Delhi District Court
Sh. O. P. Khandelwal Proprietor Of M/S ... vs Ravi Gupta Prop. Of M/S Shubh Steels And ... on 1 June, 2024
In the Court of Shri Ashutosh Kumar, District Judge (Commercial
Court)-01, Tis Hazari Courts, West District, Delhi
CS (Comm.) No. 93/2022
CNR No.DLWT01-000844-2022
Sh O.P. Khandelwal
Proprietor of :
M/s. Khandelwal Iron Store,
Having Office At:-
Y-186, Loha Mandi,
Naraina, New Delhi 110 028
Residing At:-
5, North End Road,
Civil Lines,
Delhi 110 054
....... Plaintiff
Versus
1. Ravi Gupta
Proprietor of:-
M/s. SHUBH Steels,
Operativng from
KNE-7, Gali No. 10,
Anand Parbat Industrial Area,
New Delhi 110 005
2. Nitin Gupta
S/o Ravi Gupta
Handler and Authorized Representative of :-
M/s. SHUBH Steels
Both defendants residing at:
Flat No. 102, Kalypso Tower (KT-2),
Sector 128, JP Wishtown,
Noida, UP.
........Defendants
CS (COMM.) No. 93/2022 OP Khandelwal Vs Ravi Gupta & Anr. Page No.1 of 38
Date of Institution : 04-02-2022
Date of hearing of arguments : 27-05-2024
Date of decision : 01-06-2024
Counsel for the plaintiff : Sh Vipul Sharma
Counsel for the Defendant : Sh Varun Dhingra
JUDGMENT
1. This is a suit filed by the plaintiff for recovery of amount of Rs.
43,24,315/- alongwith interest against the defendants.
2. Plaintiff's claim is that the subject matter of the suit being a Commercial Dispute as defined in section 2(1)(c) of the Commercial Courts, Commercial Division and Commercial Appellate Division of High Court Ordinance, 2015 and further that the recovery amount of the present suit is Rs. 43,24,315/-, along with pendente lite and future interest, which amount is more than Rs. 3,00,000/- and the same falls within the jurisdiction of this Court being Commercial Court.
3. It is further claimed that while commencing the business, defendant no. 1 represented himself to be proprietor of M/s Shubh Steels and defendant no. 2 represented himself as the main handler and financial care taker of the said firm and therefore both the defendants are jointly and severally liable to pay to the plaintiff. It is further claimed that the entire purchases were made by the defendants from plaintiff's office and all the supplies were made to the shop-cum-office of the defendants situated at KNE7, Gali No. 10, Anand Parbat Industrial Area, Delhi- 110005. It is CS (COMM.) No. 93/2022 OP Khandelwal Vs Ravi Gupta & Anr. Page No.2 of 38 also alleged that as per mandatory requirement, plaintiff before filing the present suit had filed the application for pre-litigation before the Delhi State Legal Service Authority (West), in which notice were issued on the defendants, which notices were served on them but defendants chose not to appear before the said Authority on two occasions and non starter report was issued on 28-10-2021.
4. Briefly stated the case of the plaintiff is that he being the proprietor is running a proprietorship concern under the name and style of M/s Khandelwal Iron Store having its office at Y-186, Loha Mandi, Naraina, New Delhi-110028, which is dealing with the business of trading with CR, CRCA Coils and other iron material and plaintiff from his vast business has earned an esteemed, impeccable image and business ethics on account of the premium quality of material to its customers. It is further stated that being a famous iron coil dealer in the market, plaintiff was approached by Defendant no. 2 Nitin Gupta, Shweta Gupta (wife of defendant no. 2) and Seema Gupta (mother of Defendant no. 2) in the mid of September 2017 with a business proposal of selling them CR Coils ad CRCA Coils (Iron and Steel material) to the partnership firm run by Seema and Shweta Gupta, under the name and style of M/s S.M. Steels and on the said representation, plaintiff started dealing with M/s S.M Steels and a running account was being maintained. It is further claimed that while CS (COMM.) No. 93/2022 OP Khandelwal Vs Ravi Gupta & Anr. Page No.3 of 38 making such representation, defendant no. 2 allured the plainitff that Seema and Shweta are partners of M/s S.M Steels operating from KNE-7, Gali No. 10, Anand Parbat Industrial Area, New Delhi-110005, dealing with their family business of manufacturing of Iron and Steel products at large scale and for that purpose they needed CR Coils and CRCA Coils from the plaintiff in bulk and also further represented that defendant no.2 and his wife Shweta Gupta are the main people handling and running the entire family business of iron and steel products with big buyers in the market. It is further claimed that thereafter in the mid of October 2017, defendants again approached the plaintiff and represented that defendant no. 1 is proprietor of the firm namely M/s Shubh Steels, operating from KNE7, Gali no. 10, Anand Parbat Industrial Area, Delhi-110005 dealing with the same business of iron and steel product manufacturing and represented the plaintiff to deal/do the business with the said firm on running account basis, as M/s Shubh Steels is the main firm of the family, which is in the control of Defendant no.1 & 2 and by making such representation, defendants allured and represented the plaintiff that all the dealings in the said firm are done with the name of the defendant no. 1 and all financial dealings are under the control of defendants no. 2 and Shweta Gupta (wife of defendant no.2) and while making such representations defendant nos. 1 and 2 showed the plaintiff high hopes of business up-
