Delhi District Court
Bipin Kumar Gupta vs Roots Cooling Systems Private Limited on 16 May, 2024
IN THE COURT OF SH. AJAY KUMAR JAIN:
DISTRICT JUDGE COMMERCIAL COURT 03 - SOUTH EAST
DISTRICT, SAKET COURTS, NEW DELHI.
CS DJ 93/21
BIPIN KUMAR GUPTA
Proprietor of Lakshmi Steel Traders
Plot No. 441, Phase-II,
U-Vihar, Gurgaon, Haryana-122001
Also At :
Shop No. 250, ,Loha Mandi,
B.S. Road, Ghaziabad, U.P.
....Plaintiff
Versus
ROOTS COOLING SYSTEMS PRIVATE LIMITED
Regd. Office At:
B-20, Iind Floor, Kailash Colony, New Delhi,
Pin- 110048
Also At : B-53, Hosiary Complex, Phase-II,
NOIDA- 201305
....Defendant
Date of Institution : 30.01.2021
Date of final arguments heard : 09.05.2024
Date of Judgment : 16.05.2024
JUDGMENT :
1. Vide this judgment, I shall decide the present suit for recovery of Rs 46,46,746/- alongwith interest, filed on behalf of the plaintiff.
2. The present suit is filed as a summary suit under Order 37 CPC for recovery of Rs. 46,46,746/- alongwith interest, however registered as ordinary suit by Ld. Predecessor. The present suit is also filed against defendant no. 2 Anoop Saxena and defendant no. 3 Rajiv Saxena, directors CS DJ 93/21 Dt. 16.05.2024 pg. 1 of 32 Bipin Kumar Gupta Vs. Roots Cooling System Pvt. Ltd of the defendant company but vide order dated 01.02.2021, it is observed by the Ld. Predecessor that both the directors have no liability to pay the dues, consequently the plaintiff is directed to amended memo of parties, then amended memo of parties is filed.
3. Brief facts of the case are that plaintiff is the proprietor of Lakshmi Steel Traders, and manufacturer of G.P. Sheets, M.S. Angle, M.S. Tube etc. and other steel materials. The plaintiff being manufacturer and trader of the various steel items selling its material through invoices to several purchasers. Defendant is a private ltd. company which intended to purchase various material manufactured by the plaintiff. Plaintiff supplied various materials to the defendant as and when the demand was raised against the invoices. The defendants were making payment time to time against the raised invoices to the plaintiff and the plaintiff was maintaining the ledger account for the sale and purchase by the defendants against the invoices. The plaintiff is maintaining an open and running account in the regular course of business. As per the said account there was an outstanding balance in the defendants' account as on March, 2019 of Rs. 99,46,746.60/- for the supplied made to the defendants by the plaintiff, however, the defendants despite requests not cleared the said amount. Defendants in this regard sent a letter dated 06.04.2019 acknowledging and admitting that their major funds getting blocked thus unable to make the payment in time, and requested that the outstanding payment will be made by April end and May 2019. The similar letter by the defendant no. 2 was again sent to the plaintiff on 15.04.2019.
4. The defendant company, however, made a part payment of Rs. 53,00,000/- on various dates between May, 2019 to November, 2019, CS DJ 93/21 Dt. 16.05.2024 pg. 2 of 32 Bipin Kumar Gupta Vs. Roots Cooling System Pvt. Ltd therefore, the balance amount remained due and pending to the tune of Rs. 46,46,746/-. The present suit is filed for claiming the said dues and relief prayed as under :
(i) Pass a decree for a principal sum of Rs.46,46,746/-
(Forty-Six Lacs, Forty-Six Thousands, Seven Hundred and Forty-Six only) in favour of the plaintiff against the defendants;
(ii) Pass a decree for interest @24% per annum from the date when the balance amount became due and also grant interest for pendent lite and future interest in favour of the plaintiff against the defendant;
(iii) award the cost of the suit alongwith litigations expenses in favour of the plaintiff and against the defendants;
(iv) pass any other order in the facts and circumstances of the case in favour of the plaintiff as this Hon'ble Court deem fit in the interest of justice.
5. In written statement, it is stated that the plaintiff miserably failed to show how such huge amount was due even after payment of Rs. 53,00,000/-. Perusal of the ledger filed by the plaintiff, it appears that between June 2018 and August 2018, the plaintiff has supplied goods to the defendant vide 11 alleged invoices valuing about Rs. 50,00,000/-, however plaintiff has filed 8 alleged invoices along with the suit value around Rs. 42,68,000/-. There is no averments for not filing the other invoices by the plaintiff alongwith suit. Perusal of the ledger and the alleged invoices suggest that invoices are fake, forged and ante-dated. Invoice bearing no. 152 and 79 dated 02.08.2018 and 04.06.2018 respectively for total sum of more than Rs. 15,00,000/- do not even mentioned in the ledger itself. The plaintiff unable to show the outstanding amount after payment of Rs. 53 lakh, and the last payment towards the invoices was paid by the defendant CS DJ 93/21 Dt. 16.05.2024 pg. 3 of 32 Bipin Kumar Gupta Vs. Roots Cooling System Pvt. Ltd on 25.11.2019. After receiving the payments from the defendants, plaintiff never raised any objection on payments or invoices.
6. On 13.09.2022, the affidavit of admission/denial of documents filed by the defendant, however the matter was referred to mediation cell but the mediation failed. Thereafter, the replication was filed by the plaintiff.
7. In replication, it is stated that this court has jurisdiction as defendants' registered office falls withing the jurisdiction of this court. Defendants only made part payment of Rs. 53,00,000/- out of the total amount of Rs. 99,46,746.60/- and balance amount still pending . The defendant vide its letters dated 06.04.2019 and 15.04.2019 admitted the amount raised through invoices and sought time to pay the outstanding dues. The defendants never raised any objections regarding quality of material supplied and also for outstanding balance.
8. On completion of pleadings, vide order dated 11.04.2024 issues were framed which are reproduced as under :
(1) Whether the plaintiff is entitled to a decree of recovery of Rs. 46,46,746/ (Rupees Forty Six Lacs Forty Six Thousand Seven Hundred and Forty Six only)? OPP (2) Whether the plaintiff is entitled to interest, if yes, then at what rate?
(3) Whether the plaintiff is entitled to costs of the present suit? OPP (4) Whether the suit of the plaintiff is not maintainable? OPD (5) Whether the plaint is entitled to be returned under order VII rule 10 CPC as the court has no jurisdiction to try and entertain the present suit? OPD (6) Relief.
CS DJ 93/21 Dt. 16.05.2024 pg. 4 of 32 Bipin Kumar Gupta Vs. Roots Cooling System Pvt. Ltd
9. Thereafter, the present suit was referred to Ld. Local Commissioner for recording of evidence. In the meanwhile, the defendant filed an application under Order 14 Rule 2 CPC for framing preliminary issue of jurisdiction which was dismissed by this court vide order dated 19.05.2023.
The said order was challenged by the defendant before the Hon'ble High Court of Delhi. Hon'ble High Court vide order dated 04.07.2023 in CM (M) 216/2023 dismissed the said petition subject to cost of Rs. 5,000/-.
10. During the proceedings before the Ld. Local Commissioner, the defendant filed another application under Order 13 Rule 3 CPC for de- exhibiting the documents, however in the meanwhile, the plaintiff also filed application under section 151 CPC to file certificate under section 65 B of Evidence Act as well as under Order 11 Rule 1 r/w section 151 CPC for seeking permission to file additional documents. Vide order dated 14.08.2023 this court dismissed the application under Order 13 Rule 3 CPC filed by the defendant, however allowed the application under Order 11 Rule 1 r/w section 151 CPC and an application under section 151 CPC filed by the plaintiff. The said order dated 14.08.2023 was challenged before the Hon'ble High Court in CM(M) 1343/23, however the Hon'ble High Court vide order dated 04.09.2023 dismissed the said petition subject to cost of Rs. 10,000/-. After concluding the evidence, Ld. Local Commissioner filed its final report.
