Delhi District Court
M/S Surender Kumar Jain Through Its Sole ... vs M/S Jay Colour Company Through Its ... on 4 August, 2025
IN THE COURT OF SH. ANIL KUMAR SISODIA:
DISTRICT JUDGE, COMMERCIAL-04: CENTRAL:
TIS HAZARI COURTS: DELHI.
CS (COMM) 714/2023
M/S SURENDER KUMAR JAIN
Through its sole proprietor
Shri Surender Kumar Jain
Regd. Office at:
Shop No. 2046, 1st Floor,
Katra Tobacco, Khari Baoli,
Delhi-110006 ............Plaintiff
Vs.
M/S JAY COLOUR COMPANY
Through its partner Shri Gaurav Bansal,
200/203, Gali Saras Wali,
Tilak Bazar, Delhi-110006
Principal Place of Business at:
283, Block C, ICF, Holambi Kalan,
Narela Phase-2, Delhi-110082 .............Defendant
Date of filing of the suit : 28.04.2023
Date of reserving judgment : 25.07.2025
Date of judgment : 04.08.2025
Judgment
1.This is a suit for recovery of Rs. 33,96,364/- (Rupees Thirty-Three Lakhs Ninety-Six Thousand Three Hundred Sixty-Four Only) along with pendente lite and future interest filed by plaintiff against defendant.
ANIL Digitally signed
by ANIL KUMAR
KUMAR SISODIA
Date: 2025.08.04
SISODIA 16:25:32 +0530
CC (COMM) 714/2023 M/s Surender Kumar Jain Vs M/s Jay Colour Company Page No. 1 of 21
2. Briefly stated, facts of the case are that the plaintiff is a proprietorship firm of Sh. Surender Kumar Jain and is engaged and deals in the business/trading of chemicals colours and dyes for the past several years. The defendant is a partnership firm. It is stated that defendant approached the plaintiff for supply of colours and dyes on the recommendation of one Sh. Kishan Chand Sharma and has been purchasing the same from the plaintiff for the last 2-3 years. It is further stated that the plaintiff has supplied defendant colours & dyes on the demand and requests of the defendant vide Tax invoice no. SK-384/20- 21 dated 17.12.2020 for Rs. 9,53,440/- and e-way bill no. 721163166027 dated 17.12.2020; SK-456/20-21 dated 27.01.2021 and e-way bill no. 751170784796 dated 27.01.2021 for Rs. 8,59,630/- and SK-488/20-21 dated 10.02.2021 & e-way bill no. 781173730766 dated 10.02.2021 worth Rs. 9,25,710/-. Thus, plaintiff supplied the total material/goods having worth Rs. 27,38,780/- upto 10.02.2021.
3. It is further stated that defendant assured the plaintiff that payment of the material/goods supplied to defendant would be made within 15 days from the delivery of the material/goods to defendant failing which defendant is liable to pay interest @ 12% per annum on the delayed payments as per the terms and conditions mentioned in the invoice/bill. However, defendant failed to adhere to the terms and conditions and failed to pay the due/outstanding amount of Rs. 27,38,780/ within 15 days from the delivery of the material/goods to the defendant. The plaintiff made several requests to the defendant to clear and pay the outstanding amount telephonically and physically to the defendant. Thereafter, plaintiff issued legal notice of demand dated 03.07.2022. Despite service of the legal notice of demand, defendants have failed to Digitally signed ANIL by ANIL KUMAR KUMAR SISODIA Date: 2025.08.04 SISODIA 16:25:50 +0530 CC (COMM) 714/2023 M/s Surender Kumar Jain Vs M/s Jay Colour Company Page No. 2 of 21 pay the outstanding amount of Rs. 27,38,780/- to plaintiff till date. It is stated that defendant is liable pay interest on the delayed payment @ 12% p.a. as per the terms and conditions mentioned in the Tax invoices. The total interest on the delayed payment of the aforesaid amount comes to Rs. 6,57,584/-. Thus, the defendant is liable to pay outstanding amount of Rs. 33,96,364/- (Rs. 27,38,780/- towards principal amount and Rs. 6,57,584/- towards interest) to the plaintiff. Finding no other alternative, plaintiffs have filed the present suit against the defendant.