CS (COMM.) No. 93/2022 OP Khandelwal Vs Ravi Gupta & Anr. Page No.4 of 38 liftment and somehow allured the plaintiff to do the business with the said firm on running account basis without any condition of paying within 30 days of the purchases and as such plaintiff started dealing with the proprietorship firm of the defendants from October 2017 and that from October 2017 till June 2019 plaintiff did the business with defendants and supplied the goods (CR and CRCA Coils) at the shop cum office of the defendants, as and when demanded by the defendants, on running account basis, against proper invoices and charging proper and legal taxes and further that all the goods were supplied to defendants at their registered office at Anand Parbat Industrial Area, Delhi. It is further the case of the plaintiff that after sometime of the business with the defendants, defendants no. 2 approached the plaintiff and asked him not to charge GST from them and deliever the goods without taxes and further represented that he has high contacts with high Governmental officials in GST office, who will take care of everything and nothing will come under scrutiny about the sale made by the plaintiff which offer was immediately refused by the Plaintiff, being an honest and law abiding businessman and true and correct copy of the statement of accounts of the plaintiff dealing with the proprietary firm of the defendants M/s Shubh. Steels, duly certified by the Chartered accountant alongwith his certificate are annexed with the suit. It is further claimed that the majority of the business meetings and dealings for both the CS (COMM.) No. 93/2022 OP Khandelwal Vs Ravi Gupta & Anr. Page No.5 of 38 proprietary and partnership firm were done by the defendant no. 2 Nitin Gupta and his wife and defendants initially in order to win the trust of the plaintiff made petty purchases and cleared the payments with slight delay but soon after, defendants started placing big orders and also started delaying the payment and on being approached by the plaintiff for the payment, defendants always assured to clear the payment in some time. However, till November 2019 there was an outstanding of Rs. 43,74,315/- on the defendants, for dealing with M/s Shubh Steel, which is evident from the ledger/statement of account of Defendant. It is further the case of the plaintiff that plaintiff approached the defendant several times for balance consideration, but all in vain and plaintiff got nothing more then the false assurances to pay in future and as such, plaintiff was forced to issue a legal notice of demand of the balance consideration amount, to defendants on 01-11-2019 through his counsel and the defendants after receipt of the said legal notice, admitted their liability and pending dues towards the plaintiff, which is evident from their reply dated 20-11-2019 sent by the defendants through their counsel and after receipt of the legal notice, defendants made part payment of Rs.50,000/- in the present firm and also made payment of Rs. 3,00,000 in the partnership firm namely M/s S.M. Steel but till date the defendants owe a liability of Rs. 43,24,315 in M/s Shubh Steels and Rs. 1,61,299 in M/s S.M. Steels. It is also claimed that CS (COMM.) No. 93/2022 OP Khandelwal Vs Ravi Gupta & Anr. Page No.6 of 38 the liability of defendant no. 2 is evident from the whatsapp message sent by defendant no. 2 from his mobile bearing no. 9810047802 admitting that he has transferred money into the account of the plaintiff on behalf of M/s Shubh Steel and further the money so received from the defendant no. 2 was got transferred by him from his personal account and not from firm's account, evidencing the liability of defendant no. 2 qua the firm namely M/s. Shubh Steel. It is further claimed that for the remaining consideration amount of Rs. 43,24,315/-, defendants executed an MOU dated 18.01.2020 in the chamber of the counsel for the plaintiff, Sh. H. L. Dasi Advocate, Chamber no. Y-18, Lawyers Chambers, Civil Wing, Tis Hazari Courts, Delhi-110054, which meeting was also attended by both the defendants and their counsel Sh. Nikhil Bhardwaj Advocate, thereby admitting the liability and the said MOU was duly singed by defendant no.1 and witnessed by his counsel Sh. Nikhil Bhardwaj, Advocate in the presence of defendant no.2 and in pursuance to the said Memorandum of Understanding, defendant no.1 issued nine post dated Cheques in favour of plaintiff for a total sum of Rs. 43,24,315/-, details of which are as under:
S. No. Cheque No. Date Amount Bank
1 376875 25.03.2020 3,24,315 Deutsche Bank
2 376876 30.09.2020 5,00,000 Deutsche Bank
CS (COMM.) No. 93/2022 OP Khandelwal Vs Ravi Gupta & Anr. Page No.7 of 38
3 376877 30.12.2020 5,00,000 Deutsche Bank
4 376878 30.03.2021 5,00,000 Deutsche Bank
5 376879 30.06.2021 5,00,000 Deutsche Bank
6 376880 30.09.2021 5,00,000 Deutsche Bank
7 376881 30.12.2021 5,00,000 Deutsche Bank
8 376882 20.03.2022 5,00,000 Deutsche Bank
9 376883 25.03.2022 5,00,000 Deutsche Bank
5. It is also claimed that in the said meeting defendant no. 2 also got prepared one MOU qua M/S S.M. Steels, wherein defendant no. 2 signed as a witness and also got it signed from plaintiff and defendant no. 2 also assured the plaintiff that he will get it signed from the partners of M/s S.M. Steels and will give the cheque of the balance amount a day after and took the same back on the pretext of getting it signed and attested/notarized by Notary from the Courts but till date no MOU qua M/s S.M. Steel has been given by the defendants to the plaintiff with malafide intention.
