Delhi District Court
Shree Marketings vs Khushal Enterprises on 30 July, 2025
IN THE COURT OF SHRI DEVENDER KUMAR, DISTRICT JUDGE
(COMMERCIAL COURT-01), EAST DISTRICT
KARKARDOOMA COURTS : DELHI
CS (Comm) No. 114/2024
Ashok Agarwal
Proprietor of Shree Marketings
Corporate Office at:
G-308, G Block, Preet Vihar,
Delhi -110092 ................Plaintiff
Versus
Lalit Sharma
Proprietor of Khushal Enperprises
Shop / Office at:
E-10, Surajpur Industrial Area,
Site- C, Greater Noida, UP -201308
Office at :
D-217, Vivek Vihar,
Delhi -110092 ................Defendant
Date of institution : 09.04.2024
Date of reserving judgment : 26.07.2025
Date of judgment : 30.07.2025
(Suit for recovery of Rs. 3,40,381/- alongwith pendente lite and future
interest, litigation and other miscellaneous charges)
Digitally signed
by DEVENDRA
DEVENDRA KUMAR
CS (Comm) No. 114/2024 KUMAR Date:
Shree Marketings Vs. Khushal Enterprises 2025.07.30 1/24
16:15:00 +0530
JUDGMENT :-
1. Vide this judgement, I shall dispose off this suit for recovery of Rs. 3,40,381/- along with interest @ 18% per annum from the date of filing of this suit till realization filed by the plaintiff. Brief facts of the case are as under:
2. Plaintiff has alleged to be is a proprietor of firm M/s. Shree Marketings and authorized to institute this suit. Plaintiff has alleged that he is engaged and dealing in business of chemicals and other products etc. and doing business in the name and style of M/s. Shree Marketings, whereas the defendant is a proprietor of M/s Khushal Enterprises and purchased certain products i.e. Wax semi refined paraffin, PVC stablizer and sterlic acid from the plaintiff. It is further alleged that both the parties maintained their books of accounts in routine course of business during the year 2020-21 and, as per books or accounts ledger of the plaintiff, an amount of Rs. 3,40,380/- is outstanding towards the defendant, but the defendant has failed to pay outstanding amount despite repeated reminders and demands.
2.1. Plaintiff has further alleged that the defendant is in default of amount of Rs. 3,40,381/- and transactions between the parties were commercial in nature, due to the defendant is also liable to pay interest @ 18 % per annum against outstanding amount, which comes to Rs. 1,68,488/- for the period from 01.02.2021 to 31.08.2023. It is further alleged that the plaintiff has repeatedly asked the defendant to make payment of invoices but the defendant failed to pay due to Covid 19 and, thereafter, he turned dishonest and has failed to make payment. It is further alleged that the plaintiff also Digitally signed CS (Comm) No. 114/2024 by DEVENDRA Shree Marketings Vs. Khushal Enterprises DEVENDRA KUMAR 2/24 KUMAR Date: 2025.07.30 16:15:06 +0530 served a legal notice dated 06.10.2023 upon the defendant thereby demanding outstanding amount but the defendant still failed to make payment, due to the plaintiff has filed this suit.
2.2. Plaintiff has further alleged that he also approached to DLSA for pre litigation mediation but the defendant again failed to appear and case returned back as non- starter on 20.01.2024. It is further alleged that the plaintiff supplied goods to the defendant within the jurisdiction of this court and payment was also to be made at Delhi, within the jurisdiction of this court, due to this court has territorial jurisdiction to entertain this suit and suit is liable to be decreed.
3. Defendant has filed written statement thereby denying all the allegations of the plaintiff and has alleged that the plaintiff has filed this suit just to harass the defendant and to take undue advantage of his own wrong. It is further alleged that the plaintiff has suppressed vital information as well as material facts from this court and has played a fraud against the court. It is further alleged that during business relationship, the plaintiff won faith of the defendant and impressed upon him to believe and he took advantage of his illegal acts, as the plaintiff received payment after delivery and raised false, fabricated and illegal bills showing that the defendant is under debt. It is further alleged when the defendant raised objection, he threatened either to pay amount in cash or online, otherwise he will take legal action, whereas neither goods were ordered or received nor supplied by the plaintiff.
Digitally signed by DEVENDRACS (Comm) No. 114/2024 DEVENDRA KUMAR
Shree Marketings Vs. Khushal Enterprises 3/24
KUMAR Date: 2025.07.30
16:15:12 +0530
3.1. Defendant has further alleged that the defendant never received or signed bills and even bills were never sent to him. It is further alleged that the defendant always paid amount of bills in cash whenever goods were purchased and question of outstanding dues does not arise and even any interest against outstanding amount is also out of question. Defendant has denied all the allegations of the plaintiff and has prayed that this suit is liable to be dismissed.
4. Plaintiff has filed replication to WS thereby denying allegations of the defendant and has reaffirmed his pleadings.
5. On the basis of pleadings of the parties, the following issues were framed vide order dated 04.12.2024 as under:
ISSUES:
1. Whether the plaintiff is entitled for a decree of recovery of Rs.
3,40,381/- against the defendant? OPP
2. Whether the plaintiff is entitled for any pre-suit, pendente-lite and future interest? If so, at what rate and for which period? OPP
3. Whether the suit filed by the plaintiff is barred by limitation?
OPD
4. Relief
6. To discharge the onus, the plaintiff has examined PW1 Ashok Aggarwal, the proprietor of the plaintiff, who has repeated his allegations levelled in the plaint during examination-in-chief and has relied upon documents Ex.PW1/1 to Ex. PW1/7.