4. The defendant was duly served with the summons of the suit. Defendant has contested the suit by filing the written statement raising preliminary objections that no amount is due and payable by the defendant. The present suit is filed with malafide intention by the plaintiff as though the invoice no. SK-384/20-21, SK-456/20-21 and SK- 488/20-21 were issued by the plaintiff in the name of the defendant but the defendant has not received any goods under the said invoices till date and the same fact has been communicated to the plaintiff verbally over the telephonic calls. The defendant on various occasions asked for delivery of the goods telephonically and visiting the plaintiff personally but the plaintiff did not pay any heed to the request of the defendant. It is stated that the present suit is bad for lack of material facts and particulars. The plaintiff has failed to substantiate how a sum of Rs. 33,96,364/- is allegedly due and payable. The plaintiff has not approached the court with clean hands and has suppressed the material facts from the court in order to take undue advantage on the defendant. The plaintiff's only motive is to harass and extort money from the defendant. Plaintiff has failed to substantiate that how the goods were delivered by it to the defendant. It is further stated that this court has territorial jurisdiction to try the present suit.
Digitally signed ANIL by ANIL KUMAR
SISODIA
KUMAR Date:
SISODIA 2025.08.04
16:26:02 +0530
CC (COMM) 714/2023 M/s Surender Kumar Jain Vs M/s Jay Colour Company Page No. 3 of 21 Defendant has raised preliminary submissions that against the invoices in question, the defendant has not received any goods till date. It is stated that the defendant made invoices bearing invoice no. SK- 384/20-21, SK-456/20-21 and SK-488/20-21 and as a regular business practice of the defendant, the defendant entered the said 3 invoices in his books of accounts. However, the goods in respect of the said invoices were not received by the defendant and the said fact was duly communicated to the plaintiff over telephonic conversation and the plaintiff assured that the goods would be delivered shortly. It is stated that defendant had not received any goods even till date against the aforesaid invoices. It is stated that plaintiff has tried to mislead and manipulate this court by preferring a meritless suit against the defendant.
On merits, the contents of the plaint have been admitted to the extent that defendant is a partnership firm and Sh. Gaurav Bsansal is one of the partner having GST no. 07AAEFJ9683JIZR and the principal place of business is at Holambi Kalan, Narela, Delhi. It is denied that the plaintiff has supplied the defendant colours and dyes on specific demand and requests of the defendant vide tax invoices in question. It is further denied that plaintiff has also issued e-way bill nos. 721163166027 dated 17.12.2020, 751170784796 dated 17.01.2021 and 781173730766 dated 10.02.2021 to the defendant for supply of goods on demand. The defendant denied that it is liable to pay interest for the delayed payment. The defendant also denied the territorial jurisdiction of this court and other contents of the plaint and a prayer has been made for dismissal of the suit.
5. Plaintiff has filed replication to the WS and has reiterated the contents of the plaint and has denied the contents contrary to it. It has been stated that defendant has filed copy of ledger account which shows ANIL Digitally signed by ANIL KUMAR KUMAR SISODIA Date: 2025.08.04 SISODIA 16:26:12 +0530 CC (COMM) 714/2023 M/s Surender Kumar Jain Vs M/s Jay Colour Company Page No. 4 of 21 the receipt of the three invoices bearing no. SK384/20-21, SK 456/20-21 and SK 488/20-21. It was stated that this court has territorial jurisdiction as the office of the defendant is situated at Tilak Bazar, Delhi-06 which comes within the territorial jurisdiction of this court.
6. On the basis of pleadings of the parties, following issues were framed on 18.01.2024: -
1. Whether the defendant has not received the goods against invoices no. SK-384/20-21, SK-456/20-21 and SK-488/20-21 and is not entitled to pay any amount to the plaintiff?(OPD)
2. Whether this court has no territorial jurisdiction to entertain and try the present suit?(OPD)
3. Whether the suit has not been signed, verified and filed? (OPD)
4. Whether the plaintiff is entitled for a decree of Rs.33,96,364/-
as prayed for? (OPP)
5. Whether the plaintiff is entitled for the interest on the aforesaid amount, if so, at what rate and for which period? (OPP)
6. Relief.
7. It has come to notice of this court that Issue no. 3 as stated herein above was not recorded completely and only incomplete issue was recorded due to inadvertence /oversight. Hence, the complete issue no. 3 shall be read as under:-
"3. Whether the suit has not been signed, verified and filed by duly authorized person? OPD."
8. In support of his case, plaintiff has examined three witnesses.
ANIL Digitally signed
by ANIL KUMAR
KUMAR SISODIA
Date: 2025.08.04
SISODIA 16:26:48 +0530
CC (COMM) 714/2023 M/s Surender Kumar Jain Vs M/s Jay Colour Company Page No. 5 of 21 Plaintiff has examined himself as PW-1 and has tendered his affidavit as Ex PW1/A and proved the following documents: -
Sr. Document Exhibit
No.