6. It is further the case of the plaintiff that when the plaintiff presented the above mentioned postdated cheques issued by defendant no.1 for encashment on their scheduled dates, the same were dishonoured on presentation with remark of "Account Closed", for which the plaintiff has filed complaints under section 138 of the NI Act wherein the defendant no.1 has taken a stand of being severally ill and paralytic bed ridden patient from last one CS (COMM.) No. 93/2022 OP Khandelwal Vs Ravi Gupta & Anr. Page No.8 of 38 and a half year. It is also claimed that the defendants in order to evade from their liability and with malafide intentions to cheat the plaintiff, changed their old residence and shifted to Flat No. 102, Kalypso Tower (KT-2), Sector-128, J.P. Wishtown, Noida, UP, without informing the plaintiff with fraudulent intention. It is further claimed that finding no other alternative left with the plaintiff, plaintiff got issued a legal notice of demand on the defendants, thereby demanding to pay the consideration amount of Rs. 43,24,315 alongwith 18 % interest which was duly served on the defendant and the defendants even after receipt of the said legal notice, chose to remain numb and did not pay the admitted liability to the plaintiff, showing their malafide intention. It is further the claim of the plaintiff that the plaintiff issued the invoices in favour of the defendants at their office cum shop address at Anand Parbat, goods were sent at the official address of the defendants being KNE7, Gali No. 10, Anand Partab Industrial Area, New Delhi and defendants also carry on their business from KNE7, Gali No. 10, Anand Partab Industrial Area, New Delhi and hence as per section 20 of The Code of Civil Procedure, 1908, this Court has the jurisdiction to try, adjudicate and decide the present suit. It is further claimed that the value of the suit for the purposes of pecuniary jurisdiction has been fixed at Rs. 43,24,315/- and court fee stamp of Rs.45,000/- has been affixed on the plaint and plaintiff undertakes to pay the additional court fees on the interest CS (COMM.) No. 93/2022 OP Khandelwal Vs Ravi Gupta & Anr. Page No.9 of 38 so awarded by this Court. It is further claimed that the the suit is not barred by Limitation and the same has been filed within the period of limitation and with proper court fees.
7. Summons of the suit were sent to the defendants and appearance was duly made on their behalf. In written statement, defendants in its preliminary objections inter-alia claimed that the suit is not maintainable as plaintiff has not come with clean hands and suppressed the true and real facts, the suit is liable to be dismissed under the provisions of order VII Rule 11 of CPC, the suit is barred by law of limitation, the suit is liable to be dismissed as the plaintiff has not deposited the deficient court fees, the suit is liable to be dismissed as the present suit is not valued as per Valuation of Suit Act, the invoices attached do not bear any acknowledgments and further that the plaintiff never returned the nine post dated cheques to the defendant despite several requests, which were issued by the defendants to the plaintiff for security purposes and infact all the cheques were issued under pressure, coercion and threats and further the agreement was not signed by the defendants.
8. On merits, defendants have denied para no. 1 of the plaint qua having any business / commercial transactions with the plaintiff and any liability for a sum of Rs. 43,24,315/- towards the plaintiff. Defendants have admitted that while commencing the business between the parties. defendant no. 1 represented himself as the CS (COMM.) No. 93/2022 OP Khandelwal Vs Ravi Gupta & Anr. Page No.10 of 38 proprietor of M/s. Shubh Steels but denied that defendant no. 2 represented himself as the main handler and financial care taken of the said firm and denied that both the defendants were jointly and severally liable to pay to the plaintiff and further denied that entire purchases were made by the defendants from their office and all the supplies were made to the shop cum office of the defendants situated at KNE7, Gali No. 10, Anand Parbat Industrial Area, Delhi- 110005. Defendants in their written statement denied in general the contents of para nos. 3 to 17 of the plaint. Defendants have denied that the plaintiff is entitled to any relief claimed by him by way of present suit and prayed for dismissal of the suit in their favour and against the plaintiff with an exemplary cost.
9. Plaintiff did not choose to file replication to the written statement filed by the defendants.
10.From the pleadings of the parties, following issues were framed vide order dated 17-10-2022:-
1. Whether the plaintiff is entitled to recovery of Rs. 43,24,315/- alongwith interest from the defendant as alleged? OPP
2. Whether the plaintiff has concealed material facts? OPD
3. Whether the suit is barred by limitation? OPD
4. Whether the suit is not properly valued for the purposes of court fees and jurisdiction? OPD
5. Relief.
CS (COMM.) No. 93/2022 OP Khandelwal Vs Ravi Gupta & Anr. Page No.11 of 38
11.Plaintiff has examined two witnesses viz PW-1 O.P Khandelwal who is the plaintiff and proprietor of M/s. Khandelwal Iron Store and PW-2 Sorabh Sahaney who is son in law of plaintiff OP Khandelwal and thereafter closed his evidence. Defendants have examined two witnesses, namely, Sh Nitin Gupta as DW-1 and Sh Ravi Gupta, proprietor of M/s. Shubh Steels as DW-2 and closed their evidence.
