a civil suit is to be instituted where the defendant resides or cause of action has arisen.
17. As per PW1/13 it is clear that the defendant's place of business is in Kanpur Nagar, Uttar Pradesh. Tax invoice PW1/5 and DW1/2 show that goods were dispatched from Kanpur, Uttar Pradesh to Gwalior, Madhya Pradesh. Debit note PW1/7 and PW1/8 also mentions the address of the plaintiff as Industrial Area Bilaua, Tehsil Darbar District, Gwalior (MP) and the address of the defendant as 84/21 Fazal Ganj Kanpur, Uttar Pradesh.
18. In the cross-examination PW-1 admitted that the defendant company used to supply the materials at the Gwalior plant of the plaintiff company. This witness also admitted that the plaintiff company used to manufacture TMT Bars at Gwalior Plant. This witness could not tell when the meeting between the representative of the plaintiff and defendant had taken place. This witness voluntarily stated that this meeting was held in Delhi and Mr. Rajeev Bhardwaj telephonically talked with the representative of the defendant in October 2021 in respect of the dispute. However, this witness admitted that he had not participated in the meeting held in Delhi. In his evidence affidavit (Paragraph 4), this witness clearly stated that the defendant approached the plaintiff at its New Delhi registered office in February 2021 to express willingness to supply billets. However, it is pertinent to mention that he completely failed to substantiate the same during cross-examination.
CS (Comm.) No. 946/2022 -21-19. Further, PW2 stated that he sits at the registered office of the plaintiff company at Punjabi Bagh and he used to place orders of billets on behalf of the plaintiff company. However, the plaintiff has not produced any evidence to suggest that orders were placed from Punjabi Bagh, Delhi. This witness stated that he had attended 1-2 negotiation meetings with the defendant at the Delhi office. However, the evidence affidavit of PW2 is silent about this fact.
20. Plaintiff has stated that the accounts have been maintained in the registered address of the plaintiff company at Punjabi Bagh, Delhi. However, no evidence has been led in this respect. Furthermore, the defendant is maintaining its bank account at HDFC Bank, Kanpur Civil Lines, Uttar Pradesh, Krishna Tower, 15/63 Civil Lines, Kanpur. Perusal of this bank statement shows that the plaintiff used to make payment in this bank account.
21. It is clear the defendant is carrying out his business in Kanpur, Uttar Pradesh. It is also not disputed that the goods were dispatched from Kanpur, Uttar Pradesh to Gwalior, Madhya Pradesh. It is also proved that the plaintiff made payment to the defendant in his bank account situated at Kanpur Civil Lines, Uttar Pradesh, Krishna Tower, 15/63 Civil Lines, Kanpur. No evidence has been adduced in respect of any meeting that was held between the plaintiff and the defendant in plaintiff's registered office at Punjabi Bagh, Delhi. Therefore, the plaintiff failed to prove accrual of cause of action whether partly or wholly in the jurisdiction of this Court. Ld. Counsel for the CS (Comm.) No. 946/2022 -22- defendant has relied on M/s Carmel Overseas Ltd. Vs Sturdy Industries Ltd. (2010 SCC Online Del 3535 passed by the Hon'ble High Court of Delhi. Relevant paragraphs of this judgement is as under :-
22. These are the facts which have not been specifically pleaded in the plaint and even in this para, it is not specifically disclosed as to how many meetings and when were they held in Delhi, which decisions took place in Delhi and where the contract was finalized or executed?
23. From perusal of the legal notice dated 19th December, 2006, it cannot be said that payment was to be made at Delhi. Receipt of reply to the notice by the plaintiff at Delhi, as disclosed above, does not confer any territorial jurisdiction on this Court. It seems that para 19 has been drafted in such a manner so as to confer territorial jurisdiction on this Court, which otherwise it does not have.
22. In M/s Carmel (Supra) the Hon'ble High Court of Delhi returned the plaint and original documents of the plaintiff to be presented before the court of competent jurisdiction stating lack of territorial jurisdiction.
23. I am of the view that this Court has no jurisdiction to try and entertain the present suit and accordingly, this issue is decided in favour of the defendant and against the plaintiff.