Digitally signedCS (Comm) No. 114/2024 by DEVENDRA
Shree Marketings Vs. Khushal Enterprises
DEVENDRA KUMAR 4/24
KUMAR Date: 2025.07.30
16:15:18 +0530
6.1. During cross examination, PW1 has admitted that he is looking after day-to-day affairs of his firm and invoices Ex.PW1/1 (colly) bear signature and seal of Mr. Akash at point A, who was one of the employees of the defendant, but it is denied that no goods were supplied against invoices Ex.PW1/1(colly). It is further denied that invoices Ex.PW1/1(colly) are forged and fabricated, as some of them bear no stamp of the defendant. It is voluntarily deposed that some goods were delivered in the factory of the defendant, having stamp on invoices and some goods were delivered at the residence of the defendant, which do not have stamp of the defendant. It is further deposed that the plaintiff has paid GST against invoices Ex.PW1/1(colly) but no proof has been placed on record regarding such payment. It is admitted that ledger account Ex.PW1/7 has no entry of amount of Rs.25,000/- received by him in the month of December, 2020 from the defendant, as mentioned in Para 15 of plaint. It is denied that ledger Ex.PW1/2 (colly) is forged document, as same does not reflect true entries. It is further admitted that as per ledger Ex.PW1/2(colly), last transaction between the plaintiff and defendant had taken place on 31.12.2020. It is further denied that the plaintiff is not entitled to recover any amount from the defendant, or that he has filed this suit to harass the defendant.
7. Defendant has examined DW1, Lalit Sharma, who has repeated allegations in written statement during examination-in-chief but has not relied upon any document.
Digitally signed by DEVENDRACS (Comm) No. 114/2024 DEVENDRA KUMAR
Shree Marketings Vs. Khushal Enterprises KUMAR 5/24
Date: 2025.07.30
16:15:24 +0530
7.1. During cross examination, DW1 has deposed that he is proprietor of the defendant firm, dealing in PVC pipes, having office at E-10, Greater Noida. It is further deposed that he does not have any office of firm at Delhi. It is further deposed that he had business dealings with the plaintiff for one year before Corona period but did not remember the exact period. It is further deposed that invoices dated 07.10.2020, 16.10.2020 and 21.12.2022, the part of Ex.PW1/1(colly) bear stamp of his firm at Point A, but he did not know who put signatures on these invoices. It is admitted that a boy namely Aakash was working with him, but now has left job, probably in the year 2021. It is denied that invoices Ex.PW1/1(colly) were signed by his employee Akash after receiving goods. It is further deposed that goods used to be received by him or his employee Sandeep Sharma and it is admitted that the defendant received goods against invoices, having stamp of the defendant at Point A in Ex.PW1/1(colly). He was not aware, if the defendant used to retain first copy of invoices, second copy of invoice or third copy of invoice, as these things were being looked after by his accountant. It is further deposed that he used to pay amount in cash or through cheque, but it is denied that no amount in cash was ever paid by him to the plaintiff during the year 2020-21. It is admitted that he did not have any proof to show that any amount was paid by him to the plaintiff in cash during the year 2020-2021. It is further denied that he is liable to pay suit amount to the plaintiff.
8. I have heard the arguments and perused the record. Though no issue regarding territorial jurisdiction of this court has been framed, yet Ld. Counsel for defendant has vehemently argued that this court has no CS (Comm) No. 114/2024 Digitally signed by DEVENDRA Shree Marketings Vs. Khushal Enterprises DEVENDRA KUMAR 6/24 KUMAR Date: 2025.07.30 16:15:31 +0530 territorial judication to entertain this case, as the plaintiff has office at Noida, UP and the defendant is also carrying on business in UP and material was also supplied at Noida, UP, due to no part of cause of action had ever arisen within the jurisdiction of this court and this court has no territorial jurisdiction of this court. In fact, this issue pertains to legality of matter and competence of this court, due to issue requires detail discussion.
9. Territorial Jurisdiction of this court: Since no issue regarding territorial jurisdiction of this court was framed by this court, accordingly this issue has to be determined on the basis of material available on record. Ld. Counsel for defendant has argued that the plaintiff has wrongly invoked territorial jurisdiction of this court, whereas no part of cause of action had ever arisen within the jurisdiction of this court. It is further argued that the plaintiff supplied material from Noida, UP to the defendant at Greater Noida, UP and bills / invoices carrying such descriptions. It is further argued that the plaintiff has alleged that the defendant also has been carrying on business within the jurisdiction of this court, whereas there is no proof to this effect and even address at Vivek Vihar is not pertaining to any office of the defendant, due to this court has no territorial jurisdiction to entertain this case.
10. On the other hand, Ld. Counsel for plaintiff has opposed these submissions and has argued that bills/ invoices have description of banker of the plaintiff and payment was to be made at Delhi, due to this court has territorial jurisdiction to entertain this case and suit is liable to be decreed.