12.PW-1 OP Khandelwal tendered his affidavit of evidence Ex. PW-
1/A and relied upon following documents:-
1. Present suit for recovery - Ex. PW-1/1
2. Non-starter report dated 28-10-2021 - Ex. PW-1/2
3. Statement of account - Ex. PW-1/5
4. Memorandum of Understanding dated 18-01-2020 - Ex. PW-1/6
5. Certificate under section 65 B of Indian Evidence Act - Ex. PW-1/7
6. GST returns of the defendant M/s. Shubh Steels downloaded from official website of GST- Ex. PW-1/8
7. True and correct copy of tracking report of the notices sent to defendants - Ex. PW-1/9
8. Legal notice dated 2-11-2019 - Ex. P-1
9. Reply dated 20-11-2019 to the legal notice by the defendant - Ex P-2.
10. Cheques issued by defendant no. 1 - Ex. P-3
11. Medical records of defendant no. 1 - Ex. P-4
12. GST returns of the defendant - Ex. P-5
13. Whatsapp message sent by defendant no. 2 - Mark C
14. Return memos of the cheques - Mark E
15. Notice dated 16-12-2021 - Mark G
16. Pan Card of the plaintiff - Mark X
17. Ledger of M/s. SMS Steel - Mark Y CS (COMM.) No. 93/2022 OP Khandelwal Vs Ravi Gupta & Anr. Page No.12 of 38 He was cross-examined by the Ld Counsel for the defendants.
13.PW-2 Sorabh Sahaney tendered his affidavit of evidence Ex. PW-
2/A and relied upon already exhibited documents Ex. PW-1/1. Ex. PW-1/2, Ex. PW-1/5 to Ex. PW-1/9 and Mark A and D and also on documents Ex P-1 and Ex. P-2. PW-2 is one of the purported witness to MOU dated 18-01-2020 Ex. PW-1/6. He was also cross-examined by the Ld Counsel for the defendants.
14.DW-1 Nitin Gupta tendered his affidavit of evidence Ex. PW-1/A in examination-in-chief, cross-examined and discharged. DW-2 Ravi Gupta who is proprietor of M/s. Shubh Steels was examined through Local Commissioner as per the order dated 15-05-2023 of this court and was cross-examined by the Ld Counsel for the plaintiff.
15.I have heard the Ld. Counsel for the parties, perused the brief written submissions filed by the parties and have also gone through the case file.
16.My issue-wise findings are as follows:-
ISSUE Nos. 1& 2"1. Whether the plaintiff is entitled to recovery of Rs. 43,24,315/- alongwith interest from the defendant as alleged? OPP
2. Whether the plaintiff has concealed material facts? OPD"
Since these issues are inter-connected and therefore are being disposed of together.
CS (COMM.) No. 93/2022 OP Khandelwal Vs Ravi Gupta & Anr. Page No.13 of 38
17.The onus to prove issue no. 1 was on the plaintiff and onus to prove issue no. 2 was on the defendants.
18.In his affidavit of evidence Ex. PW-1/A, PW-1 who is the plaintiff in the present suit, has deposed about having commercial business transactions with the defendants from October, 2017 to June, 2019 qua which a running account was being maintained and also proved the attested statement of account Ex.PW-1/5 vide which there was an outstanding amount of Rs. 43,74,315/- as on 01-11- 2019 to be paid by the defendants.
19.In this context, reliance may be placed upon the judgment titled as Haryana Medical Hall and Ors Vs Dr Roshanlal Aggarwal and Sons Pvt Ltd. RFA (COMM) 296/2023, CM Nos. 64747/2023 and 64748/2023, relevant para of which is reproduced as under:-
"16....... We are of the view that the respondent had duly proved that the statement of accounts was maintained in the normal course of business and had reflected a balance of 28,80,487/- as outstanding and payable by the appellants."
20.PW-1 has further deposed that qua the said dues, legal notice dated 2-11-2019 Ex. P-1 was sent, which document was admitted by the defendants during admission / denial proceedings. In reply dated 20-11-2019 Ex. P-2 sent by defendant no.1, inter alia, it was stated that "My client needs some duration to clear all the actual pending dues. My client wants to organize a meeting with your client so that they can fix that where and when my client should pay the due amount." Ld Counsel for the plaintiff stated that vide CS (COMM.) No. 93/2022 OP Khandelwal Vs Ravi Gupta & Anr. Page No.14 of 38 the said reply Ex. P-2 of defendant no. 1, which is an admitted document by the defendants, the defendant no. 1 had claimed that he was ready to pay the actual dues and requested for a meeting to finalize the schedule for payment of the actual amount due without interest to the plaintiff and further that to show his bonafide defendants initially transferred Rs. 50,000/- in the plaintiff's account on 13-12-2019 prior to the meeting, which transactions is duly reflected in the statement of account Ex. PW- 1/5.
21.Ld Counsel for the plaintiff had further argued that from the testimony of PW-1 & PW-2, it stands proved that for the remaining amount of Rs. 43,24,315/-, defendant no. 1 executed a Memorandum of Understanding Ex. PW-1/6 (OS&R) dated 18- 01-2020 in Chamber No. Y-18, Civil Wing, Tis Hazari Courts of H. L. Dasi, Plaintiff's Counsel, which was duly signed by plaintiff, defendant no. 1 and witnessed by PW-2 Sorabh Sahney and Sh Nikhil Bhardwaj Advocate on behalf of defendants, the MOU was notorized and in terms of the said MOU, aforesaid nine post dated cheques for total sum due of Rs. 43,24,315/-, were handed over by defendant no. 1 to the plaintiff since an amount of Rs. 50,000/- was already received by the plaintiff from the defendants on 13-12-2019. Ld Counsel for the plaintiff has claimed that the said post dated cheques Ex. P-3, were dis- honoured vide return memos Mark E for the reasons "account CS (COMM.) No. 93/2022 OP Khandelwal Vs Ravi Gupta & Anr. Page No.15 of 38 closed", whereupon the plaintiff issued legal notice of demand dated 16-12-2021 Mark G (postal receipts Ex PW-1/9) vide which plaintiff demanded outstanding amount of Rs. 43,24,315/- alongwith interest @ 18% p.a., to which no reply of defendants was received.