CS (Comm.) No. 946/2022 -23-24. Issue no. 2 : Whether the plaintiff is entitled for the recovery of Rs. 43,32,270/- ? OPP
25. At the very Outset, I may observe that the provisions of Section 2 (1) (c)(xviii) of Commercial Courts Act, 2015 are very clear which reads as under:-
(c) "commercial dispute" means a dispute arising out of-
(i) ordinary transactions of merchants, bankers, financiers and traders such as those relating to mercantile documents, including enforcement and interpretation of such documents;
(ii) export or import of merchandise or services;
(iii) issues relating to admiralty and maritime law;
(iv) transactions relating to aircraft, aircraft engines, aircraft equipments and helicopters, including sales, leasing and financing of the same;
(v) carriage of goods;
(vi) construction and infrastructure contracts, including tenders;
(vii) agreements relating to immovable property used exclusively in trade or commerce.
(viii) franchising agreements;
(ix) distribution and licensing agreements;
(x) management and consultancy agreements;
(xi) joint venture agreement;
(xii) shareholders agreements;
(xiii) subscription and investment agreements pertaining to the services industry including outsourcing services and financial services;
(xiv) mercantile agency and mercantile usage;
(xv)partnership agreements;
(xvi) technology development agreements; (xvii) intellectual property rights relating to registered and unregistered trademarks, copyright, patent, design, domain names, geographical indications and semiconductor integrated circuits;
(xviii) agreement for sale of goods or provision of services;CS (Comm.) No. 946/2022 -24-
(xix) exploitation of oil and gas reserves or other natural resources including electromagnetic spectrum; (xx) insurance and re-insurance;
(xxi) contracts of agency relating to any of the above; and (xxii) such other commercial disputes as may be notified by the Central Government.
26. The provisions of Section 2 (1) (c) (xviii) of Commercial Courts Act as above are very much clear. Sale of goods are governed by Sale of Goods Act, they pertain to movable properties, any dispute of sale or agreement to sale of goods of specified value do come within the jurisdiction of Commercial Courts Act. The clause also includes the services and guarantee given for the goods sold. The service or guarantee may be oral or written. Therefore, the facts which alleged in the plaint comes under the Commercial disputes.
27. Secondly, now the question arises whether this Court has the pecuniary jurisdiction to adjudicate the matter which is dispute. In this regard, the provisions of Section 3 of Commercial Courts Act, 2015 provides that:
Section 3 : Constitution of Commercial Courts:
(1) The State Government, may after consultation with the concerned High Court, by notification, constitute such number of Commercial Courts at District level, as it may deem necessary for the purpose of exercising the jurisdiction and powers conferred on those Courts under this Act:
[Provided that with respect to the High Courts having ordinary original civil jurisdiction, the State Government may, after consultation with the concerned High Court, by notification, constitute Commercial Courts at the District Judge level:CS (Comm.) No. 946/2022 -25-
Provided further that with respect to a territory over which the High Courts have ordinary original civil jurisdiction, the State Government may, by notification, specify such pecuniary value which shall not be less than three lakh rupees and not more than the pecuniary jurisdiction exercisable by the District Courts, as it may consider necessary. ] 3[1A) Notwithstanding anything contained in this Act, the State Government may, after consultation with the concerned High Court, by notification, specify such pecuniary value which shall not be less than three lakh rupees or such higher value, for whole or part of the State, as it may consider necessary.]
28. Admittedly, the Commercial Court Act was amended on 03.05.2018 and by virtue of the amendment and by virtue of the notification, the pecuniary value of the Commercial Courts Act shall not be less than Rs. 3,00,000/-. In the present case, the claim amount which is shown in the plaint is of Rs. 43,32,270/-. So, commercial court has jurisdiction to try and entertain the present suit.
29. To prove this issue the Ld. Counsel for the plaintiff has argued that requisite quantity and quality of billets were not supplied by the defendant. Since, there was a deficit of supply by the defendant, the plaintiff was compelled to purchase billets from the open market at an escalated price. Due to the fault of the defendant to supply requisite quantity of billets, the plaintiff had to bear the cost of escalated goods of Rs. 12,90,625/-. Further, the machinery of the plaintiff broke down because of substandard billets supplied by the plaintiff and the production was halted for CS (Comm.) No. 946/2022 -26- 5 days. The plaintiff had to bear additional cost of Rs. 30,18,471/- for repairing.
30. On the other hand the Ld. Counsel for the defendant has argued that the plaintiff has failed to prove damage caused to its machinery and losses suffered because of it. The transactions between the plaintiff and the defendant were not time bound thus the plaintiff has failed to prove urgency in procuring billets from the defendant. The plaintiff is claiming losses based on assumptions and surmises.
31. To examine this issue, this Court needs to look into two aspects whether any losses were incurred by the plaintiff and whether the plaintiff procured the material from other suppliers in urgency at escalated rate.