1. Tax Invoice No. SK-384/20-21 dated Ex. PW-
17.12.2020 1/1
2. Tax Invoice No. SK-456/20-21 dated Ex. PW-
27.01.2021 1/2
3. Tax Invoice No. SK-488/20-21 dated Ex. PW-
10.02.2021 1/3
4. E-way Bill No. 721163166027 dated Ex. PW-
17.12.2020 1/4
5. E-way Bill No. 751170784796 dated Ex. PW-
27.01.2021 1/5
6. E-way Bill No. 781173730766 dated Ex. PW-
10.02.2021 1/6
7. Copy of GST registration Ex. PW-
1/7
8. Copy of legal notice dated 03.07.2022 Ex. PW-
1/9
9. Postal receipts Ex. PW-
1/10 to
Ex. PW-
1/15
10. Nonstarter report dated 24.12.2022 Ex. PW-
1/16
11. Certificate u/s 65-B of Indian Evidence Ex. PW-
Act 1/17However, during examination in chief of PW-1, it was observed that no document was numbered as Ex. PW-1/8 in the affidavit of the plaintiff.
PW-1 was cross-examined by the defendant and in his cross- examination, he admitted that he is not manufacturer of the goods ANIL Digitally signed by ANIL KUMAR KUMAR SISODIA Date: 2025.08.04 SISODIA 16:26:59 +0530 CC (COMM) 714/2023 M/s Surender Kumar Jain Vs M/s Jay Colour Company Page No. 6 of 21 supplied to the defendant and he was purchasing the goods from M/s Sankalp Traders and Swastik Enterprises and was getting the goods delivered to his customers directly from the aforesaid traders. Sh. Gaurav Bansal himself used to telephonically confirm about the delivery of the goods and no written confirmation was given by any customers including the defendant. He also deposed that he used to check the goods as the premises of M/s Sankalp Traders and M/s Swastik Enterprises but there was no provision for checking the goods during transit. PW-1 deposed that he used to place the orders to Sankalp Traders and Swastik Enterprises on telephone and they used to issue bills in the name of his firm and he used to make online payment after receipt of payment from his customers. PW-1 also deposed that he did not make payment against invoices Ex. PW-1/1 to Ex. PW-1/3 to Sankalp Traders and Swastik Enterprises as he had not received the payment from the defendant. PW- 1 deposed that he was having invoices in his possession regarding purchase of goods mentioned in Ex. PW-1/1 to Ex. PW-1/3. He denied the suggestion that goods were not purchased by him from Sankalp Traders and Swastik Enterprises and the goods mentioned in invoices Ex. PW-1/1 to Ex. PW-1/3 were not delivered to the defendant. PW-1 deposed that there was no documentary evidence regarding the placing of the order and confirmation of delivery of the goods as the trading is done on telephone only.
9. Sh. Rajesh Kumar, PRI (P), Ashok Vihar Head Post Office, Delhi was examined as PW-2 who deposed that as per policy and guidelines of the Postal Department, the record is saved upto six months and thereafter, the record is weeded out as per policy of the Department. He proved the letter from the Sr. Superintendent of our Department dated 14.03.2024 Ex. PW-2/A (colly) (total 6 pages) along with copy of the ANIL Digitally signed by ANIL KUMAR KUMAR SISODIA Date: 2025.08.04 SISODIA 16:27:23 +0530 CC (COMM) 714/2023 M/s Surender Kumar Jain Vs M/s Jay Colour Company Page No. 7 of 21 transit register and rules pertaining to weeding out the record as per the policy.
In the cross-examination, PW-2 deposed that no record is maintained in respect of postal article after expiry of six months and the record of present case is weeded out.
10. Sh. Shahanwaz, Stenographer, Gr.-III, Department of Trade and Taxes, Vyapaar Bhawan, IP Estate was examined as PW-3 who has proved summoned record pertaining to the year 2019-20 i.e. Form GSTR-1 and Form GSTR-3B in respect of the plaintiff company (pages 1-84) as Ex.PW-3/1(colly). He also proved Form GSTR-1 for the year 2020-21 and Form GSTR-3B (pages 85- 156) as Ex.PW-3/2 (colly) and the certificate u/s 65B of Indian Evidence Act as Ex.PW-3/3.
In the cross-examination, PW-3 deposed that he was not aware if the GST number of plaintiff is active or not. He further deposed that the department is maintaining the reason as to why GST number is inactive and the same is reflective on the website of GST department. PW-3 was not aware whether the department is conducting any verification or not before closing GST account. He deposed that the department suspends GST accounts if it is found that bogus transactions have been made from that account just for earning the ITC. He was also not aware as to how bogus transactions are reversed by the department for the refund of the ITC.