Digitally signed by DEVENDRACS (Comm) No. 114/2024 DEVENDRA KUMAR
Shree Marketings Vs. Khushal Enterprises KUMAR Date: 7/24
2025.07.30
16:15:37 +0530
11. Admittedly, section 20 of CPC governs territorial jurisdiction of the court in money recovery cases, which is as under;
Section - 20. Other suits to be instituted where defendants reside or cause of action arises.--Subject to the limitations aforesaid, every suit shall be instituted in a Court within the local limits of whose jurisdiction--
(a) the defendant, or each of the defendants where there are more than one, at the time of the commencement of the suit, actually and voluntarily resides, or carries on business, or personally works for gain; or
(b) any of the defendants, where there are more than one, at the time of the commencement of the suit, actually and voluntarily resides, or carries on business, or personally works for gain, provided that in such case either the leave of the Court is given, or the defendants who do not reside, or carry on business, or personally works for gain, as aforesaid, acquiesce in such institution; or
(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.
12. The abovesaid section 20 of CPC came into interpretation before Hon'ble High Court of Delhi in cases titled Rattan Singh Associates (P) Ltd. v. Gill Power Generation Co. Pvt. Ltd., Arbitration Application No. 242/2006 and Writ Petition (C) No. 5133/2005 titled Jai Ganesh Petroleum v. Union of India and following principles were culled out for jurisdiction as under :--
i. making and signing of a contract is part of cause of action; ii. parties cannot by consent confer jurisdiction on a court; iii. In the case of several courts having jurisdiction, parties can legally agree to exclude the jurisdiction of any of such courts and elect to restrict territorial jurisdiction to one out of such courts which otherwise has jurisdiction;Digitally signed
CS (Comm) No. 114/2024 by DEVENDRA
Shree Marketings Vs. Khushal Enterprises DEVENDRA KUMAR 8/24
KUMAR Date: 2025.07.30
16:15:43 +0530
iv. the high court must be satisfied from the entire facts pleaded in support of the cause of action that those facts which constitute the cause or are necessary to decide the dispute have wholly arisen within its territorial jurisdiction, or, in any case, which have, atleast in part, arisen within its jurisdiction;
v. each and every fact pleaded in the petition does not ipsofacto lead to the conclusion that those facts which constitute the cause of action vesting territorial jurisdiction upon the court to adjudicate upon the lis;
vi. only those facts pleaded which have a nexus or relevance with the issues involved in the lis confer territorial jurisdiction on the court; vii. in determining an objection relating to lack of territorial jurisdiction, the court must take all the facts pleaded in support of the cause of action as pleaded in the petition into consideration without embarking upon an inquiry as to the correctness or otherwise to the fact that;
viii. A question of territorial jurisdiction must be apparent on the facts pleaded in the petition, the source or otherwise of the averments made in the writ petition being immaterial. In matters where the parties have agreed to restrict jurisdiction to one or the other court out of several courts which may have territorial jurisdiction, such clause would be enforceable only if the litigation which has arisen falls within the domain of the subject matter which is being provided in such clause. The parties may have confined jurisdiction to litigation arising only under the agreement. In such cases, the court has to arrive at a finding that the litigation between the parties was within the domain of the clause confining jurisdiction. If it does not, then the territorial jurisdiction of the court could be barred;
ix. The court must be satisfied that all relevant facts which have merely a substantial nexus with the lis are located within its territorial jurisdiction;
x. Even if it were to be held that a court has jurisdiction, yet guided by principles of forum non-conveniens, the court may divert the parties to the court having a closer connection with the subject matter of the litigation. Residence of parties, location of evidence, situs of the dispute and such like considerations could guide the decision of the court to this effect.
xi. To the above, yet another principle requires to be added. It also requires to be borne in mind that a trivial or insignificant part of the cause of action arising at a particular place or where it may have CS (Comm) No. 114/2024 Digitally signed by DEVENDRA Shree Marketings Vs. Khushal Enterprises DEVENDRA KUMAR 9/24 KUMAR Date: 2025.07.30 16:15:54 +0530 incidentally arisen, would not be sufficient to confer territorial jurisdiction on the court, it is the court within whose jurisdiction, the cause of action has substantially or predominantly arisen which would have territorial jurisdiction to adjudicate upon the lis.
13. Further, a cause of action partly or wholly is main criteria to determine territorial jurisdiction of the court. A cause of action is a bundle of facts comprising of various essential facts giving rise to filing of a case. Cause of action has been defined in case titled A B C Laminart (P) Limited v. A P Agencies, Salem, (1989) 2 SCC 163 as under :
12. A cause of action means every fact, which if traversed, it would be necessary for the plaintiff to prove in order to support his right to a judgment of the court. In other words, it is a bundle of facts which taken with the law applicable to them gives the plaintiff a right to relief against the defendant. It must include some act done by the defendant since in the absence of such an act no cause of action can possibly accrue. It is not limited to the actual infringement of the right sued on but includes all the material facts on which it is founded. It does not comprise evidence necessary to prove such facts, but every fact necessary for the plaintiff to prove to enable him to obtain a decree. Everything which if not proved would give the defendant a right to immediate judgment must be part of the cause of action. But it has no relation whatever to the defence which may be set up by the defendant nor does it depend upon the character of the relief prayed for by the plaintiff.