22.On the other hand, Ld Counsel for the defendants had denied delivery of goods as no invoices or e-way bills have been filed by the plaintiff in support thereof and further claimed that nine PDCs on behalf of defendant no. 1 were issued under pressure and threat of the plaintiff and further PDCs were issued as security and no signatures were done by defendant no. 1 or by anyone authorized on their behalf on the MOU. Ld Counsel for the defendants had also stated that that non-filing of invoices for proving delivery of goods, is fatal to the case of the plaintiff and PW-1 himself had admitted in his cross-examination that he did not file any invoices on record. Ld Counsel for the plaintiff had stated that facts admitted need not be proved and vide its reply dated 20-11-2019 Ex. P-2 to the legal notice of the plaintiff, the defendants admitted their liability, so plaintiff was not required to file the invoices. The factum of receiving of notice Ex. P-1 by defendant no. 1 stands established from the reply Ex. P-2 to the same by defendant no. 1 and from the contents of the said reply it is clear that the defendant no. 1 has admitted that there was actual pending dues of the defendants towards the plaintiff but the defendant no.
CS (COMM.) No. 93/2022 OP Khandelwal Vs Ravi Gupta & Anr. Page No.16 of 38 1 has not clearly admitted the contents of the legal notice dated 02-11-2019 of the plaintiff or the actual total amount due against him but the defendant no. 1 has also not specified as to what was the amount due against him.
23.Ld counsel for the plaintiff had stated that as defendant no. 1 vide its reply dated 20-11-2019 Ex. P-2, had not specifically denied the contents of the legal notice Ex. P-1 of the plaintiff qua delivery of goods and his liability of Rs. 47,03,846.50, therefore adverse presumption has be drawn against defendant no. 1. There is some force in the said argument.
24.Ld Counsel for the plaintiff also drew my attention to the cross-
examination of DW2 Ravi Gupta dated 4-08-2023, wherein he has stated that he used to place orders over the phone or physically go to the shop of the plaintiff and also admitted that his son Nitin Gupta used to handle the dealings of the firm M/s. Shubh Steels. DW-2 has also admitted that he does not remember the exact number of dealings with the plaintiff between the year 2017-2019. DW-2 also stated that he does not remember whether he has claimed the input credit qua the GST paid by the plaintiff on the goods supplied. He also stated that he does not remember if he had appointed Sh Nikhil Bhardwaj, Advocate as his counsel, who had sent the reply dated 20-11-2019 Ex. P-2 on behalf of the defendants. DW-2 also stated that he cannot comment on Ex. P-2 as he was ill during the said period. DW-2 also admitted that CS (COMM.) No. 93/2022 OP Khandelwal Vs Ravi Gupta & Anr. Page No.17 of 38 content of para no. 8 of his affidavit of evidence, is incorrect qua non-receiving any material from the plaintiff from October, 2017 to June, 2019. DW-2 had admitted that he had received the goods from the plaintiff during the said period. Ld Counsel for the plaintiff has argued that from the said part of the cross- examination of DW-2, it can safely be inferred that the defendant no. 1 has admitted that goods were supplied by the plaintiff to the defendants during the said period whereas Ld Counsel for the defendants had claimed that defendants had merely denied that no goods were supplied during the said period. There is substance in the said argument of Ld Counsel for the plaintiff.
25.Another argument made by Ld Counsel for the defendant is that defendants had made payments to the plaintiff in cash but during his cross-examination DW-1 Nitin Gupta stated he does not remember the exact year when the payments were made. Ld Counsel for the plaintiff argued that though it is claimed by the defendants that they had made payments in cash and had settled the accounts of the plaintiff but defendants failed to bring on record any receipt qua the same and also did not file their statement of accounts / balance sheet / returns showing such payments made by them and the details thereof. Ld Counsel for the plaintiff has drawn my attention to cross-examination of DW-2 Ravi Gupta wherein he has specifically stated that "he had the business dealing with the plaintiff from the year 2017 to 2019"
CS (COMM.) No. 93/2022 OP Khandelwal Vs Ravi Gupta & Anr. Page No.18 of 38 and further stated that "the accounts of the plaintiff was settled as the payments were also made in cash". In his further cross- examination, he admitted that he does not remember whether he had shown any due / balance towards the plaintiff in his books / returns but voluntarily stated that most of the dealings with the plaintiff were in cash and the accounts between the parties were settled. DW-2 denied the suggestion in his cross-examination that no cash payment were made by the defendants to the plaintiff. The above is contradictory to the defence taken by the defendants while cross-examining PW1 and PW2, wherein suggestions were given that no material was purchased by the defendants.