Thereafter, PE was closed.
11. Defendant also examined three witnesses.
Sh. Inder Kumar Gupta was examined as DW-1 who has tendered his affidavit as Ex DW-1/A. In his cross-examination, he deposed that he was working with ANIL Digitally signed by ANIL KUMAR KUMAR SISODIA Date: 2025.08.04 SISODIA 16:27:36 +0530 CC (COMM) 714/2023 M/s Surender Kumar Jain Vs M/s Jay Colour Company Page No. 8 of 21 defendant company for last 15 to 16 years but he was not aware as to how many firms were being run by Sh. Kumar Gaurav Bansal. He deposed that he was working as a part time accountant in the defendant company and he was maintaining ledger account of its business with the plaintiff. He deposed that both purchase and payments mentioned in the ledger account of the defendant were maintained by him and he had mentioned the invoice number of the plaintiff through which defendant had purchased the goods from the plaintiff. The witness identified signature of Kumar Gaurav Bansal on authority letter dated 20.09.2023 Ex. DW-1/DX-1 and ledger account Ex. DW-1/DX-2. He further deposed that defendant company was filing income tax returns and GST returns. The audit reports of defendant company were prepared by Sh. Sandeep Bhatnagar, CA. He admitted that defendant company was operating from Tilak Bazar office at the relevant time and same address was mentioned in the ledger account which was maintained by him in the computer. He deposed that the entries in the ledger account was correct as per record and no raid was conducted by GST and CGST department till he was employed there. However, in the end he deposed that he was not aware about the contents of his affidavit.
12. Sh. Kumar Gaurav Bansal, partner of the defendant firm appeared in the witness box as DW-2 and tendered his affidavit as Ex. DW-2/A and proved the following documents:-
Sr. Document Exhibit
No.
1. Authorization letter dated 20.09.2023 Ex. DW-2/1
2. Ledger Account of plaintiff maintained by Ex. DW-2/2 defendant firm ANIL Digitally signed by ANIL KUMAR KUMAR SISODIA Date: 2025.08.04 SISODIA 16:28:41 +0530 CC (COMM) 714/2023 M/s Surender Kumar Jain Vs M/s Jay Colour Company Page No. 9 of 21
3. GST Form of defendant firm Ex. DW-2/3
4. Certificate u/s 65-B of Indian Evidence Act Ex. DW-2/4 In the cross examination, he deposed that he never met Surender Kumar Jain personally but had met him through the broker Kishan Chand Sharma. He admitted that he was doing business with the plaintiff firm since 2018-2019 and had filed GST returns for the year 2018-19 to 2022-23 and had also filed the income tax returns for the said periods. He admitted that his affidavit, statement of truth, certificate u/s 65-B, authority letter dated 20.09.2023 and ledger account mention the address of the firm as 200/203, Gali Saras Wali, Tilak Bazar, Delhi-110006. He admitted that he had made payment to the plaintiff after the invoices Ex. PW-1/1 to Ex. PW-1/4. He also deposed that he had not given any written notice to the plaintiff about non-receipt of goods against the aforesaid invoices but had made complaint to the broker. He also deposed that no raid was conducted by the GST department and notice was received by the defendant from the GST department. However, he could not produce the reply given to notice to GST department despite time being given and deposed that no reply had been given till date. He also deposed that the payments were made to the plaintiff from Punjab National Bank and Tamil Nadu Merchantile Bank, both situated at Fatehpuri, Chandni Chowk, Delhi.
13. Defendant examined Sh. Rahul Bansal as DW-3 who tendered his affidavit as Ex. DW-3/A. In his cross-examination, he deposed that he has not placed on record any appointment letter to show that he was working as Godown Incharge of defendant firm. He also admitted that he has not mentioned Digitally signed ANIL by ANIL KUMAR SISODIA KUMAR Date:
SISODIA 2025.08.04 16:28:57 +0530 CC (COMM) 714/2023 M/s Surender Kumar Jain Vs M/s Jay Colour Company Page No. 10 of 21 about his salary in his affidavit. He deposed that he had no knowledge about the register maintained at the godown and deposed that no register was maintained at the godown. He deposed that has not placed on record any documents showing the receipt of goods at the godown of the defendant. He denied the suggestion that he never worked as godown incharge of the defendant firm.
14. On 07.10.2024 DE was closed as no witness was present on behalf of the defendant. Thereafter, defendant filed an application u/O 18 Rule 17 CPC which was dismissed vide order dated 05.11.2024. Defendant challenged the order before the Hon'ble High Court vide CM (M) no. 4000/24 vide order dated 22.04.2025 Hon'ble High Court allowed the defendant to examine official from GST department.