Summary of evidences
11. Plaintiff examined PW-1 Sh. Bipin Kumar Gupta, plaintiff and defendant examined DW-1 Sh. Vikram Singh, AR of the defendant company.
CS DJ 93/21 Dt. 16.05.2024 pg. 5 of 32 Bipin Kumar Gupta Vs. Roots Cooling System Pvt. Ltd
12. PW-1 Sh. Bipin Kumar Gupta, plaintiff tendered his affidavit of evidence as Ex.PW1/A and in cross-examination stated that it is correct in the letter dated 06.04.2019 (Ex.PW1/4) and letter dated 15.04.2019 (Ex.PW1/5) no amount due and payable has been mentioned towards plaintiff. He stated that it is correct that they have not filed any affidavit of accountant who used to operate email ID. He stated that he had not written any letter or email after receiving the amounts, however Vol. that he personally visited the defendant company and asked for the said amount. He stated that it is a matter of record that invoice bearing no. 152 dated 02.08.2018 not found mention in ledger (Ex.PW1/6). He also stated that it is correct that he has not filed any ledger on record to show the balance outstanding as on 01.04.2016 was of Rs. 1,47,97,457.60/-. He stated that he cannot explain why the debit balance mentioned in ledger (Ex.PW1/6) on 13.03.2019. He stated that it is a matter of record that he has not filed any correspondence letter or email after 25.11.2019 i.e. the date as per the ledger when the last payment was received.
13. During cross-examination, the witness also confronted with the ledger from 01.04.2018 to 31.03.2023 filed alongwith replication (Ex.PW1/D1) and asked the question that they have received a sum of Rs. 10 lakhs from defendants on 05.06.2018 by bank transfer but that entry is missing in Ex.PW1/6, however, the witness replied that he has no knowledge about the accounts. Ex.PW1/D1 also mentioned that on 06.07.2018 sales to a tune of Rs. 7,06,575/- were made through invoice no. 119 but it was not found mention in Ex.PW1/6, the witness replied that he has no knowledge about the accounts. In this manner, this witness was asked that on 26.07.2018, plaintiff received a sum of Rs. 2,50,000/- from CS DJ 93/21 Dt. 16.05.2024 pg. 6 of 32 Bipin Kumar Gupta Vs. Roots Cooling System Pvt. Ltd the defendants but the said entry is missing and on 02.08.2018 sales to a tune of Rs. 4,08,469/- were made but the said entry is missing as well as on 01.09.2018, plaintiff received a sum of Rs. 5,00,000/- but the said entry is also missing from Ex.PW1/6, however the witness stated that he has no knowledge about the same. He was confronted stated the said discrepancies in two ledgers i.e. Ex.PW1/6 and Ex.PW1/D1, however he stated that it is incorrect. He stated that he has not filed voucher no. 60 dated 04.06.2018. He stated that it is correct that Mark A does not bear the receiving stamp of the defendant company. He also stated that it is correct that Mark A and Ex.PW1/7 mentioned the jurisdiction to adjudicate the disputes shall lie with the courts at Faridabad. He stated that he do not know why Mark A does not bear stamp/receiving of the defendant company. He stated that he cannot read the documents Mark A and Ex.PW1/8 to show that jurisdiction lies within the court of Faridabad. He stated that he cannot tell who collected the delivered products as mentioned in Ex.PW1/8, however representatives of the defendants' came to my office at Ghaziabad to collect the products. He stated that he did not prepare Ex.PW1/7, Mark A as accountant prepared the said documents. He does not know the name of the accountant. He stated that it is correct that Ex.PW1/9 i.e. invoice no. 74 dated 02.06.2018 was not filed alongwith the plaint. He stated that he cannot read whether the Ex.PW1/9 shows the disputes shall lie with the courts at Ghaziabad. He denied suggestion that Ex.PW1/10 is a manufactured document, however stated that he cannot read the document, therefore, cannot tell whether the dispute shall lie with the Court Ghaziabad. He stated that it is correct that Ex.PW1/10 is a photocopy, however it does not bear signature of any employee and the stamp of CS DJ 93/21 Dt. 16.05.2024 pg. 7 of 32 Bipin Kumar Gupta Vs. Roots Cooling System Pvt. Ltd defendant is also photocopy. He stated that he did not know who collected the material at office, Ghaziabad. The same is the answer on Ex.PW1/11 and Mark B. He stated that Ex.PW1/12 is not the invoice no. 99 and the said document is the GR. Truck owner prepared the GR and there is no stamp of the defendant company. As per the Ld. LC observation, Ex.PW1/12 is GR receipt and Mark C is invoice no. 99 dated 07.07.2018. He stated that it is correct that the Mark D, E and F I.e invoice no. 111, 120 and 131 do not bear the stamp of the defendant company. He could not state, how the goods were supplied as mentioned in these invoices. He also stated that Ex.PW1/13 and Ex. PW1/14 were not filed with the plaint. He stated that the printout of the ledger were taken by the accountant from the computer but he do not know the name of the accountant.
14. He denied suggestion that after receipt of Rs. 53 Lakhs on 25.11.2019 no amount was due. He also stated that it is correct that no legal notice was sent demanding money from the defendant. He also stated that it is correct that he had not placed any record between him and defendant post May 2019. He also denied suggestion that invoices no. 152, 61, 74, 75, 97, 111, 120 and 131 were never handed over to the defendant. He also denied that Delhi Court has no jurisdiction and as per invoices only Ghaziabad and Faridabad have exclusive jurisdiction.
15. DW-1 Sh. Vikram Singh, tendered his affidavit of evidence and in cross-examination stated that the registered office of the defendant company is in Delhi. He stated that defendant company paid the GST amount on the purchase of goods as per vendor amount. He stated that they made payment on adhoc basis not on invoices wise and also maintaining account of the plaintiff, however not filed any account details before this CS DJ 93/21 Dt. 16.05.2024 pg. 8 of 32 Bipin Kumar Gupta Vs. Roots Cooling System Pvt. Ltd court. He denied suggestion that they were not maintaining account, and on asking of the counsel for the plaintiff brought the ledger Ex.DW1/P1 alongwith certificate under section 65B of Indian Evidence Act. He further stated that no other transaction happened during the period 01.04.2016 to 31.03.2020 apart from transactions mentioned in the ledger. He denied suggestion that they have not mentioned several transactions in the said ledger. He denied suggestion that the ledger Ex.DW1/P1 is afterthought. He also stated that he did not mention the invoice number in the ledger but invoice number mentioned in the entry narration. He stated that by perusing the ledger Ex.DW1/P1, he cannot state that the invoice number against which the entries have been made. He has not filed the entries narration as do not feel it required but he can file. The voucher numbers are the internal matter. He also stated that they are also claiming GST benefit but not filed the same. During cross-examination, this witness also brought copy of balance sheet of the year 2016-17 and 2017-18 and also the entries in narration for the period April 2016 to March 2020.