26.Yet another objection taken by the defendants during arguments is that the plaintiff has not filed any certificate u/o XI Rule 6 (3) CPC to support his statement of account Ex. PW-1/5, to which Ld Counsel for the plaintiff had stated that statement of account Ex. PW-1/5, is duly supported with certificate under section 65 B of Indian Evidence Act Ex. PW-1/7. Ld counsel for the defendants also stated that notice for pre-litigation mediation does not contain the address of the defendants and the notice was not duly served upon the defendants and the pre-institution mediation proceedings were not held as per law, to which Ld Counsel for the plaintiff had stated at bar that the same addresses of the defendants were mentioned in both the proceedings including the present suit and notices of the said proceedings were issued to the defendants, CS (COMM.) No. 93/2022 OP Khandelwal Vs Ravi Gupta & Anr. Page No.19 of 38 which is reflected from the non-starter report Ex.PW-1/2.
27.Qua the MOU Ex. PW-1/6 vide which the defendants purportedly had issued nine post dated cheques for the outstanding amount, Ld Counsel for the defendants had argued that those cheques were security cheques and PW-1 had also admitted in his cross- examination that "it is correct that we take the advance security cheques from some of our the customers but it depends on customer to customer". Ld Counsel for the defendants had further submitted that signatures of the defendant no. 1 were obtained by the plaintiff on blank papers, which were misused and the said MOU does not contain the actual signatures of defendant no. 1 as party to the MOU and his advocate Sh Nikhil Bhardwaj, as witness and their signatures on the said MOU were forged. Ld Counsel for the plaintiff had drawn my attention to cross- examination of PW-1 qua suggestion given to PW-1 that said PDCs were given by defendant no. 1 to the plaintiff at the time of commencement of the business as security between the parties whereas it appears from the cross-examination dated 04-08-2023 of DW-1 that his claim was that the said cheques were given as security and blank papers were signed by defendant no. 1 under pressure and threat and were given in the chamber of Ld Counsel for the plaintiff in the year 2019-2020. In his cross-examination, DW-2 Ravi Gupta clearly stated that the cheques were given in the Chamber of the Counsel for the plaintiff in the year 2019 to CS (COMM.) No. 93/2022 OP Khandelwal Vs Ravi Gupta & Anr. Page No.20 of 38 2020 while signing blank pages and not at the starting of the business. Admittedly, in reply Ex. P-2, the defendants have nowhere claimed that any such cheques signed in blank were given by them as security either at the time of commencement of business or the same were issued under pressure and threat in the year 2019-2020. DW-2 in cross-examination has further stated that he had made a complaint in the PS Naraina Vihar, without disclosing the date, month and year and admittedly the said complaint was not filed or proved on record.
28.During cross-examination, DW 2 Ravi Gupta was given a suggestion that how he had signed just before his name in the MOU Ex. PW-1/6, to which he stated that " I have signed on document in blank which has been misused by the plaintiff in best convenient manner". Thus, DW-2 (defendant no. 1) had admitted his signatures on the same. Perusal of the MOU reveals that defendant had signed just above his name. Ld Counsel for the plaintiff had stated that from first page of MOU Ex. PW-1/6 (running page no. 51), which is a non-judicial stamp paper, it can be seen that the said document could not have been signed in blank by the defendant and further at page no. 55 the DW-2 had signed just above the "second party". Defendants also did not examine Mr Nikhil Bhardwaj, Advocate, who is the purported witness to the MOU Ex. PW-1/6 on behalf of the defendants and had earlier sent the reply Ex.P-2 on behalf of the defendants.
CS (COMM.) No. 93/2022 OP Khandelwal Vs Ravi Gupta & Anr. Page No.21 of 38
29.Ld Counsel for the plaintiff had drawn my attention to purported statement of account Ex. DW-1/1 of the defendant no. 1, which bears the official stamp of the defendant no. 1, to submit that DW- 2 Ravi Gupta in his cross-examination had admitted the said document and as per the same the closing balance was Rs. 44,14,315/- as on October, 2019 and thus the DW-2 had admitted the said liability of defendant no. 1 towards plaintiff. He had further submitted that thereafter defendant no. 1 had paid a sum of Rs. 40,000/- by NEFT on 22-10-2019 and Rs. 50,000/- on 13-12-2019 to the plaintiff and as such after deducting the said payments, the outstanding amount due against the defendant no. 1 is Rs. 43,24,315/-, which is the principal amount.
30.Ld Counsel for the defendants argued that document Ex. DW-1/1 could not have been put to the witness at the time of cross- examination of DW-2 as the same was neither mentioned in the plaint nor filed alongwith the plaint.
31.In this context, Ld Counsel for the plaintiff has relied upon certain judgments, relevant paragraphs of which are reproduced as hereunder:
(1) Mohammed Abdul Wahid Vs. Nilofer & Ors,.