15. In the matter of a contract there may arise causes of action of various kinds. In a suit for damages for breach of contract the cause of action consists of the making of the contract, and of its breach, so that the suit may be filed either at the place where the contract was made or at the place where it should have been performed and the breach occurred. The making of the contract is part of the cause of action. A suit on a contract, therefore, can be filed at the place where it was made. The determination of the place where the contract was made is part of the law of contract. But making of an offer on a particular place does not form cause of action in a suit for damages for breach of contract. Ordinarily, acceptance of an offer and its intimation result in a contract and hence a suit can be filed in a court within whose jurisdiction the acceptance was communicated. The performance of a contract is part of cause of action and a suit in respect of the breach can always be filed at the place where the contract should have been Digitally signed CS (Comm) No. 114/2024 by DEVENDRA Shree Marketings Vs. Khushal Enterprises DEVENDRA KUMAR 10/24 KUMAR Date:
2025.07.30 16:16:02 +0530 performed or its performance completed. If the contract is to be performed at the place where it is made, the suit on the contract is to be filed there and nowhere else. In suits for agency actions the cause of action arises at the place where the contract of agency was made or the place where actions are to be rendered and payment is to be made by the agent. Part of cause of action arises where money is expressly or impliedly payable under a contract. In cases of repudiation of a contract, the place where repudiation is received is the place where the suit would lie. If a contract is pleaded as part of the cause of action giving jurisdiction to the court where the suit is filed and that contract is found to be invalid, such part of cause of the action disappears. The above are some of the connecting factors.
After going above judgment, it is clear that single fact cannot constitute cause of action to confer territorial jurisdiction upon the court and substantial part of cause of action necessarily must have taken place within the jurisdiction of the court to confer jurisdiction.
14. In present case, perusal of purchase orders / invoices Ex.PW1/1 (colly) would reveal that the plaintiff has been carrying on business at Noida, UP and material was also dispatched from Noida to Greater Noida, UP, which suggests that no part of cause of action had ever taken place at Delhi, within the territorial jurisdiction of this court. However, bills invoices Ex.PW1/1(colly) are bearing Company's bank details where amount was payable to the plaintiff i.e. Kotal Mahindra Bank, A/c No. 631044001179, Preet Vihar, Delhi. Ld. Counsel for Plaintiff has argued that due payment of amount at a particular bank causes a part of cause of action in terms of section 20 of CPC, due to this court has territorial jurisdiction to entertain this suit. In support of his arguments, Ld. Counsel has relied upon case titled Auto Movers v. Luminous Power Technologies Pvt. Ltd., 2021 SCC Online Del 4387.
Digitally signed by DEVENDRACS (Comm) No. 114/2024 DEVENDRA KUMAR
Shree Marketings Vs. Khushal Enterprises KUMAR Date: 11/24
2025.07.30
16:16:07 +0530
15. The Hon'ble High Court of Delhi in case titled Auto Movers v. Luminous Power Technologies Pvt. Ltd., 2021 SCC Online Del 4387 has held that:
22. When, in the present case, the part cause of action has arisen also on account of the payments made by the petitioner/defendant directly into the bank account of the respondent/plaintiff, even if these were not on regular basis, since there is nothing to show that the place of payment had been fixed, even without following the principle that the 'debtor must seek out the creditor', it is clear that the Delhi Courts have jurisdiction to try the suit and the invoice does not vest jurisdiction in a court which had no jurisdiction at all.
In view of abovesaid case, it stands proved that the payment to the banker of the plaintiff at Preet Vihar, Delhi makes out a partial cause of action within the territorial jurisdiction of this court and this court has territorial jurisdiction to entertain this case and plea taken by the defendant has no merit.
16. Now issue wife findings are to be given. My issue-wise findings are as under:
Limitation of Suit: Ld. Counsel for defendant has vehemently argued that this suit is not within limitation, due to Ld. Predecessor also framed an issue regarding it. Since issue of limitation is connected to maintainability of this, accordingly, it has to be dealt with first.
17. ISSUE No.3 - I am taking up issue no. 3 first, as it is pertaining to limitation. The onus to prove issue no.3 was fixed upon the defendant but the defendant has not led any evidence to discharge this onus to prove this issue. However, Ld. Counsel for defendant has argued that statement of Digitally signed by DEVENDRA CS (Comm) No. 114/2024 DEVENDRA KUMAR Shree Marketings Vs. Khushal Enterprises KUMAR Date: 2025.07.30 12/24 16:16:27 +0530 account of the plaintiff Ex.PW1/2 (colly) has revealed that the last payment of Rs. 1,30,000/- was made by the defendant on 19.12.2020 and, thereafter, no transaction had taken placed between them, due to limitation started from said date only, whereas the plaintiff filed application for pre institutional mediation on 19.12.2023, thereby meaning that the plaintiff has filed this suit after a lot of delay. It is further argued that even pre institutional mediation u/s 12 A of The Commercial Courts Act was also with delay, due to this suit is liable to be dismissed on the ground of limitation. It is further argued that non-starter report of DLSA Ex. PW1/7 was prepared on 20.01.2024, whereas the plaintiff has filed this case on 09.04.2024, which suggests that this suit is barred by limitation and same is liable to be dismissed.