15. Defendant examined DW-4 Deepak Mor, Inspector from GST department who brought the case file of VDR Colours and Chemical Pvt. Ltd which pertained to inquiry against Sh. Surender Kumar Jain and his three firms regarding receipt and issue of bogus invoices and for availing GST credit without any supply of goods and without any receipt of goods. He deposed that the inquiry was concluded on 01.02.2025 and certified copy of the final order in the inquiry was proved as Ex.DW-4/1. He also deposed that defendant had also been imposed penalty and demand of tax was raised for availing wrong ITC.
In the cross-examination, DW-4 deposed that the order Ex. DW- 4/1 had been passed based on complete inquiry and documents. He deposed that no notice was served on Surender Kumar Jain before conducting raid on him as there was no provision for the same. He deposed that summons were issued to defendant company only once and no raid was conducted on the defendant company and no record was Digitally signed ANIL by ANIL KUMAR KUMAR SISODIA Date: 2025.08.04 SISODIA 16:29:39 +0530 CC (COMM) 714/2023 M/s Surender Kumar Jain Vs M/s Jay Colour Company Page No. 11 of 21 seized by the GST official from the office of defendant company. He further deposed that no reply was given by the defendant company to the summons issued to it. He admitted that as per record, defendant company had claimed ITC from GST department in respect of three companies. He admitted that the period of filing appeal against the order Ex. DW-4/1 had not yet expired.
Thereafter, DE was closed.
16. I have heard Ld. Counsel for plaintiff and Ld. Counsel for defendant. I have also perused the record carefully. Counsel for defendant has also placed reliance upon the following judgments in support of his arguments: -
(i) Narayanamma and Another V. Govindappa and Others (2019) 19 SCC 42.
(ii) Gt Girish V. Y. Subba Raju (Dead) By LRs and Another 2022 12 SCC 321
17. Issue wise findings on the basis of evidence and arguments are as under: -
Issue No. 3:
"Whether the suit has not been signed, verified and filed by duly authorized person? OPD."
18. The onus of proving this issue was placed on the defendant.
Defendant in his WS has raised an objection that suit has not been properly signed, filed, verified and instituted and the said defect goes to the root of the matter and therefore, the plaintiff cannot maintain the present suit.
Digitally signed ANIL by ANIL KUMAR
SISODIA
KUMAR Date:
SISODIA 2025.08.04
16:29:59 +0530
CC (COMM) 714/2023 M/s Surender Kumar Jain Vs M/s Jay Colour Company Page No. 12 of 21
19. However, neither in evidence nor during the course of final arguments, this issue has been pressed by the defendant. A bare perusal of the record would show that present suit has been filed by a proprietorship concern through its proprietor. It is well settled that proprietorship concern is merely a business name in which a person carries out his trade in commerce. The proprietorship concern is not a separate legal entity. Perusal of the record would show that the plaint has been signed, verified and instituted by the proprietor of the plaintiff firm Sh. Surender Kumar Jain. Hence, in my considered opinion the suit has been signed, filed, verified and instituted by duly authorized person. The issue is accordingly decided in favour of the plaintiff and against the defendant.
Issue no. 2:
"Whether this court has no territorial jurisdiction to entertain and try the present suit? (OPD)"
20. This issue is taken up first as it relates to the competence of this court to entertain and try the present suit. The onus of proving this issue has been placed on the defendant. In the WS, defendant has taken a defence that as per Section 20 CPC, suit could have been filed where the defendant actually and voluntarily resides or carries on his business or personally works for gain or where the cause of action wholly or in part arises. It has further been submitted that in the e-way bills and invoices filed by the plaintiff, the place of delivery of goods was Narela, Delhi and plaintiff has himself admitted in the plaint that principle place of business of defendant is at Narela, Delhi and therefore, no cause of action has arisen within the jurisdiction of this court.
21. Section 20 of the CPC deals with the jurisdiction of this court in ANIL Digitally signed by ANIL KUMAR KUMAR SISODIA Date: 2025.08.04 SISODIA 16:30:12 +0530 CC (COMM) 714/2023 M/s Surender Kumar Jain Vs M/s Jay Colour Company Page No. 13 of 21 respect of the suits for recovery of money. A bare perusal of the section would show that plaintiff can file a suit in the jurisdiction of a court where defendant resides or work for gain or where the cause of action has arisen wholly or in part. A bare perusal of the record would show that defendant was also having his office at Tilak Bazar, Delhi-06 which falls within the territorial jurisdiction of this court. Counsel for plaintiff has also argued that the documents filed by the defendant i.e. authorization letter dated 20.09.2023 Ex. DW-2/1, ledger account of the plaintiff maintained by defendant firm Ex. DW-2/2 and the certificate u/s 65-B of Indian Evidence Act mention the office address of the defendant at Tilak Bazar, Delhi-06. Hence, it cannot be said that defendant was not having its office or was not carrying out the business of the firm from the said address.