MANU/SC/123/2023 of Hon'ble Supreme Court of India decided on 14-12-2023 "32. In light of the above discussion, and the answer in the negative to the first question before this court, meaning thereby CS (COMM.) No. 93/2022 OP Khandelwal Vs Ravi Gupta & Anr. Page No.22 of 38 that there is no difference between a party to a suit as a witness and a witness simpliciter- the second issue in this appeal, in view of the provisions noticed above, production of documents for both a party to the suit and a witness as the case may be, at the stage of cross-examination, is permissible within law". (2) Rakesh Kumar Vs Pawan Khanna CM(M) 630/2015 of the Hon'ble High Court of Delhi decided on 29-07-2015:
10. The question as to whether the documents not filed earlier if confronted to the witness during his cross examination and denied by him, can be proved at the stage of his own evidence, came up for consideration before this Court in the decision reported as Subhash Chander vs. Shri Bhagwan Yadav 2010 VI AD Delhi 96 wherein following questions were framed and answered as under:-
"1. This petition raises questions of general importance, arising frequently in trials. The questions can be framed thus:-
(i) What is the challenge/fate of the documents produced for the first time during the cross examination of a witness and which are denied by the witness? Whether the said documents are required to be retained / kept on the court file or merely because the witness has denied the document, the same has to be returned to the party which has produced the same?
(ii) If the said documents are to be kept on record/retained, what is the status thereof?
(iii) Whether a party producing the said document can prove the same at the stage of his own evidence or for the reason of having not produced it along with its plaint / written statement and having chosen to use it only during cross examination, is then barred from treating the document as own document and proving the same? Since I am unable to find any judgment completely CS (COMM.) No. 93/2022 OP Khandelwal Vs Ravi Gupta & Anr. Page No.23 of 38 considering the aspects and further since in my opinion these questions plague the courts on a daily basis, it is deemed appropriate to answer the same.
xxx xxx xxx
8. Order 7 Rule 14(4), Order 8 Rule 1 (A) (4), as well as Order 13 Rule 1(3) provide that the provisions requiring parties to file documents along with their pleadings and/or before the settlement of issues do not apply to documents produced for the cross examination of the witnesses of the other party. To the same effect, Section 145 of the Evidence Act also permits documents to be put to the witnesses, though it does not provide whether such documents should be already on the court record or can be produced / shown for the first time. However, in view of the unambiguous provisions of the CPC, it cannot be held that the document cannot be produced/shown for the first time during cross examination. If the witness to whom the said document is put, identifies his handwriting / signature or any writing / signatures of any other person on the said document or otherwise admits the said documents, the same poses no problem, because then the document stands admitted into evidence. However, the question arises as to what is the course to be followed if the witness denies the said document. Is the document to be kept on the court file or to be returned to the party producing the same?
XXXXXXXXX
11. The legislative intent behind order 7 Rule 14(4) and Order 8 Rule 1A (4) and Order 13 Rule 1(3) appears to be to permit an element of surprise, which is very important in the cross examination of witnesses. A litigant may well be of the opinion that if the document on the basis whereof he seeks to demolish the case of the adversary is filed on the court record along with pleadings or before framing of issues, with resultant knowledge to the adversary, the adversary may come prepared with his replies CS (COMM.) No. 93/2022 OP Khandelwal Vs Ravi Gupta & Anr. Page No.24 of 38 thereto. On the contrary, if permitted to show/produce the document owing to element of surprise, the adversary or witness, may blurt out the truth. Once it is held that a litigant is entitled to such right, in my view it would be too harsh to make the same subject to the condition that the litigant would thereafter be deprived of the right to prove the said documents himself. Thus, if the witness to whom the document is put in cross examination fails to admit the document, the party so putting the document, in its own evidence would be entitled to prove the same. However, the same should not be understood as laying down that such party for the said reason and to prove the said document would be entitled to lead evidence which otherwise it is not entitled to as per scheme of CPC and evidence law. For instance, if the document is shown by the defendant to the plaintiff's witness and the plaintiff's witness denies the same, the defendant can prove the document in his own evidence. Conversely, if the plaintiff puts the document to the defendant's witness and the defendant's witness denies the same, the plaintiff if entitled to lead rebuttal evidence would in his rebuttal evidence be entitled to prove the same. However, if the plaintiff has no right of rebuttal evidence in a particular case, the plaintiff would not be entitled to another chance to prove the document. In such a case, the plaintiff has to make a choice of either relying upon the surprise element in showing the document or to file the document along with its pleadings and/or before the settlement of issues and to prove the same. Similarly, if the defendant chooses to confront the document to the plaintiff's witness in rebuttal, merely because the witness denies the document would not entitle the defendant to a chance to prove the document subsequently.
12. I may however put a line of caution over here. It is often found that a party which has otherwise failed to file documents at the appropriate stage, attempts to smuggle in the documents in the evidence of the witness of the adversary by putting the documents to the witness whether relevant to that witness or not. The court CS (COMM.) No. 93/2022 OP Khandelwal Vs Ravi Gupta & Anr. Page No.25 of 38 should be cautious in this regard. Only those documents with which the witness is concerned and/or expected to know or answer ought to be permitted to be put to the witness in the cross examination. If other documents with which the witness is not concerned are confronted only in an attempt to have the same filed and to thereafter prove the same, the court would be justified in clarifying that the document is taken on record only for the purpose of cross examination and the producing party would not be entitled to otherwise prove the same, having not filed it at the appropriate stage."
11. The case of the petitioner has been examined in the light of above legal position. The petitioner/tenant has a right to cross examine the respondent/landlord and being not precluded from confronting the witness in cross examination with the documents which are not on record, the impugned order hardly causes any prejudice to the petitioner. What will be the effect of denial of such documents by the witness which have been confronted with during the cross examination, stands answered in Subhash Chander's case (supra).