18. On the other hand, Ld. Counsel for plaintiff has opposed these submissions and has argued that no doubt last payment by the defendant was made on 19.12.2020 and the plaintiff also approached to DLSA for pre institutional mediation on 19.12.2023 and then instituted this suit, but still this suit is within the period of limitation. It is further argued that due to Covid-19 Pandemic, limitation for filing of a litigation during the period from 15.03.2020 to 28.02.2022 was excluded by Hon'ble Supreme Court of India, in case titled In Re; Cognizance for Extension of Limitation, due to limitation for a period from 15.03.2020 till 28.02.2022 has to be excluded to count limitation and the suit filed by the plaintiff after 28.02.2022 is very well maintainable. It is further argued that limitation initially started in the month of March, 2022 and continued for next 3 years due to this suit filed in the year 2024 is very well within limitation and is maintainable.
Digitally signedCS (Comm) No. 114/2024 by DEVENDRA
Shree Marketings Vs. Khushal Enterprises DEVENDRA KUMAR 13/24
KUMAR Date:
2025.07.30
16:16:33 +0530
19. Admittedly, the last payment by the defendant to the plaintiff was made on 19.12.2020 and the limitation to file this suit would start from next day for next 3 years, as first day of cause of action has to be excluded. Limitation for 3 years to file this suit would start w.e.f. 19.12.2020 and case was filed for pre-institutional mediation on 19.12.2024 and non-starter report was prepared on 20.01.2024. The period during pre-institutional mediation would be excluded from limitation.
20. Plaintiff has filed this case on 09.04.2024 against the last payment on 19.12.2020 i.e. beyond the period of 3 years. However, there was a Corona outbreak and lockdown was imposed throughout country, due to Hon'ble Supreme Court of India excluded period from limitation in case titled In Re: Cognizance for Extension of Limitation, Suo Motu Writ Petition (C) No. 3/2020, which followed by Multiple Miscellaneous Applications and period between 15.03.2020 till 28.02.2022 was excluded from limitation. In fact, this period was excluded from computation of limitation and was not extended. The extension was only for those cases where limitation had expired during this period and additional 90 days were extended. However, in this case, limitation for filing of this case was started w.e.f. 19.12.2020 and during that period was lockdown, so limitation could not be started and started only after 28.02.2022. If the period of 3 years is computed from 01.03.2022 onwards, then period of 3 years would go till 28.02.2025, whereas this suit has been filed on 09.04.2024, which is within the period of limitation.
CS (Comm) No. 114/2024 Digitally signed
Shree Marketings Vs. Khushal Enterprises by DEVENDRA 14/24
DEVENDRA KUMAR
KUMAR Date: 2025.07.30
16:16:39 +0530
21. As such, the suit filed by the plaintiff is within the period of limitation and the plaintiff has discharged the onus to prove this issue and issue no.3 is decided in favor of the plaintiff and against the defendant.
22. Issue Nos. 1 & 2: The onus to prove both the issues was fixed upon the plaintiff. To discharge the onus, the plaintiff has examined himself as PW1 Ashok Agarwal and has deposed that he is proprietorship of firm M/s Shree Marketing, which dealing in chemicals and other products. It is further deposed that the defendant is also a proprietor of firm M/s Khushal Enterprises and purchased certain products i.e. Wax semi refined paraffin, PVC stablizer and sterlic acid, during the year 2020-21 against invoices Ex.PW1/1(colly). It is further deposed that as per leader maintained by the plaintiff in routine course of business, an amount of Rs. 3,40,381/- is outstanding towards the defendant. It is further deposed that the defendant failed to pay amount despite service of legal notice Ex.PW1/3, which was duly served upon the defendant through postal receipt Ex.PW1/4, due to the defendant is also liable to pay interest @ 18% per annum, which comes to Rs. 1,68,488/-.
23. PW1 has denied during cross examination that invoices are fake or that goods were not supplied against these invoices, but it is admitted that he has paid GST against invoices Ex.PW1/1 (colly) but has not placed on record any proof to this effect. It is further admitted that there is no entry of amount of Rs. 25,000/- paid in cash, in ledger account Ex.PW1/2(colly), but it is denied that Ex. PW1/2 (colly) is forged document. On the other hand, DW1 Lalit Sharma has deposed that the plaintiff has manipulated Digitally signed CS (Comm) No. 114/2024 by DEVENDRA Shree Marketings Vs. Khushal Enterprises DEVENDRA KUMAR 15/24 KUMAR Date: 2025.07.30 16:16:45 +0530 false and fabricated bills, or that bills/ invoices are not containing his sign and signatures. However, it is admitted that he is proprietor of the defendant firm and dealing in PVC pipes, having office at E-10, Greater Noida, but it is denied to have any office at Delhi. It is further admitted that he is dealing with the plaintiff for one year prior to Corona period and invoices dated 07.10.2020, 16.10.2020 and 21.12.2022 bear stamp of his firm at point A, whereas he was not aware about signatures on bills. It is admitted that a boy namely Akash was working in his firm but now has left job in the year 2021, but it is denied that invoices Ex.PW1/1 (colly) were signed by his employee Akash after receiving the goods. It is further deposed that his employee namely Sandeep Sharma used to receive goods against invoices, having stamp of the defendant at point A, out of Ex. PW1/1 (colly). It is admitted that he has no proof to show that any amount was paid by him to the plaintiff in cash during the year 2020-21.