16. He stated that he do not remember how much amount was payable to th plaintiff firm on 31.03.2017, 31.03.2018 and 31.03.2019. He stated that Anup Saxena is the managing director of the company. This witness was confronted with Ex.PW1/5 and Ex.PW1/4, however could not state anything about these exhibits. He stated that the last amount was paid by the defendant company in the year 2019. He denied suggestion that he has not brought complete auditors report and list of creditors and debtors. He further denied suggestion that he has not brought complete GST return copy and brought the self typed copy. He denied suggestion also that despite sending email dated 06.04.2019 and 15.04.2019 defendant CS DJ 93/21 Dt. 16.05.2024 pg. 9 of 32 Bipin Kumar Gupta Vs. Roots Cooling System Pvt. Ltd company did not make the payment.
Material exhibits
17. Ex.PW1/A is the affidavit of evidence of PW-1 Sh. Bipin Kumar Gupta, Proprietor of the plaintiff firm, Ex.PW1/1 and Ex.PW1/2 are registreation cerificate under GST and the register certificate under Haryana VAT Act of plaintiff Ex.PW1/3 is the Master data of the defendant no. 1, Ex.PW1/4 & Ex.PW1/5 is the letter dated 06.04.2019 and 15.04.2019, Ex.PW1/6 is the ledger account of the plaintiff, Ex.PW1/7 to Ex.PW1/17 are the invoice nos. 152, 61, 74, 75, 97, 99, 102, 106, 111, 120,
131.
18. Ex.PW1/D1 is the ledger from 01.04.2018 to 31.03.2023 filed by the plaintiff alongwith replication, Mark A is the invoice no. 152 of Rs. 4,08,469/-, Mark B is invoice no. 97 dated 04.07.2018, Mark C is invoice no. 99 dated 07.07.2018, Mark D is invoice no. 111 dated 14.07.2018, Mark E is invoice no.120 dated 01.08.2018, Mark F is the invoice no. 131 dated 16.08.2018 (in cross-examination).
19. Ex.DW1/A is the affidavit of evidence of the defendant. Ex.DW1/1 is the board resolution.
20. Ex.DW1/P1 is the ledger for the financial year 2016 to March 2020 maintained by the defendant company, Ex.DW1/P2 is the certificate under section 65 B of Evidence Act regarding the ledger account for the period 01.04.2008 to 31.03.2020 (it appears that this date of 01.04.2008 is inadvertently mentioned), Mark D1 is the copy of balance sheet for the year 2016-17 and 2017-18, Mark D2 is the copy of GST document for the period June 2018 upto August 2018, Mark D3 is the entry narration from CS DJ 93/21 Dt. 16.05.2024 pg. 10 of 32 Bipin Kumar Gupta Vs. Roots Cooling System Pvt. Ltd April 2016 to March 2020, Ex.DW1/P3 is the certificate U/s 65 B Evindence Act.
Submissions of the counsels
21. Ld. counsel for the plaintiff submitted that the plaintiff supplied the material, however the material supplied through invoice no. 61, 74, 75, 97, 99, 102, 106, 111, 120, 131 and 152 remained unpaid and only part payment of the invoice no. 152 was made, and as per ledger account Rs. 46,46,746/- was due and payable. The plaintiff supplied the materials from two units i.e. Ghaziabad and Faridabad and maintaining the ledger of two units pertaining to material supplied to defendant and claimed consolidated amount. The invoice no. 152 and 79 were issued by the Faridabad unit. The invoices issued from Ghaziabad unit and the invoice no. 152 was issued by the Faridabad unit are not mentioned in plaint but available on record. The plaintiff filed all the invoices alongwith the consolidated ledger showing the details of 11 invoice numbers with replication. The plaintiff also filed the original invoices bearing original signature and stamp confirming the receipt of material. DW-1 stated that these invoices are manufactured, however in cross-examination stated and submitted this statement of account maintained by the defendant wherein a column of narration was referred and those bills numbers were mentioned and showing that the material received against the invoices as claimed by the plaintiff. The defendant neither filed complete audited balance sheet and complete GST Return documents which were in his possession, therefore, adverse inference to be drawn. The defendant company wrote two emails dated 06.04.2019 and 15.04.2019 in which admitted that their major funds are blocked thus clear acknowledgment of debt. Ld. Counsel submitted that CS DJ 93/21 Dt. 16.05.2024 pg. 11 of 32 Bipin Kumar Gupta Vs. Roots Cooling System Pvt. Ltd defendant's registered office in Delhi, therefore the suit could be filed within the jurisdiction where the defendant was receiving the material or having its registered office. Ld. Counsel submitted that there is no agreement between the parties for exclusive jurisdiction. The mentioning of the jurisdictional place in the invoices are merely on the basis of the fact that the material was supplied from Ghaziabad and Faridabad. There is no ad-idem between the parties for agreeing for exclusive jurisdiction. Even otherwise, the suit is filed at the most convenient place for the defendant which is the territorial jurisdiction of this court. (Relied upon 'Sanmarg Infratech Pvt. Vs. Lafarge Aggregates & Concrete India Pvt. Ltd, CRP No. 145 of 2015, dt. 05.10.2015', 'M/s Harit Polytech Pvt. Ltd. Vs. M/s Colt Cables Pvt. Ltd, FAO No. 48/2016, dt. 22.09.2016' and 'M/s Auto Movers Vs. Luminous Power Technologies Pvt. Ltd, CM(M) No. 604/2020, dt. 16.09.2021'). Ld. Counsel submitted that plaintiff able to prove its case and entitled for relief claimed.
22. Ld. counsel for the defendant submitted that the invoices filed were never received by the defendant or nor bears the receiving of the defendant company or its authorized representative. As per the case of the plaintiff, last payment was made on 25.11.2019 and subsequently no money has been paid. Even after receiving the payments, the plaintiff never raised any objection on payments or invoices. Ld. Counsel submitted that as per the ledger of the plaintiff, it appears that plaintiff has supplied vide 11 alleged invoices goods valuing Rs. 50 Lakhs, however, filed 8 invoices of Rs. 42,68,000/- and there is no averments why the remaining invoices have not been filed. The invoice bearing no. 152 an 79 dated 02.08.2018 and 04.06.2018 respectively for a total sum of more than Rs. 50 Lakhs do not CS DJ 93/21 Dt. 16.05.2024 pg. 12 of 32 Bipin Kumar Gupta Vs. Roots Cooling System Pvt. Ltd even find mentioned the ledger. The defendant denied all the documents in the affidavit of admission/denial of documents The plaintiff alongwith replication filed the ledger account for the period 01.04.2018 to 31.03.2023 (Ex.PW1/D1) and the alleged 11 invoices without seeking leave of this court, however, all the eight invoices filed alongwitih the plaint do not find any acknowledgment but the 11 invoices filed by the plaintiff alongwith the replication including four additional invoices bears the signs and stamp of the defendant company besides this there were discrepancies in the ledger filed by the plaintiff at the time of filing of the plaint (Ex.PW 1/6) and at the time of filing of replication (Ex.PW1/D1). Ld. Counsel submitted that PW-1 in cross-examination stated that in letter dated 06.08.2019 and 15.08.2019, due and payable amount has not been mentioned. After receiving Rs. 53 lakh, the plaintiff did not write any letter or email to the defendant asking to the remaining amount, even no legal notice was sent. The invoice no. 152 dated 02.08.2018 do not find mention in ledger (Ex.PW1/6). He stated that the products pertaining to invoice no. 152 supplied from the Ghaziabad. The invoice no. 61 dated 06.06.2018 (Ex. PW1/8) do not bear the receiving stamp of the defendant company. The invoice no. 75 dated 13.06.2018 (Ex.PW1/10) is the photocopy and the stamp of defendant company is not on original invoice. Regarding invoice no. 75, the representative of the defendant collected the material from his office at Ghaziabad. Ld. Counsel also submitted that PW-1 in cross- examination stated that invoice no. 97 (Mark B) do not bear the receiving of the defendant company and the representative of the defendant came to his office to collect the product. PW-1 stated that Ex.PW-1/12 is not invoice no. 99 (Mark C) but GR and GR also do not bear the stamp of the CS DJ 93/21 Dt. 16.05.2024 pg. 13 of 32 Bipin Kumar Gupta Vs. Roots Cooling System Pvt. Ltd defendant. The invoice no. 111, 120 and 131 (Mark D, E and F) do not bear the stamp of the defendant company. The invoices Ex.PW1/7 to Ex.PW1/17 are prepared by the accountant but PW-1 stated that he do not remember the name of the accountant.