22. The claim of the defendant that no cause of action arose within the jurisdiction of this court as goods were supplied to Narela, Delhi is without any merits. Perusal of cross-examination of DW-1 would show that he has admitted that at the relevant time defendant company was operating from 200-203, Gali Saraswali, Tilak Bazar, Delhi-06 and the same address is mentioned in ledger account Ex. DW-1/DX-2. Even DW-2 Kumar Gaurav Bansal in his cross-examination, more particularly in para nos. 2 to 5 has admitted that the affidavit, statement of truth, certificate u/s 65-B of Indian Evidence Act, authority letter and ledger account bears the aforesaid address. This witness has also deposed in para 17 of the cross- examination that payments were made to the plaintiff from Punjab National Bank and Tamil Nadu Merchantile Bank which were situated at Fatehpuri, Chandni Chowk, Delhi-06. These documents and admissions of DW-1 and DW-2 in the cross-examination, clearly establish that defendant firm was also operating from its Tilak Digitally signed ANIL by ANIL KUMAR KUMAR SISODIA Date: 2025.08.04 SISODIA 16:31:01 +0530 CC (COMM) 714/2023 M/s Surender Kumar Jain Vs M/s Jay Colour Company Page No. 14 of 21 Bazar Office at the relevant time. Hence, it cannot be said that this court has no territorial jurisdiction to entertain and try the present suit.
In view of the aforesaid discussion, the issue is accordingly decided against the defendant and in favour of the plaintiff.
Issue nos. 1 & 4:
"1. Whether the defendant has not received the goods against invoices no. SK-384/20-21, SK-456/20-21 and SK-488/20-21 and is not entitled to pay any amount to the plaintiff?(OPD)
4. Whether the plaintiff is entitled for a decree of Rs.33,96,364/- as prayed for? (OPP)"
23. These issues are taken up together as they are interconnected and these issues can be disposed of together by common discussion. Onus of proving issue no. 1 has been cast on defendant and onus of proving issue no. 4 has been cast on the plaintiff.
24. The plaintiff has filed the present suit for recovery of the price of goods supplied to the defendant. The case of the plaintiff is that he had supplied goods worth Rs. 27,38,780/- to the defendant vide three invoices bearing no. SK-384/20-21 (Ex. PW-1/1), SK-456/20-21 (Ex. PW-1/2) and SK-488/20-21 (Ex. PW-1/3). According to the plaintiff, the goods were supplied to the defendant vide e-way bill no. 721163166027 Ex. (PW-1/4), e-way bill no. 751170784796 (Ex. PW-1/5) and e-way bill no. 781173730766 (Ex. PW-1/6). Further the case of the plaintiff is that defendant has failed to make the payment of the goods received vide aforesaid invoices and e-way bills despite repeated demands and service of legal demand notice Ex. PW-1/9.
25. The defendant in his WS has categorically denied the receipt of ANIL Digitally signed by ANIL KUMAR KUMAR SISODIADate: 2025.08.04 SISODIA 16:31:25 +0530 CC (COMM) 714/2023 M/s Surender Kumar Jain Vs M/s Jay Colour Company Page No. 15 of 21 the goods vide aforesaid invoices Ex. PW-1/1 to Ex. PW-1/3 and e-way bills Ex. PW-1/4 to Ex. PW-1/6. It has been stated that even though the defendant has received the invoices during the course of business and the same were also entered in the ledger, no goods or material was supplied to the defendant by the plaintiff and therefore, there is no liability on the defendant to make the payment.