24. After going through the testimonies of both the parties, it stands proved that they had business transactions. Plaintiff has proved invoices Ex.PW1/1(Colly) to support such transactions; however, the defendant has admitted only 3 invoices, out of invoices Ex.PW1/1(colly). Rather, the defendant has claimed that material was supplied only against those invoices which are bearing seal of his firm, but it is beyond explanation, if the defendant did not receive material against remaining invoices, then why he did not raise this objection when the plaintiff served a legal notice for demand of outstanding amount for those invoices, or when the plaintiff approached to DLSA in pre-institutional mediation. Contrary to it, he preferred to deny all the invoices and stated forged, which cannot be Digitally signed by DEVENDRA CS (Comm) No. 114/2024 DEVENDRA KUMAR Shree Marketings Vs. Khushal Enterprises KUMAR Date: 16/24 2025.07.30 16:16:51 +0530 proved or believed.
25. Plaintiff has claimed that he supplied material in the office of the defendant and one Akash used to receive those goods. However, the defendant has denied this fact, but DW1 has admitted that one person namely Aakash used to work in the office and now has left his job. If the recipient of the material used to work in firm, then it could not be denied that the defendant did not receive those goods against denied invoices. Defendant has alleged that one Sandeep Sharma used to receive goods in firm but Sandeep Sharma is also not examined to prove the he received or not received those goods. Similarly, Aakash was appropriate witness to deny receipt of goods but Akash is also not examined to prove that he never received goods against invoices Ex.PW1/1(colly), or that invoices do not bear his signatures. As such, it stands proved that the goods were supplied by the plaintiff to the defendant against Ex.PW1/1(colly).
26. Now issue arises, as to whether the plaintiff is entitled for recovery of dues reflected in his ledger or not? Plaintiff has proved that he has been maintaining statement of account Ex. PW1/2 (colly), in the regular course of his business, and as per leader Ex.PW1/2(colly), an amount of Rs. 3,40,381/- is outstanding towards the defendant. However, the defendant has denied this liability and rather has disputed authenticity of invoices and ledger thereby arguing that PW1 has admitted during cross examination that an amount of Rs. 25,000/- paid by the defendant is not reflected in leader Ex.PW1/2(colly). Even otherwise, it is also not reflected in ledger. It is further argued that ledger was not maintained in the regular course of Digitally signed CS (Comm) No. 114/2024 by DEVENDRA Shree Marketings Vs. Khushal Enterprises DEVENDRA KUMAR 17/24 KUMAR Date: 2025.07.30 16:16:59 +0530 business, due to it did not carry any presumption and the plaintiff was supposed to prove supporting document to corroborate entries in ledger, which is not proved by the plaintiff, due to this suit is liable to be dismissed.
27. Admissibility of ledger accounts: Before deciding the plea of the defendant, it is necessary to go through legal proposition regarding ledger / statement of account maintained by the parties. In case titled Chandradhar Goswami & Ors vs The Gauhati Bank Ltd, 1967 AIR SC 816, it has held that;
The main question urged before us is that there is no evidence besides the certified copy of the account to prove that a sum of Rs. 10,000/- was advanced to the appellants and therefore in view of s. 34 of the Evidence Act the appellants cannot be saddled with liability for that amount. Section 34 is in these terms:-
"Entries in books of account, regularly kept in the course of business, are relevant whenever they refer to a matter into which the court has to inquire, but such statements shall not alone be sufficient evidence to charge any person with liability."
It is clear from a bare perusal of the section that no person can be charged with liability merely on the basis of entries in books of account, even where such books of account are kept in the regular course of business. There has to be further evidence to prove payment of the money which may appear in the books of account in order that a person may be charged with liability thereunder, except where the person to be charged accepts the correctness of the books of account and does not challenge them. In the present case, however, the appellants did not accept the correctness of the books of account. We have already indicated that they went to the. length of saying that the accounts were not correctly kept, and were fraudulent.
In any case as the appellants had not admitted the correctness of the accounts filed by the bank, particularly after March 1, 1947, the bank had to prove payment of Rs. 10,000/- on March 19,1947 if it wanted to charge the appellants, with liability for that amount, But all that the bank did was to produce a certified copy of account under s. 4 of the Digitally signed by DEVENDRA CS (Comm) No. 114/2024 DEVENDRA KUMAR Shree Marketings Vs. Khushal Enterprises KUMAR Date: 18/24 2025.07.30 16:17:15 +0530 Bankers' Books Evidence Act, No. XVIII of 1891. Section 4 of that Act reads thus-
"Subject to the provisions of this Act, a certified copy of any entry in a banker's book shall in all legal proceedings be received as prima facie evidence of the existence of such entry, and shall be admitted as evidence of the matters, transactions and accounts therein recorded in every case where, and to the same extent as, the original entry itself is now by law admissible, but not further or otherwise".