23. DW-1 stated that manufacturing unit of the defendant company is in NOIDA and the registered office of the defendant company is in New Delhi which is residential address of the defendant company. Ld. Counsel submitted that DW-1 exhibited the ledger of the financial year 2016 to March 2020 (Ex.DW1/P1) showing the balance of Rs. 832.60 and the said ledger remained unrebutted. The narration entried were later on Mark D3 and also stated that no other transactions took place during the period 01.04.2016 to 31.03.2020 apart from the transaction mentioned in the ledger. Ld. Counsel submitted that the platiniff's head office at Gurgram and branch office at Faridabad and all the transactions took place either at Faridabad or Ghaziabad and no transaction occurred withing the jurisdiction of this court. Ld. Counsel submitted that the defendant registered office would not confer jurisdiction if have subordinate office at some other place. (relied upon 'Ultra Home Construction Pvt. Ltd Vs. Purushottam Kumar chaubey, 2016 SCC OnLine Del 376', 'Patel Roadways Ltd. Vs. Prasad Trading Co., (1991) 4 SCC 270 and 'Piccadily Agro industries Ltd. Vs. Ashok Narwal, 2016 SCC OnLine Del 1542'. The plaintiff even not alleged that part cause of action arose in Delhi. Furthermore, invoices stated that all the disputes are subject to Faridabad/Ghaziabad jurisdiction only. Therefore, this court has no jurisdiction, only the court at Faridabad and Ghaziabad have the jurisdiction (relied upon 'Swastic Gases Private Limited Vs. Indian Oil CS DJ 93/21 Dt. 16.05.2024 pg. 14 of 32 Bipin Kumar Gupta Vs. Roots Cooling System Pvt. Ltd Corporation Limited, (2013) 9 SCC 32'). Ld. Counsel submitted that as this court has no territorial jurisdiction therefore, this court also should refrain from other issues (relied upon 'Alphabetics (P) Ltd. Vs. Lohia Jute Press, 2003 SCC OnLine Del 728' and 'Masyc Projects (P) Ltd. Vs. Nilachal Iron & Power Ltd., 2019 SCC OnLine Del 11007').
24. Ld. counsel for the defendant submitted that the plaintiff is unable to prove letter dated 06.04.2019 (Ex.PW1/4) which is not a computer generated document but duly signed document in the form of letter but no original was produced, however in cross-examination stated to be scanned by the Cam scanner which is not stated in the plaint. The plaintiff received the said documents by couriers, therefore, the said document is not admissible and cannot be read. The entries reflected in the ledger filed with the plaint (Ex.PW1/6) and filed with the replication are different. In ledger (Ex.PW1/6), the plaintiff failed to mentioned the invoice no. 152 (Ex.PW1/7) and invoice no. 79 dated 02.08.2018 and 04.06.2018. On 13.03.2019, it is showing the debit balance of Rs. 1,80,982/-. The ledger filed alongwith the plaint (Ex.PW1/6) mentioned voucher no. 60 (on 04.06.2018 sales were made to the tune of Rs. 4,71,257/-). No ledger has been filed on record to show the balance outstanding as on 01.04.2016 was Rs. 1,47,97,457.60/-. Ld. Counsel submitted that even other wise, merely on the basis of staement of account no liability can be settled ( 'CBI Vs. VC Shukla & Ors., (1998) 3 SCC 410' and 'Chandrabhar Goswami and Ors. Vs. Guahati Bank Ltd., (1967) I SCR 898: AIR 1967 SC 1058'). Furthermore, plaintiff unable to prove the ledger. The plaintiff also not able to prove invoices (Ex.PW1/7 to Ex.PW1/17).
25. The defendant's ledger (Ex.DW1/P1) remained unrebutted. The CS DJ 93/21 Dt. 16.05.2024 pg. 15 of 32 Bipin Kumar Gupta Vs. Roots Cooling System Pvt. Ltd defendant never acknowledged the liability of Rs. 99,46,746.60/- and also not promised to pay the said amount by May 2019. The plaintiff unable to show how such amount was due after payment of Rs. 53,00,000/-. There is no correspondence, letter or email between the parties after 24.11.2019 when the last payment was received by the plaintiff. Ld. Counsel submitted that the plaintiff not able to prove the invoices and the delivery, therefore even the corroborative evidence of statement of account cannot be looked into ( relied upon 'Harish Manshukhani Vs. Ashok Jain, 2009 (109) DRJ 126 (DB) (SN)' ).
26. Ld. counsel for the defendant submitted that the the proof of pre- ponderence of probability is not met by the plaintiff in the present case. The plaintiff has to stand its own leg to prove the case, hence the present suit is liable to be dismissed. (relied upon 'Anand Swarup Data Vs. PNB, 1996 SCC OnLine P & H 655', 'P D Verma and Co. Vs. Laxmi Builders, 2014 SCC Online Del 2160' and 'M/s Gauhati Roller Flour Mills Vs. Smti. Premoda Medhi and Ors').
27. Both the parties also filed written submissions.
28. Arguments heard. Record perused.
29. My issues wise findings are as under :
(1) Whether the plaintiff is entitled to a decree of recovery of Rs. 46,46,746/ (Rupees Forty Six Lacs Forty Six Thousand Seven Hundred and Forty Six only)? OPP (2) Whether the plaintiff is entitled to interest, if yes, then at what rate?
(3) Whether the plaintiff is entitled to costs of the present suit? OPP
30. The case of the plaintiff is that the plaintiff is supplying the material CS DJ 93/21 Dt. 16.05.2024 pg. 16 of 32 Bipin Kumar Gupta Vs. Roots Cooling System Pvt. Ltd through various invoices to the defendant and they were having long business relations. The defendant was clearing the payments in parts and running account was maintained during the course of the business, and on March 2019, total balance sum of Rs. 99,46,746.60/- was to be paid. The defendant vide letter dated 06.04.2019 and 15.04.2019 though not acknowledged the specific liabilities, however stated that their funds were blocked and were clear the liabilities from April till May 2019. Pursuant to which, the defendant made payment of Rs. 53 Lakhs in parts from 06.05.2019 till 25.11.2019 and remaining balance on 25.11.2019 was Rs. 46,46,746/-.
31. The case of the plaintiff that this remaining payment is towards part payment of invoices no. 152 and the payment of the invoices no. 61, 74, 75, 97, 99, 102, 106, 111, 120 and 131. The plaintiff alongwith the plaint filed the carbon copies of these invoices, however these invoices do not bear any acknowledgment of receiving, in cross-examination, the PW-1 was confronted with some of these invoices which are Mark A to Mark F. It is pertinent to notice that the plaintiff alongwith the replication filed duly acknowledged copies of the text invoices nos. 74, 75, 97, 102, 106, 111, 120, 131 and 152 as well as consolidated accounts statement which are exhibited as Ex.PW1/7, Ex.PW1/9 to Ex.PW1/17 and Ex.PW1/D1. The invoice no. 61 which is only carbon copy is exhibited as Ex.PW1/8, there is no stamp of acknowledgment on Ex.PW1/8.