26. Counsel for the plaintiff has argued that defendant has admitted that it was dealing with the plaintiff firm since January, 2020 and has also placed on record its ledger account from 01.04.2019 to 25.09.2023 Ex. DW-1/DX-2 which shows that defendant firm purchased the material from the plaintiff under the aforesaid invoices Ex. PW-1/1 to Ex. PW- 1/3. Counsel for plaintiff has argued that DW-1 Inder Kumar Gupta, Accountant of the defendant has stated in his cross-examination that he has mentioned both purchase from the plaintiff and payment made to the plaintiff in the ledger account of the defendant and has mentioned the invoice number of the plaintiff through which defendant had purchased the goods from the plaintiff. He further deposed that the entries in the ledger are true and correct which shows that goods were purchased by the defendant from the plaintiff vide aforesaid invoices. It was further argued that DW-2 Kumar Gaurav Bansal in his cross-examination has also admitted that the defendant had claimed ITC for the business done with the plaintiff and had also made payment after the aforesaid invoices. DW-2 also admitted that he had not given notice complaining about the non- receipt of the goods against the aforesaid invoices but had complained to the broker. Counsel for the plaintiff has also argued that DW-3 Rahul Bansal, godown incharge of the defendant firm has stated that he has no knowledge about the register being maintained at the godown and he has not placed on record any documents showing receipt ANIL Digitally signed by ANIL KUMAR KUMAR SISODIA Date: 2025.08.04 SISODIA 16:31:37 +0530 CC (COMM) 714/2023 M/s Surender Kumar Jain Vs M/s Jay Colour Company Page No. 16 of 21 of the goods at the godown of the defendant which shows that DW-3 was a planted witness and had no knowledge about the godown or the goods. It was argued that the e-way bills filed by the plaintiff along with the invoices and the fact that defendant had claimed ITC against the invoices Ex. PW-1/1 to Ex. PW-1/3 constitutes sufficient proof of delivery of goods to the defendant.
27. Per Contra, counsel for the defendant has argued that the present suit has been filed by the plaintiff merely on the basis of invoices and e- way bills. The invoices filed by the plaintiff does not bear any acknowledgment of receipt of goods on behalf of the defendant. He further argued that the e-way bills are not sufficient to prove the delivery of the goods to the defendant. He argued that the invoices were fraudulently generated by the plaintiff and no goods were supplied to the defendant against these invoices. It was argued that GST department conducted an inquiry and final order dated 29.01.2025 has held that the plaintiff firm and M/s VDR Colours and Chemical Pvt. Ltd were found to be recipient of ITC without receiving the goods and they had further issued tax invoices without actual supply of goods with the apparent purpose of facilitating the beneficiary firm in an illicit manner to avail ITC fraudulently which shows that the plaintiff firm was indulging in issuing goods-less invoices and were doing sale purchase of invoices or illegally claiming the ITC. It was argued that as per Section 23 of the Indian Contract Act, fraudulent transaction between the parties are void ab initio. Counsel for the defendant has further argued that perusal of cross-examination of PW-1 Surender Kumar Jain would show that PW-1 had purchased goods from M/s Sankalp Traders and Swastik Enterprises and the goods were delivered directly by these firms and the invoices were generated in the name of the plaintiff firm. It was argued that the ANIL Digitally signed by ANIL KUMAR KUMAR SISODIA Date: 2025.08.04 SISODIA 16:31:51 +0530 CC (COMM) 714/2023 M/s Surender Kumar Jain Vs M/s Jay Colour Company Page No. 17 of 21 plaintiff has not placed on record any receipt issued by the Transport Companies who had delivered the goods nor the plaintiff has placed on record any invoices issued by the aforesaid two firms in favour of the plaintiff firm. It was argued that this suit is filed only upon GST paid invoices, e-way bills and ledger maintained by the plaintiff company. However, in the absence of any transport receipts, they are insufficient to discharge onus under Section 31, 33 and 39 of Sale of Goods Act. The conduct of the plaintiff calls for drawing of adverse inference under Section 114 (g) of Evidence Act.
28. In rebuttal, counsel for plaintiff has argued that once the defendant has admitted the receipts of invoices and the same were duly entered in its ledger account and ITC was claimed for the aforesaid invoices, it does not lie in the mouth of the defendant to deny the delivery of the goods. It was also argued that DW-2 in his cross-examination has admitted that he has not raised any objections regarding non-delivery of goods nor any reply to the legal notice was given by the defendant raising any such objections therefore, the case of the plaintiff stands proved. It was also argued that inquiry by the GST department and the order dated 29.01.2025 Ex. DW-4/1 does not have any bearing on this case.
29. On perusal of Sections 31, 33 and 36, of the Sale of Goods Act, there can be no doubt that no sale of a movable articles can be said to be completed unless the delivery happens. It is a settled legal proposition that unless the buyer gets the delivery of the goods purchased, he is not required to pay for the goods. Reliance can further be placed on Article 14 of Schedule attached to Limitation Act, 1963 wherein the limitation period commences from the date of delivery of goods. Thus, it is the duty of buyer to pay up and right of a seller to receive the value of the ANIL Digitally signed by ANIL KUMAR KUMAR SISODIA Date: 2025.08.04 SISODIA 16:32:03 +0530 CC (COMM) 714/2023 M/s Surender Kumar Jain Vs M/s Jay Colour Company Page No. 18 of 21 good, which arises only on the 'date of delivery of goods'. Therefore, the delivery of the goods is intrinsic and an inalienable precondition for a seller of a good to establish his right to show a cause of action and to file a suit for recovery of unpaid bills.