It will be clear that s. 4 gives a special privilege to banks and allows certified copies of their accounts to be produced by them and those certified copies become prima facie evidence of the existence of the original entries in the accounts and are admitted as evidence of matters, transactions and accounts therein, but such admission is only where, and to the same extent as, the original entry itself would be admissible by law and not further or otherwise. Original entries alone under s. 34 of the Evidence Act would not be sufficient to charge any person with liability and as such copies produced under s. 4 of the Bankers' Books Evidence Act obviously cannot charge any person with liability. Therefore, where the entries are not admitted it is the duty of the bank if it relies on such entries to charge any person with liability, to produce evidence in support of the entries to show that the money was advanced as indicated therein and thereafter the entries would be of use as corroborative evidence. But no person can be charged with liability on the basis of mere entries whether the entries produced are the original entries or copies under s. 4 of the Banker's Books Evidence Act.
We are therefore of opinion that in view of s. 34 of the Evidence Act the appellants cannot be saddled with liability for the sum of Rs. 10,000/- said to have been advanced on March, 19,1947 on the basis of a mere entry in the amount. Section 34 says that such entry alone shall not be sufficient evidence, and so some independent evidence had to be given by the bank to show that this sum was advanced. What would be the nature of such independent evidence would certainly depend upon the facts of each case; but there can be no doubt that some independent evidence to show that advance had been made has to be given.
28. Further, in case titled M/S. J.K. Synthetics Ltd. vs M/S. Dynamic Cement Traders, CS(OS) No.782/1998 Digitally signed by DEVENDRA CS (Comm) No. 114/2024 DEVENDRA KUMAR Shree Marketings Vs. Khushal Enterprises KUMAR Date: 2025.07.30 19/24 16:17:30 +0530
6. The only averment in the plaint for claiming amount due is that the amount claimed in the suit is an entry dated 31.3.1995 which is found in the statement of account of the plaintiff. The statement of account of the plaintiff has been proved and exhibited as Ex.PW1/50. This is a statement of account from 1.4.1993 to December, 1997. Another document, which of course, is not a statement of account but only some of the entries in the statement of account is Ex.PW1/49. In view of Section 34 of Indian Evidence Act, 1872, a mere entry in the statement of account is not sufficient to fasten any liability and the entries in the statement of account have to be proved by means of the documents/vouchers of the transaction. Admittedly, the entry dated 31.3.1995 in Ex.PW1/50 for ` 69,36,240.36/- has not been substantiated by means of any document showing as to how and for what this amount of ` 69,36,240.36/- is due. The Supreme Court in the judgment reported as Central Bureau of Investigation Vs. V.C. Shukla & Ors. (1998) 3 SCC 410 has observed that Section 34 is in two parts. The first part speaks of relevancy of the entries in evidence once the books of accounts are shown to be regularly kept in the course of business and the second aspect is that even if it is proved that the statements of accounts are regularly kept in course of business, yet, the statement of account/entry alone is not sufficient evidence to charge a person with liability. The object of law is that mere entries should not be sufficient to fasten the monetary liability unless documents of transaction (which would be invoices, challans and receipts of supply of goods etc) are filed and exhibited in support of the entries made. I therefore hold that mere entry of ` 69,36,240.36/- existing in the statement of account in Ex.PW1/50 is not sufficient to charge the defendant with liability as claimed by the plaintiff in the suit. Once this entry is not proved, then, even if I take the payment of ` 2 lacs made by the defendant on 21/22.4.1995 and as admitted by the defendant in his cross- examination, will not in any manner help to prove the existence of debit entry of ` 69,36,240.36/-. Even the plaint is totally silent as to because of what reason this entry exists i.e for supply of goods or towards interest or towards any other aspect, and if so what are such invoices/agreement qua the supply or interest or other aspects. I therefore hold that the plaintiff has failed to prove the entries dated 31.3.1995
29. Further, in case titled M/S ICICI Bank Limited vs Kamini Sharma & Anr., RFA 297/2015, it is held that
14. Section 34 of the Evidence Act clearly provides that the books of accounts maintained in electronic form are relevant. Under Section 62 of the Evidence Act, original documents constitute primary Digitally signed by DEVENDRA CS (Comm) No. 114/2024 DEVENDRA KUMAR Shree Marketings Vs. Khushal Enterprises 20/24 KUMAR Date:
2025.07.30 16:17:37 +0530 evidence. In the context of electronic evidence, printouts of electronic documents are considered as secondary. However, judicial notice needs to be taken of the fact that most accounts today are not maintained in paper form, but electronic form. The primary evidence could be the server on which the statement of accounts is stored. These servers may store the statement of accounts of multiple clients in the hard drive. It would be an impossibility to require the Plaintiff bank to produce the hard drive of the server in every suit for recovery filed by it. Under such circumstances, the Plaintiff bank has no option but to produce the secondary evidence i.e., a printout of statement of accounts, duly certified by a responsible official of the bank along with a certificate under Section 65B of the Evidence Act. Needless to add, the certificate under Section 65B of the Evidence Act has now become a usual practice in almost all of the suits, inasmuch as, in every such suit, parties are bound to place reliance on electronic documents. The mere fact, that the printout is being filed as secondary evidence along with the necessary certificate, does not make it any less valid. The said accounts statement would be rebuttable if any discrepancy is found or pointed out. But in the absence of the same, there is no reason as to why the statement of accounts filed by the Plaintiff bank should be disbelieved.