32. The application for the plaintiff to take the acknowledged copy on record subsequently filed alongwith the replication was allowed by this court and the said order on challenge has been dismissed by the Hon'ble High Court of Delhi. Therefore, the submissions of the Ld. Counsel for the CS DJ 93/21 Dt. 16.05.2024 pg. 17 of 32 Bipin Kumar Gupta Vs. Roots Cooling System Pvt. Ltd defendant that the Ex.PW1/7 to Ex.PW1/17 cannot be read in evidence is devoid of merit and these invoices would be read in evidence. Even otherwise, the only difference between the invoices filed alongwith the replication and the one filed alongwith the plaint is that the invoices filed alongwith the plaint do not bear the acknowledgment of receiving, otherwise there is no difference of any calculation. The invoices are the tax invoices in which CGST and SGST has already been paid, therefore the invoices as exhibited appears credible and to be read in evidence.
33. It has come in evidence that the plaintiff supplied the material both from his place of business at Faridabad and Ghaziabad. The plaintiff filed the account statement (Ex.PW1/6) showing the liability and the various payments made by the defendant to the plaintiff. There is no discrepancy pointed out during the cross-examination regarding entries of the payment in Ex.PW1/6, however the plaintiff also filed a consolidated ledger statement Ex.PW1/D1 which also shows the balance liability on 25.11.2019 as Rs. 46,46,746.60/- in which there are entries of various payments. PW-1 in cross-examination stated that these were prepared by the accountant, however not able to tell the name of the said accountant. However, there is nothing in cross-examination that the plaintiff has not accommodated any payment which are made by the defendant for the transactions in between them. The two ledger accounts maintained for different factories is not in any manner prejudicial to the case of the defendant if the defendant not able to show that some of the payment made by him are not reflected in the accounts statements.
34. At this stage, it is pertinent to consider the defense of the defendant. DW-1 in his affidavit of evidence (Ex.DW1/A) stated that the plaintiff CS DJ 93/21 Dt. 16.05.2024 pg. 18 of 32 Bipin Kumar Gupta Vs. Roots Cooling System Pvt. Ltd initially filed eight invoices for a sum of Rs. 42,68,372/-, however later on filed the invoices with replication after going through the objections of the defendant. The invoices bearing nos. 152, 61, 74, 75, 97, 111, 120, 131 were never handed over the defendant. The defendant also disputed the dispatch receipt and also stated that the invoices bearing no. 152 dated 02.08.2018 and 79 dated 04.06.2018 were not found mentioned in the ledger. The plaintiff also pointed out the difference in entries in ledger account Ex.PW1/D1 and Ex.PW1/6.
35. At this stage, it is also pertinent to look at the ledger account entries (Ex.PW1/D1) filed by the defendant during cross-examination of DW-1 from 01.04.2016 to 31.03.2017 and thereafter from 01.04.2018 to 31.03.2019. This ledger entry is regarding the material supplied by the plaintiff to the defendant. This ledger entries do not show any invoice number, however only the voucher number. The defendant alongwith the written statement did not file any document to show the transactions, however in the cross-examination brought this ledger account (Ex.DW1/P1). This ledger account do not mention any invoice number, however showing the internal voucher number. The amount and date against the internal voucher number matched with the invoices numbers and the date of the invoices. The said matching is clear from the table below.
Date Voucher Type Internal Amount of Invoice No. as Marked as
Voucher Invoice/Credit per Plaintiff exhibit
Number document
06.06.2018 Purchase APG-215 2,80,929/- 61 PW-1/8
12.06.2018 Purchase APG-217 5,39,444/- 74 PW-1/9
13.06.2018 Purchase APG-218 1,50,402/- 75 PW-1/10
CS DJ 93/21 Dt. 16.05.2024 pg. 19 of 32
Bipin Kumar Gupta Vs. Roots Cooling System Pvt. Ltd
04.07.2018 Purchase APG-339 5,41,991/- 97 PW-1/11
07.07.2018 Purchase APG-338 5,94,929/- 99 PW-1/12
11.07.2018 Purchase APG-321 7,10,520/- 102 PW-1/13
17.07.2018 Purchase APG-341 3,79,911/- 106 PW-1/14
24.07.2018 Purchase APG-340 2,58,555/- 111 PW-1/15
01.08.2018 Purchase APG-496 4,18,742/- 120 PW-1/16
16.08.2018 Purchase APG-457 6,48,820/- 131 PW-1/17
02.08.2018 Purchase from APG-495 4,08,469/- 152 PW-1/7
Faridabad
Unit
36. The entire case of the plaintiff is that the payment due is on account of the invoices Ex.PW1/7 to Ex.PW1/17, however the defendant categorically denied to receive those invoices but this stand of the defendant is falsified by their own ledger statement (Ex.DW1/P1). Therefore, despite discrepancies in testimony of PW-1 regarding the preparation of ledger accounts or other documents for the supply of the material, the plaintiff able to prove that the plaintiff supplied the material through invoices Ex.PW1/7 to Ex.PW1/17.
37. It can be safely inferred that the defendant has mischievously not mentioned any invoice number in his ledger account statement to avoid the admission of receiving of materials. In cross-examination DW-1 categorically stated that the payment were made on adhoc basis not invoice wise. They are also maintaining the account of the plaintiff, however not filed the said account alongwith the written statement but brought only during cross-examination. This witness in cross-examination stated that the voucher number is their entries, and the invoice number bears the number of bill raised by the seller and they do not mention the invoice number in the entry narration of the ledger and he cannot tell the invoice number from CS DJ 93/21 Dt. 16.05.2024 pg. 20 of 32 Bipin Kumar Gupta Vs. Roots Cooling System Pvt. Ltd the ledger statement. He also stated that they have filed the GST Returns and claiming the GST benefits as per GST Portal, however not filed the same and brought on the subsequent day the GST document (Mark D2), however it was a typed copy of the defendant and also brought the entry narration (Mark D3) which also do not bear the invoices number. The defendant thereby found to be concealing the invoices involved in the present case.
38. It is reiterated that the case of the plaintiff is on the basis of invoices Ex.PW1/7 to Ex.PW1/17 which defendant specifically denied to have received, however the exact date and exact amount of the said invoices are reflected in the ledger statement (Ex.DW1/P1). Therefore, merely on some discrepancies in explaining the supply of material and the documents produced by the plaintiff, the case of the plaintiff cannot be doubted. The case of the plaintiff that he is entitled to receive the payments through the invoices to the tune of Rs. 46,46, 746/- stands proved credibly.
39. Plaintiff able to show that the part amount of invoice no. 152 has been adjusted is duly shown in the ledger statement. The plaintiff also relying over Ex.PW1/4 and Ex.PW1/5, the letter of acknowledgment dated 06.04.2019 (Ex.PW1/4) and dated 15.04.2019 (Ex.PW1/5) however after these letters payment of Rs. 53 Lakhs was made by the defendant. These letters do not show any admission of total liability, therefore cannot be considered as an admission of the present liability by the defendant.