30. It is a cardinal principle of law that plaintiff has to stand on its own legs and cannot take advantage of the weakness of the case of the defendant. The burden of proving his case lies on the plaintiff and this burden never shifts. Plaintiff is required to prove his case by leading cogent evidence and prove all the necessary ingredients of his case. In the present case, the plaintiff was well aware about the defence taken by the defendant in the WS that it had not received the goods against invoices Ex. PW-1/1 to Ex. PW-1/3. Hence, the plaintiff was required to prove the delivery of the goods to the defendant before he can claim the price of the goods. However, the plaintiff has not filed any transport receipts or acknowledgments issued by the defendant regarding the delivery of the goods by the plaintiff. There is no document which could be cited or relied to show that the goods were actually delivered or were acknowledged to have been received by the buyer. As far as evidentiary value of ledger is concerned, it is statutorily provided that ledgers and statements of account have no standalone evidentiary value as provided under Section 34 of Indian Evidence Act. Likewise, standalone invoices do not prove delivery of the goods as mandated under Sections 31, 33 and 39 of Sale of Goods Act unless there is a physical endorsement of delivery over them or there is a separate document so as to show that the goods were actually delivered to defendant or at least delivered to a goods carrier as provided under Section 39 of Sale of Goods Act. The e- way bills Ex. PW-1/4 to Ex. PW-1/6 do carry a reference to the invoices Ex. PW-1/1 to Ex. PW-1/3 but they do not constitute sufficient proof to ANIL Digitally signed by ANIL KUMAR KUMAR SISODIA Date: 2025.08.04 SISODIA 16:32:15 +0530 CC (COMM) 714/2023 M/s Surender Kumar Jain Vs M/s Jay Colour Company Page No. 19 of 21 infer delivery of the goods to the defendant. At the most, these bills show that the goods were put in the transit. However, whether these goods were delivered to the defendant or not, cannot be established with certainty in the absence of receipt of the transporters.
31. The arguments advanced by the counsel for plaintiff that the ledger of the defendant Ex. DW-2/2 mentions these invoices or that ITC was claimed by the defendant against these invoices cannot be given much reliance in the absence of proof of actual delivery of goods. Even if for the sake arguments, it is assumed that the finding of order dated 29.01.2025 Ex. DW-1/4 of the GST department does not have any bearing on the civil courts, the plaintiff cannot escape from his duty to establish the actual delivery of the goods to the defendant.
32. Therefore, in view of the aforesaid discussion, I am of the considered opinion that defendant has failed to prove actual delivery of the goods to the defendant against the invoices bearing no. SK-384/20- 21 (Ex. PW-1/1), SK-456/20-21 (Ex. PW-1/2) and SK-488/20-21 (Ex. PW-1/3). Accordingly, the plaintiff has failed to establish his entitlement for the recovery of Rs. 27,38,780/- being the price of the goods of these invoices. The issues are accordingly decided against the plaintiff and in favour of the defendant.
Issue no. 5:
"Whether the plaintiff is entitled for the interest on the aforesaid amount, if so, at what rate and for which period?(OPP)"
33. The onus of proving this issue was cast on the plaintiff. However, in view of the findings on issues no. 1 & 4 herein above, the question of awarding interest to the plaintiff does not arise when the plaintiff has ANIL Digitally signed by ANIL KUMAR KUMAR SISODIA Date: 2025.08.04 SISODIA 16:32:28 +0530 CC (COMM) 714/2023 M/s Surender Kumar Jain Vs M/s Jay Colour Company Page No. 20 of 21 failed to establish his entitlement for recovery of the price of the goods. The issue is accordingly decided against the plaintiff and in favour of the defendant.
Relief:
34. In view of my findings on the issues nos. 1, 4 & 5 herein above, the suit of the plaintiff is dismissed. No order as to cost.
Decree sheet be prepared accordingly.
File be consigned to Record Room after due compliance.
Digitally signed ANIL by ANIL KUMAR
SISODIA
KUMAR Date:
SISODIA 2025.08.04
16:32:38 +0530
Announced in the open Court (ANIL KUMAR SISODIA)
Dated: 04th August, 2025 DISTRICT JUDGE-04, CENTRAL
TIS HAZARI COURT, DELHI
CC (COMM) 714/2023 M/s Surender Kumar Jain Vs M/s Jay Colour Company Page No. 21 of 21