32. The Ld. Counsel for the plaintiff has stated that the defendant supplied substandard billets which were put to use by the plaintiff over the rolling mill, unexpectedly it caused the furnace to break down and the entire production was halted for 5 days. PW-1 admitted in his cross-examination that he was not present in the plant when the furnace heater and rolling mill were damaged. This witness stated that the managing director of the plaintiff company disclosed him about the damage caused to the machinery. However, the plaintiff has not produced its managing director to prove that the machinery was damaged due to the material/billets supplied by the defendant. This witness also stated that the damaged machineries were repaired within one week per contra the plaintiff has not attached any repair bill to CS (Comm.) No. 946/2022 -27- show that the machinery at the plaintiff's plant were damaged and plaintiff suffered losses for the same. PW2 also made a similar statement in his cross-examination however no evidence has been led in support the claim that machinery was damaged and losses were incurred in its repair. Further, neither PW-1 nor PW-2 were at the plant of the plaintiff when the machinery broke down and the plant was closed for 5 days. Therefore, testimony of PW-1 and PW-2 is nothing but hearsay. No other cogent evidence has been adduced to show that the plant of the plaintiff company was halted for 5 days. It is also claimed that the defendant assured to compensate for the losses suffered by the plaintiff however no communication in this respect has been placed on record. Thus, the plaintiff has failed to adduce any documentary evidence to show that loss of Rs. 30,18,471/- was borne by the plaintiff to repair the furnace and rolling mill.
33. The Ld. Counsel for the plaintiff has alleged that due to deficient and delayed supply of billets he had to purchase billets from open market at an escalated rate and suffered losses of Rs. 12,90,625/-. Plaintiff has relied on Mark B to show the quantity that was requested by the plaintiff and PW1/5 to show the quantity supplied by the defendant. However, PW2 has not attached correct certificate under section 63 of BSA, 2023. In this certificate details of mobile phone, IMEI no. and other necessary device information is not provided. Furthermore, PW2 has only mentioned his phone number. There is no whisper about the defendant's phone number in this certificate with whom PW2 used to deal with. Therefore, Mark-B cannot be relied upon.
CS (Comm.) No. 946/2022 -28-34. Plaintiff has not attached any complaint made to the defendant pertaining to deficient quantity. Plaintiff has also not attached any evidence to show that a contractual quantity of billets were agreed between the parties before its supply. It is pertinent to note that PW-1 admitted that the plaintiff had not made the entire payments of the goods / material purchased from the defendant. This witness also admitted that only part payments were made to the defendant. However, this witness failed to admit or deny payment of Rs. 1,50,000/- on 12.11.2021 and Rs. 1,50,000/- on 19.11.2021. Perusal of the bank statement of the defendant DW1/5 clearly shows that plaintiff has made payment to defendant through RTGS on 15.09.2021 of Rs. 1,50,000/- and through NEFT on 19.11.2021 of Rs. 1,50,000/-. Thus, it is clear that there was no predetermined quantity between the plaintiff and the defendant. The plaintiff has also not raised any complaint with the defendant in respect of the quantity of the billets supplied. The plaintiff has also made part payments in respect of the goods supplied.
35. The plaintiff has further alleged that the contract between the plaintiff and the defendant was time bound and due to delay in supply of billets, the plaintiff had to purchase billets from the open market at higher price. As such it is not the case of the plaintiff that any written contract or agreement has been entered between the parties. PW-2 in his cross examination stated that he used to place orders with the defendant approximately once a week. The plaintiff and the defendant had business transactions in the month of September 2021 and in respect of the same tax invoices PW1/5 and DW1/2(colly) have been issued. Perusal of CS (Comm.) No. 946/2022 -29- these invoices show that details of delivery have also been mentioned. As per these invoices goods were supplied on the following dates in the month of September :-
S. No. Invoice No. Date of invoice
1. 68 01.09.2021
2. 69 02.09.2021
3. 70 04.09.2021
4. 71 05.09.2021
5. 72 11.05.2021
6. 73 11.09.2021
7. 74 15.09.2021
8. 75 15.09.2021
9. 76 15.09.2021
10. 77 16.09.2021
11. 78 16.09.2021
12. 79 18.09.2021
13. 82 20.09.2021
14. 83 20.09.2021
15. 84 22.09.2021
36. In the month of September, 2021 the defendant dispatched goods regularly on smaller intervals. Since the plaintiff has failed to prove the dates on which the orders were placed, it cannot be established that the defendant caused any delay in the dispatch of the billets.