40. The ledger Ex.DW1/P1 exhibited by the DW-1 in cross-examination shows that defendant had made payment of the invoices nos. 61, 74, 75, 97, 99, 102, 106, 111, 120, 131 and 152 through internal voucher numbers i.e. APG-215, APG-217, APG-218, APG-339, APG-338, APG-321, APG-
CS DJ 93/21 Dt. 16.05.2024 pg. 21 of 32 Bipin Kumar Gupta Vs. Roots Cooling System Pvt. Ltd 341, APG-340, APG-496, APG-457 and APG-495, however, the defendant specifically denying of receiving the material through these invoices numbers, therefore, this itself created doubt on the account/ledger statement (Ex.DW1/P1) filed by the defendant. This account/ledger statement suggests that the entire payment has been made, however the statement of account relied by the plaintiff Ex. PW1/6 and Ex.PW1/D1 together clearly shows the total liability towards these invoices. The invoice number 152 is not shown in Ex.PW1/6 because that entry was of Ghaziabad, however in Ex. PW1/6 the balance amount of Rs. 1,80,982/- of invoice number 152 was clearly shown. The accounts Ex.PW1/6 and Ex.PW1/D1 (consolidated account of both Ghaziabad and Faridabad) are not contradictory and do not in any manner neglected the amounts paid by the defendant. The defendant could not point out of any amount which was paid by the defendant were not adjusted. The case of the defendant is that no payment is due, however as discussed the defendant despite receiving the invoices in question for which the payments are due have denied the receiving of the same but the invoices entries found in that account which corroborated the case of the plaintiff for the payment due on the basis of the invoices, and also falsified the accounts statement of the defendant showing 'no liability'. The plaintiff able to prove the liability towards defendant as shown in the table below :
Date Invoice Name of the Invoice Payment Balance Marked as Number Unit Number Received exhibit 02.08.2016 152 Faridabad 4,08,469/- 2,27,487/- 1,80,982/- PW-1/7 06.06.2018 61 Ghaziabad 2,80,929/- 58,478.40/- 2,22,450,60/- PW-1/8 12.06.2018 74 Ghaziabad 5,39,444/- 0 5,39,444/- PW-1/9 13.06.2018 75 Ghaziabad 1,50,402/- 0 1,50,402/- PW-1/10 04.07.2018 97 Ghaziabad 5,94,929/- 0 5,94,929/- PW-1/11 07.07.2018 99 Ghaziabad 7,10,520/- 0 7,10,520/- PW-1/12 CS DJ 93/21 Dt. 16.05.2024 pg. 22 of 32 Bipin Kumar Gupta Vs. Roots Cooling System Pvt. Ltd 11.07.2018 102 Ghaziabad 3,79,911/- 0 3,79,911/- PW-1/13 17.07.2018 106 Ghaziabad 2,58,555/- 0 2,58,555/- PW-1/14 24.07.2018 111 Ghaziabad 4,18,742/- 0 4,18,742/- PW-1/15 01.08.2018 120 Ghaziabad 6,48,820/- 0 6,48,820/- PW-1/16 16.08.2018 131 Ghaziabad 6,48,820/- 0 6,48,820/- PW-1/17 TOTAL 46,46,746/-
41. The plaintiff able to prove the liability of Rs. 46,46,746/- towards the defendant, however requesting interest @ 24% per annum which appears to be excessive in present facts and circumstances, interest @ 9 % per annum from the date of filing of the suit till the realization of the amount is reasonable in present facts and circumstances. Plaintiff is also entitled for the costs of the proceedings. Merely, the fact that plaintiff did not send any communication of demand after receiving Rs. 53 Lakhs on 25.11.2019 till the filing of the suit, do not affect the credibility of plaintiff's case in present facts and circumstances. Accordingly, the issue nos. 1 to 3 are decided in favour of the plaintiff and against the defendant.
Issue no. 4 and 5 (4) Whether the suit of the plaintiff is not maintainable? OPD (5) Whether the plaint is entitled to be returned under order VII rule 10 CPC as the court has no jurisdiction to try and entertain the present suit? OPD
42. Ld. counsel for the defendant submitted that the plaintiff has head office in Gurgaon, Haryana and Branch office in Faridabad, Haryana. Further, the defendant is manufacturing unit at NOIDA and the defendant's representatives used to collect the products and materials from the plaintiff at Ghaziabad and all the transactions took place at either Ghaziabad, CS DJ 93/21 Dt. 16.05.2024 pg. 23 of 32 Bipin Kumar Gupta Vs. Roots Cooling System Pvt. Ltd Faridabad or NOIDA and no cause of action arose in Delhi. Ld. Counsel submitted that merely on the basis of the fact that the registered office of the defendant is in Delhi, the case cannot be filed in Delhi. Furthermore, Ld. Counsel also submitted that the invoices Ex.PW1/7 shows all the disputes are subject to Faridabad jurisdiction and invoices Ex.PW1/8 to Ex.PW1/17 show the jurisdiction of Ghaziabad. Therefore, only the courts at Ghaziabad and in Faridabad have the exclusive jurisdiction to entertain the present suit.
43. Admittedly, the materials were supplied from Ghaziabad and Faridabad and the plaintiff invoked the jurisdiction of this court on basis of registered office of the defendant which falls within the territorial jurisdiction of this court. Ld. Counsel for the defendant heavily relied upon the judgment of 'Patel Roadways Ltd' of the Apex Court, however Hon'ble High Court of Delhi in case title 'NV Distilleries Pvt. Ltd Vs. Frost Falcon Distilleries Ltd, CS (COMM) 1170/2018, Dt. 15.011.2018' have dealt the true import of 'Patel Roadways Ltd.' and some relevant paras of the said judgment reproduced as under :
"....12. The senior counsel for the applicant / defendant pegs his case on Patel Roadways Ltd. supra and argues that Supreme Court therein has on an interpretation of Section 20 of the CPC held that a corporation / company cannot be sued at the address of its registered office, if has a subordinate / branch office elsewhere and where the cause of action has also accrued. It is argued that the plaintiff in the plaint has admitted using the mark / label, of which infringement is claimed, in Haryana and to having its distillery at Ambala in Haryana. It is argued that the cause of action has accrued at Haryana and the defendant, owing to having distillery at Sonipat, Haryana has a subordinate office at Haryana and the suit could have been filed at Haryana only and not at Delhi where though registered office of defendant is but no cause of action has arisen.
13. It is deemed appropriate, at the cost of adding to the length of this judgment, to set out herein below Section 20 of the CPC (without illustrations) as under:-
CS DJ 93/21 Dt. 16.05.2024 pg. 24 of 32 Bipin Kumar Gupta Vs. Roots Cooling System Pvt. Ltd "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 work for gain, as aforesaid, acquiesce in such institution; or
(c) the cause of action, wholly or in part, arises.
Explanation - A corporation shall be deemed to carry on business at its sole or principal office in India or, in respect of any cause of action arising at any place where it has also a subordinate office, at such place."
(emphasis added) and the relevant paragraphs of Patel Roadways Ltd. supra as under:
"9. Clauses (a) and (b) of Section 20 inter alia refer to a court within the local limits of whose jurisdiction the defendant inter alia "carries on business". Clause (c) on the other hand refers to a court within the local limits of whose jurisdiction the cause of action wholly or in part arises. It has not been urged before us on behalf of the appellant that the cause of action wholly or in part arose in Bombay. Consequently clause (c) is not attracted to the facts of these cases. What has been urged with the aid of the Explanation to Section 20 of the Code is that since the appellant has its principal office in Bombay it shall be deemed to carry on business at Bombay and consequently the courts at Bombay will also have jurisdiction. On a plain reading of the Explanation to Section 20 of the Code we find an apparent fallacy in the aforesaid argument. The Explanation is in two parts, one before the word "or" occurring between the words "office in India" and the words "in respect of" and the other thereafter. The Explanation applies to a defendant which is a corporation which term, as seen above, would include even a company such as the appellant in the instant case. The first part of the Explanation applies only to such a corporation which has its sole or principal office at a particular place. In that event the courts within whose jurisdiction the sole or principal office of the defendant is situate will also have jurisdiction inasmuch as even if the defendant may not be actually carrying on business at that place, it will "be deemed to carry on business" at that place because of the fiction created by the Explanation. The latter part of the Explanation takes care of a case where the defendant does not have a sole office CS DJ 93/21 Dt. 16.05.2024 pg. 25 of 32 Bipin Kumar Gupta Vs. Roots Cooling System Pvt. Ltd but has a principal office at one place and has also a subordinate office at another place. The words "at such place" occurring at the end of the Explanation and the word "or" referred to above which is disjunctive clearly suggest that if the case falls within the latter part of the Explanation it is not the Court within whose jurisdiction the principal office of the defendant is situate but the court within whose jurisdiction it has a subordinate office which alone shall have jurisdiction "in respect of any cause of action arising at any place where it has also a subordinate office".