30. In another case titled Om Prakash v. Central Bureau of Investigation, 2017 VII AD (Del) 649, it is held as under:
"5.18. A conjoint reading of Section 34 of the Indian Evidence Act, Sections 2(8), 2A and 4 of the Banker's Book Evidence Act and the various pronouncements of the Supreme Court lead to the conclusion that firstly, the prosecution is required to lead admissible evidence to prove the entries in the books of accounts and after having led admissible evidence link the same with other evidence on record to prove the guilt of the accused beyond reasonable doubt. Thus, in case the statements of accounts exhibited on record are accompanied by certificate as envisaged under Section 2A of the Bankers' Books Evidence Act, the statements of accounts would be admissible in evidence. An objection as to the person exhibiting the said statements of account i.e. an objection to the mode of proof and not admissibility, has to be taken at the time of exhibition of the documents. Therefore if certified copies of the statements of accounts have been exhibited as per the requirement of Section 2A of the Act, the statement of account would be admissible and in case no objection to the witness proving the same is taken at the time when the document is exhibited, the document would be validly read in evidence. However, if the statements of accounts have been exhibited without the necessary Digitally signed by DEVENDRA CS (Comm) No. 114/2024 KUMAR Shree Marketings Vs. Khushal Enterprises DEVENDRA 21/24 Date:
KUMAR 2025.07.30
16:17:43
+0530
certificate as contemplated under Section 2A of the Act, the same being inadmissible in evidence, even in the absence of an objection taken as to the mode of proof during trial, this Court cannot read the same in evidence even though marked as an exhibit."
31. After going through the abovesaid legal proposition, it is cleared that the statement of account / ledger maintained by the parties does not carry any presumption, until and unless it is authenticated under Banker's Books Evidence Act.
32. In this case, there is no such presumption of authenticity of ledger Ex.PW1/2(colly). Firstly, it is not carrying any authentication under Banker's Books Evidence Act. Secondly, PW1 has admitted during his cross examination that amount of Rs. 25,000/- paid in cash by the defendant is not reflected in ledger account, which proves that ledger was not being maintained by the plaintiff properly. If the statement of account/ ledger was not maintained properly, then it ought to be supported by some supporting material to authenticate entries of ledger. Plaintiff has supported ledger Ex.PW1/2 (colly) by invoices Ex.PW1/1 (colly), but the defendant has denied certain bills and the plaintiff has not supported any document regarding supply of material to authenticate such bills/ invoices. However, the defendant has not led any evidence to dispute his liability and never attempted to bring this dispute into the notice of the plaintiff at earliest, or on service of legal notice as well, due to these invoices could not be disputed.
33. Plaintiff has filed supporting bills of merely Rs. 5,01, 232/-, whereas ledger has proved entries of Rs. 9,18,381/- thereby meaning that all entries Digitally signed CS (Comm) No. 114/2024 DEVENDRA by DEVENDRA KUMAR Shree Marketings Vs. Khushal Enterprises KUMAR Date: 2025.07.30 22/24 16:17:49 +0530 are not proved by supporting documents in terms of law laid down by the abovesaid judgments. However, the defendant has admitted during cross examination that he has no proof that he ever paid any amount to the plaintiff in cash during the year 2020-21 but this admission of DW1 could not dispute the admission of the plaintiff in Para 15 of plaint and testimony of PW1 that the defendant also paid Rs. 25,000/- in cash and there is no entry in ledger Ex.PW1/2(colly). However, other entries could not be disputed. In fact, the plaintiff is entitled for recovery of suit amount of Rs. 3,40,381/-, subject to adjustment of Rs. 25,000/- of which adjustment was not given in ledger.
34. So far as issue no. 2 pertaining to interest against outstanding amount is concerned, admittedly transactions between the parties were commercial in nature and any deprivation of such dues carries interest. However, there was no fixed rate of interest regarding delayed payment but the plaintiff has claimed interest 18% per annum, which is not justified. However, the defendant has deprived the plaintiff from his legitimate dues, due to he is liable to pay some interest against outstanding amount. In fact, interest @ 9 % per annum against outstanding amount may serve purpose, accordingly the plaintiff shall be entitled for interest against outstanding amount from the date of due and till its realization. Plaintiff has discharged the onus to prove both the issues and both issues are decided in favor of the plaintiff and against the defendant.
35. Relief: Plaintiff has proved that he is entitled for recovery of due amount. However, amount of Rs. 25,000/- paid in cash by the defendant, as Digitally signed by DEVENDRA CS (Comm) No. 114/2024 DEVENDRA KUMAR Shree Marketings Vs. Khushal Enterprises 23/24 KUMAR Date:
2025.07.30 16:17:57 +0530 mentioned in Para 15 of plaint and duly acknowledged by PW1, has to be adjusted / set off. Accordingly, the plaintiff shall be entitled for decree of Rs. 3,15,381/- with interest @ 9% per annum w.e.f. 01.02.2021 till its realization along with cost of the suit. Decree Sheet be prepared accordingly. File be consigned to Record Room. Digitally signed by DEVENDRA DEVENDRA KUMAR KUMAR Date:
2025.07.30 ANNOUNCED IN OPEN COURT 16:18:05 +0530 ON 30th day of July, 2025 (DEVENDER KUMAR) District Judge (Commercial Court-01) East District Karkardooma Courts, Delhi CS (Comm) No. 114/2024 Shree Marketings Vs. Khushal Enterprises 24/24