CS (Comm.) No. 946/2022 -30-37. The plaintiff claims that it had to place urgent orders with Amit Enterprises and Sambhav Steel to meet its need. Plaintiff has also placed invoices tax invoices PW1/3 (colly). Perusal of these invoices show that goods were supplied on the following dates :-
S. Invoice No. Date of invoice Entity
No.
1. 0142 26.10.2021 Amit Enterprises
2. 115 15.10.2021 Sambhav Steels
3. 0131 23.10.2021 Amit Enterprises
4. 0139 25.10.2021 Amit Enterprises
5. 0138 25.10.2021 Amit Enterprises
Perusal of these invoices show that the plaintiff started placing orders with other entities only after 23 days. If the billets were required on an urgent basis then the plaintiff should have placed order immediately after the last date of purchase order with the defendant i.e; 22.09.2021.
38. Sh. Sanjeev Aggarwal proprietor of Amit Enterprise appeared as PW3. This witness admitted that he is having transactions with the plaintiff since the last 5-6 years. This witness admitted that he used to supply goods to the purchaser within 05, 10, 20 and 1 month from the date of placing the orders. The testimony of the PW3 clearly shows that the goods were not dispatched on an urgent basis.
CS (Comm.) No. 946/2022 -31-39. It is also the case of the defendant that the plaintiff has colluded with the PW3 to raise demands against the defendant. PW-3 stated that he had no transaction with the defendant. He also stated that as far his knowledge is concerned, he has not purchased any billets from the defendant. However, after seeing the tax invoices from page no. 79 to 95, this witness stated that he cannot admit or deny these documents. If the PW3 was so certain about not having any transactions with the defendant then he should have denied the tax invoices. Thus, testimony of PW3 clearly shows that plaintiff and PW3 have colluded with each other.
40. Ld. Counsel of the defendant has also drawn my attention towards tax invoices PW1/5 wherein it is mentioned that goods were directly supplied from Mahashiva Steel and Alloys LLP to the plaintiff. This is in consonance with invoice DW1/3 wherein it is mentioned that defendant is the buyer of billets, consignor is Mahashiva Steel and Alloys LLP and consignee is plaintiff. It is clear that the plaintiff has colluded with the suppliers of the billets against the defendant.
41. Plaintiff has also stated that the billets were procured from the defendant at a stipulated rate and the plaintiff suffered losses as it had purchased billets at higher price. No documents have been placed on record to show that there was an agreed rate between the plaintiff and defendant in respect of supply of billets. PW1 in his cross-examination stated that prices of billets change daily mostly. PW2 in cross-examination was asked at what rate CS (Comm.) No. 946/2022 -32- did he place orders with the defendant company to which he replied whatever the market rate of billets the order is placed at that rate. PW3 in his cross-examination admitted that the price of billets changes everyday and he supplied billets to the plaintiff at the market rate. Thus, the plaintiff failed to show that any fixed rate was agreed between the plaintiff and the defendant.
42. The plaintiff has failed to establish that the machinery was damaged due to the billets supplied by the defendant or that any expenditure was incurred towards its repair. The plaintiff has also not proved the existence of urgency in the procurement of billets or its bona fide in purchasing from the open market. Further, no fixed rate between the parties has been established nor has the plaintiff shown that it suffered losses on account of urgent purchases at escalated prices. Accordingly, this issue is decided in favour of the defendant and against the plaintiff.
43. Issue no. 3 : Whether the plaintiff is entitled to interest on the amount of Rs. 43,32,270/- , if yes at what rate and for what period ? OPP As I have decided issue no. 2 in favour of the defendant and against the plaintiff, this issue is also decided in favour of the defendant and against the plaintiff.
44. RELIEF:
In view of my above discussions, I am of the view that the suit filed by the plaintiff is without any merits and same is hereby dismissed with no order as to cost. Decree sheet be prepared CS (Comm.) No. 946/2022 -33- accordingly. File be consigned to record room, after necessary compliance.
Announced in the (NARESH KUMAR MALHOTRA)
open court on 08.09.2025 District Judge, Comm. Court-06
West, Tis Hazari Courts
Extension Block, Delhi/08.09.2025
Digitally
signed by
NARESH
NARESH KUMAR
KUMAR MALHOTRA
MALHOTRA Date:
2025.09.08
16:22:34
+0530
CS (Comm.) No. 946/2022 -34-