10. Here we may point out that the view which we take finds support from a circumstance which, in our opinion, is relevant. Section 20 of the Code before its amendment by the Code of Civil Procedure (Amendment) Act, 1976 had two Explanations being Explanations I and II. By the Amendment Act Explanation I was omitted and Explanation II was renumbered as the present Explanation. Explanation I so omitted read as hereunder:-
"Explanation I. - Where a person has a permanent dwelling at one place and also temporary residence at another place, he shall be deemed to reside at both places in respect of any cause of action arising at the place where he has such temporary residence."
11. This Explanation dealt with the case of place of residence of the defendant and provided with regard to a person having a permanent dwelling at one place and also temporary at another place that such person shall be deemed to reside at both places in respect of any cause of action arising at the place where he has such temporary residence. The language used in Explanation II on the other hand which is the present Explanation was entirely different. Had the intention been that if a corporation had its principal office at one place and a subordinate office at another place and the cause of action arose at the place where it had its subordinate office it shall be deemed to be carrying on business at both places the language used in Explanation II would have been identical to that of Explanation I which was dealing with a case of a person having a permanent dwelling at one place and also temporary residence at another place. The marked difference in the language of the two Explanations clearly supports the view which we have taken with regard to the interpretation of the present Explanation to Section 20 of the Code which was Explanation II earlier as indicated above.
12. We would also like to add that the interpretation sought to be placed by the appellant on the provision in question renders the explanation totally redundant. If the intention of the legislature was, as is said on their behalf, that a suit against a corporation could be instituted either at the place of its sole or principal office (whether or not the corporation carries on business at that place) or at any other place where the cause of action arises, the provisions of clauses (a), (b) and (c) together with the first .part of the explanation CS DJ 93/21 Dt. 16.05.2024 pg. 26 of 32 Bipin Kumar Gupta Vs. Roots Cooling System Pvt. Ltd would have completely achieved the purpose. Indeed the effect would have been wider. The suit could have been instituted at the place of the principal office because of the situation of such office (whether or not any actual business was carried on there). Alternatively, a suit could have been instituted at the place where the cause of action arose under clause (c) (irrespective of whether the corporation had a subordinate office in such place or not). This was, therefore, not the purpose of the explanation.
The explanation is really an explanation to clause (a). It is in the nature of a clarification on the scope of clause (a) viz. as to where the corporation can be said to carry on business. This, it is clarified, will be the place where the principal office is situated (whether or not any business actually is carried on there) or the place where a business is carried on giving rise to a cause of action (even though the principal office of the corporation is not located there) so long as there is a subordinate office of the corporation situated at such place. The linking together of the place where the cause of action arises with the place where a subordinate office is located clearly shows that the intention of the legislature was that, in the case of a corporation, for the purposes of clause (a), the location of the subordinate office, within the local limits of which a cause of action arises, is to be the relevant place for the filing of a suit and not the principal place of business. If the intention was that the location of the sole or principal office as well as the location of the subordinate office (within the limits of which a cause of action arises) are to be deemed to be places where the corporation is deemed to be carrying on business, the disjunctive "or" will not be there. Instead, the second part of the explanation would have read "and in respect of any cause of action arising at any place where it has a subordinate office, also at such place".
13. As far as we can see the interpretation which we have placed on this section does not create any practical or undue difficulties or disadvantage either to the plaintiff or a defendant corporation. It is true that, normally, under clauses (a) to (c), the plaintiff has a choice of forum and cannot be compelled to go to the place of residence or business of the corporation and can file a suit at a place where the cause of action arises. If a corporation desires to be protected from being dragged into litigation at some place merely because a cause of action arises there it can save itself from such a situation by an exclusion clause as has been done in the present case. The clear intendment of the Explanation, however, is that, where the corporation has a subordinate office in the place where the cause of action arises, it cannot be heard to say that it cannot be sued there because it does not carry on business at that place. It would be a great hardship if, in spite of the corporation having a subordinate office at the place where the cause of action arises (with CS DJ 93/21 Dt. 16.05.2024 pg. 27 of 32 Bipin Kumar Gupta Vs. Roots Cooling System Pvt. Ltd which in all probability the plaintiff has had dealings), such plaintiff is to be compelled to travel to the place where the corporation has its principal place. That place should be convenient to the plaintiff; and since the corporation has an office at such place, it will also be under no disadvantage. Thus the Explanation provides an alternative locus for the corporation's place of business, not an additional one.
14. There may be only one extraordinary situation in which this interpretation may cause an apparent anomaly. This is where the plaintiff has also his/its place of business at the same place as the corporation but the cause of action has arisen at some other place. The above interpretation would preclude him from filing a suit in that place of business common to both parties and compel him to go to a court having jurisdiction over the place where the cause of action has arisen. But this is not really a hardship because such plaintiff must have had some nexus or connection with the place since some part of the cause of action had arisen there; if he can have dealings with the corporation at such a place giving rise to the cause of action, there is no reason why he should find it disadvantageous or difficult to file a suit at such place. Equally, the corporation, having a subordinate office at the place, will suffer no disadvantage.
15. In this view of the matter since in the instant two cases clause (c) is not attracted to confer jurisdiction on courts at Bombay and the appellant has admittedly its subordinate offices at the respective places where the goods in these two cases were delivered to it for purpose of trans- port the courts at Bombay had no jurisdiction at all to entertain the suits filed by the respondents and the parties could not confer jurisdiction on the courts at Bombay by an agreement. Accordingly no exception can be taken to the findings in this behalf recorded by the trial court and the High Court in these two cases."
(emphasis added)
14. As would immediately become clear on a careful reading of the aforesaid, Supreme Court in Patel Roadways Ltd. supra though held the explanation to Section 20 of the CPC to be an explanation to Clause (a) thereof rather than to Clause (c) thereof but was concerned with only the alternative "carries on business", of the several alternatives in Clause (a). It was not the contention before the Supreme Court in Patel Roadways Ltd. supra that the place where the registered office of a corporation / company is situated is also the place where the corporation, if a defendant in the suit, "actually and voluntarily resides". Thus, no finding was returned in the said judgment on the said aspect. Supreme Court, in the context only of alternative "carries on business" in Clause (a) of Section 20 having held that by virtue of explanation, which also is only to, where a corporation shall be deemed CS DJ 93/21 Dt. 16.05.2024 pg. 28 of 32 Bipin Kumar Gupta Vs. Roots Cooling System Pvt. Ltd to carry on business, having held that where a defendant company / corporation has its principal office at one place and subordinate office at another place and cause of action arises at a place where the subordinate office is located, suit has to be filed only in the Court within whose jurisdiction the company / corporation has its subordinate office and not in Court within whose jurisdiction it has its principal office, cannot be held to have also held that notwithstanding the word "or" between the words "actually and voluntarily resides" or "carries on business" or "personally works for gain", the alternative of suing the corporation at the place where it actually and voluntarily resides is also not available. The judgment cannot be read as eclipsing the option given by the legislature to a plaintiff, under Section 20(a) of the Code, of suing at the place where the defendant, at the time of commencement of the suit, actually and voluntarily resides.
15. I have not come across any judgment holding that in case a defendant is a company or a corporation, only the option in Section 20(a) of the CPC, of "carries on business" is available and not the option of "actually and voluntarily resides". In Morgan Stanley Mutual Fund Vs. Kartick Das (1994) 4 SCC 225, it was held, as far as India is concerned, the residence of the company is where the registered office is located and normally cases should be filed only where the registered office of the company is situated. Again, in Dhodha House Vs. S.K. Maingi (2006) 9 SCC 41, it was reiterated that ordinarily the residence of the company would be where its registered office is. Once it is so, a company can always be sued under Section 20(a) of the CPC, in the Court within whose jurisdiction the registered office of the company is located. Not only as per the language of the explanation to Section 20 but even as per Patel Roadways Ltd., the explanation to Section 20 is attracted only to the alternative "carries on business" in Section 20(a) and not to the alternative "actually and voluntarily resides".
16. Mention in this regard may also be made of a dicta of the Division Bench of the High Court of Bombay in Pratap Singh Vs. The Bank of America 1976 SCC OnLine Bom 111, concluding on an interpretation of Clause 12 of the Letters Patent of that Court but at par with Section 20 of the CPC and also referring thereto, that the word 'defendant' in Section 20 must be given its proper meaning and would include within its compass both natural and artificial persons i.e. living beings as well as corporations and no distinction is made in law between corporations as are incorporated in India and corporations as are incorporated outside India. It was further held that under Section 20, a suit can be brought if the defendant, at the time of institution of the suit, „dwells‟ or 'carries on business' or 'personally works for gain' within the limits of the Court and that for consideration of jurisdiction under Section 20(a), the consideration whether the cause of action has accrued wholly or in part within or without the limits of said jurisdiction is wholly CS DJ 93/21 Dt. 16.05.2024 pg. 29 of 32 Bipin Kumar Gupta Vs. Roots Cooling System Pvt. Ltd irrelevant. Though Clause 12 of the Letters Patent uses the word 'dwells' instead of 'resides' but Mulla, in his treatise on the Code of Civil Procedure, 19 th Edition, has authored that there is no distinction between the word 'resides' as used in Sections 16,19 and 20 of the CPC and the word 'dwell' in Clause 12 of the Letters Patent and the cases decided on the latter word would be authorities on the consideration of the former. Mention, at this stage may be made of Union of India Vs. Sri Ladulal Jain AIR 1963 SC 1681 holding that the principle behind Section 20(a) and Section 20(b) of the CPC is that the suit be instituted at a place where the defendant be able to defend the suit without undue trouble. Applying the said principle also, I fail to see as to how the defendant herein is put to any trouble by being sued in the courts at Delhi within whose jurisdiction the registered office of the defendant is situated. Rather, Supreme Court in Morgan Stanley Mutual Fund supra held that where a corporation is sued with respect to urgent reliefs, as of restraining its public issue, not at the place of the registered office but at the place of its subordinate office, the Court should have regard to the time taken in the subordinate office receiving instructions from the registered office.
17. In this context, it may also be noticed that Patel Roadways Ltd. supra was concerned with challenge by Patel Roadways Ltd. to the jurisdiction of the Courts at Madras, where the subordinate office of the defendant Patel Roadways Ltd., wherein the goods were entrusted to Patel Roadways Ltd. for transportation to Delhi. Patel Roadways Ltd. contested jurisdiction of the Courts at Madras on the plea that as per the agreed terms and conditions of transportation, the exclusive jurisdiction was of the Courts at Bombay where the registered office of Patel Roadways Ltd. was situated. It was in this context held that since Patel Roadways Ltd. had a subordinate office at Madras, the plaintiff situated at Madras could not be compelled to travel to Bombay to sue Patel Roadways Ltd. and by consent jurisdiction could not be conferred on the Courts at Bombay which did not have jurisdiction. Patel Roadways Ltd. supra thus, was not a case where the defendant was sued in Court of the place where registered office of defendant was situated. Though in Piccadily Agro Industries Ltd. Vs. Ashok Narwal supra, the registered office of the defendant no.2, being the manufacturer of the impugned product (defendant no.1 was the agent), was at Delhi but it was not the contention that the defendants therein could be sued at Delhi owing to the defendant no.2, who was the main contesting defendant, actually and voluntarily residing at Delhi on account of having its registered office at Delhi and thus the question as has been adjudicated herein, did not come to be decided. Patel Roadways Ltd. supra was followed, holding that no part of the cause of action had accrued at Delhi. Same was the position in Piccadily Agro Industries Ltd. Vs. Ashok Jain supra.
CS DJ 93/21 Dt. 16.05.2024 pg. 30 of 32 Bipin Kumar Gupta Vs. Roots Cooling System Pvt. Ltd
18. It is a settled position in law that a judgment is not a precedent on what was not for adjudication therein, what was not discussed and debated. The Courts, in Patel Roadways Ltd., Piccadily Agro Industries Ltd. Vs. Ashok Narwal and Piccadily Agro Industries Ltd. Vs. Ashok Jain supra, having not considered the effect of a defendant company being sued in the Court within whose jurisdiction its registered office is situated, though also having a subordinate office at another place and where the cause of action had also accrued, the said judgments do not constitute precedent for the proposition that such a company cannot be sued at the place of its registered office under Section 20(a), owing to actually and voluntarily residing within the jurisdiction of that Court.
19. Mention in addition may also be made of my dicta in Millennium & Copthorne International Ltd. Vs. Aryans Plaza Services Pvt. Ltd. 2018 SCC OnLine Del 8260 against which no appeal is found to have been preferred, holding territorial jurisdiction under Section 19 of the CPC to be also available qua suits for infringement and / or passing off and for ancillary reliefs. The matter having been discussed in detail in the cited judgment, it is not deemed necessary to elaborate.
20. No merit is thus found in the application of the defendant for return / rejection of the plaint...".
44. The part of cause of action arose in terms of Section 20 of the CPC as the defendant's place of residence or work i.e. the registered office as well. It is also most convenient place for defendant to defend suit. Even otherwise, the plaintiff is also disputing the invoices in question. Furthermore, there is no consensus between the parties regarding the place of jurisdiction of court in case of dispute. The jurisdictional aspect mentioned in the invoices are in the routine manner and cannot be inferred to exclude the jurisdiction of the court where the registered office of the defendant is located which obviously is the most convenient place for the defendant in present facts and circumstances. Accordingly, this court has territorial jurisdiction to try the present suit. Hence, issue no. 4 and 5 are decided in favour of the plaintiff and against the defendant.
Relief CS DJ 93/21 Dt. 16.05.2024 pg. 31 of 32 Bipin Kumar Gupta Vs. Roots Cooling System Pvt. Ltd
45. In view of the above findings, the present suit for recovery is decreed in favour of the plaintiff and against the defendant for a sum of Rs. 46,46,746/- (Rupees Forty Six Lakh Forty Six Thousand Seven Hundred Forty Six Only) along with interest @ 9 % per annum from the date of filing of the suit till realization of the entire amount. Costs of the suit is also awarded in favour of the plaintiff.
46. Decree sheet be prepared accordingly. File be consigned to record room after due compliance.
Announced in the open court on 16th May 2024 (Ajay Kumar Jain) District Judge(Commercial Courts- 03), SE/Saket Courts/Delhi CS DJ 93/21 Dt. 16.05.2024 pg. 32 of 32 Bipin Kumar Gupta Vs. Roots Cooling System Pvt. Ltd