(3) Bhag Singh Gambhir & Ors. Vs. Rama Arora MANU/DE/2390/2022 of the Hon'ble High Court of Delhi decided on 08-07-2022
9. The Hon'ble Supreme Court in the case of Sugandhi (dead) by LRs & Anr. vs. P. Rajkumar, Rep. by his Power Agent Imam Oli reported as (2020) 10 SCC 706 has held as follows:
"9. It is often said that procedure is the handmaid of justice. Procedural and technical hurdles shall not be allowed to come in the way of the court while doing substantial justice. If the procedural violation does not seriously cause prejudice to the adversary party, courts must lean towards doing substantial justice rather than relying upon procedural and technical violation. We should not forget the fact that litigation is CS (COMM.) No. 93/2022 OP Khandelwal Vs Ravi Gupta & Anr. Page No.26 of 38 nothing but a journey towards truth which is the foundation of justice and the court is required to take appropriate steps to thrash out the underlying truth in every dispute. Therefore, the court should take a lenient view when an application is made for production of the documents under subrule (3)."
10. In the present case, during the course of evidence of the witness of the defendant, DW1, the counsel for the plaintiffs presented the 'returned envelopes' in front of the witness to verify the addresses therein. However, the Local Commissioner refused to entertain and put those 'returned envelopes' on record. This is unjustifiable. In view of the provisions of CPC, a document can be produced/ shown for the first time during cross-examination. If the document produced during cross-examination of a witness is admitted or denied by the said witness, in either case the document cannot be returned and has to be necessarily placed on the Court file.
11. This Court in the case of Subhash Chander vs. Shri Bhagwan Yadav, 2009 SCC OnLine Del 3818, held as follows:
"8. Order 7 Rule 14(4), Order 8 Rule 1 (A) (4), as well as Order 13 Rule 1(3) provide that the provisions requiring parties to file documents along with their pleadings and/or before the settlement of issues do not apply to documents produced for the cross examination of the witnesses of the other party. To the same effect, Section 145 of the Evidence Act also permits documents to be put to the witnesses, though it does not provide whether such documents should be already on the court record or can be produced / shown for the first time. However, in view of the unambiguous provisions of the CPC, it cannot be held that the document cannot be produced/shown for the first time during cross examination. If the witness to whom the said document is put, identifies his handwriting / signature or any writing / signatures of any other person on the said document or otherwise admits the said CS (COMM.) No. 93/2022 OP Khandelwal Vs Ravi Gupta & Anr. Page No.27 of 38 documents, the same poses no problem, because then the document stands admitted into evidence. However, the question arises as to what is the course to be followed if the witness denies the said document. Is the document to be kept on the court file or to be returned to the party producing the same?
9. This question also in my view is also not difficult to answer. It cannot possibly be said that the document should be returned to the party. If the document is so returned it will not be possible for the court to at a subsequent stage consider as to what was the document put and what was denied by the witness. In a given case, it is possible that the answer of the witness on being confronted with the document may not be unambiguous. It may still be open to the court to consider whether on the basis of the said answer of the witness, the document stands admitted or proved or not and/or what is the effect to be given to the said answer. Thus, the document cannot be returned and has to be necessarily placed on the court file.
10. The next question which arises is that if the document is so placed on the court file, whether it becomes / is to be treated as the document of the party producing the same and is that party entitled to prove the said document notwithstanding having not filed the same earlier, as required by law, or the use of the said document is to be confined only to confront the witness to whom it was put and it cannot be permitted to be proved by that party in its own evidence.
11. The legislative intent behind order 7 Rule 14(4) and Order 8 Rule 1A (4) and Order 13 Rule 1(3) appears to be to permit an element of surprise, which is very important in the cross examination of witnesses. A litigant may well be of the opinion that if the document on the basis whereof he seeks to demolish the case of the adversary is filed on the court record along with pleadings or before framing of issues, with resultant knowledge to the adversary, the adversary may come prepared with his replies CS (COMM.) No. 93/2022 OP Khandelwal Vs Ravi Gupta & Anr. Page No.28 of 38 thereto. On the contrary, if permitted to show/produce the document owing to element of surprise, the adversary or witness, may blurt out the truth. Once it is held that a litigant is entitled to such right, in my view it would be too harsh to make the same subject to the condition that the litigant would thereafter be deprived of the right to prove the said documents himself. Thus, if the witness to whom the document is put in cross examination fails to admit the document, the party so putting the document, in its own evidence would be entitled to prove the same. However, the same should not be understood as laying down that such party for the said reason and to prove the said document would be entitled to lead evidence which otherwise it is not entitled to as per scheme of CPC and evidence law. For instance, if the document is shown by the defendant to the plaintiff‟s witness and the plaintiff‟s witness denies the same, the defendant can prove the document in his own evidence. Conversely, if the plaintiff puts the document to the defendant‟s witness and the defendant‟s witness denies the same, the plaintiff if entitled to lead rebuttal evidence would in his rebuttal evidence be entitled to prove the same. However, if the plaintiff has no right of rebuttal evidence in a particular case, the plaintiff would not be entitled to another chance to prove the document. In such a case, the plaintiff has to make a choice of either relying upon the surprise element in showing the document or to file the document along with its pleadings and/or before the settlement of issues and to prove the same. Similarly, if the defendant chooses to confront the document to the plaintiff‟s witness in rebuttal, merely because the witness denies the document would not entitle the defendant to a chance to prove the document subsequently."
12. It would also be fruitful to refer to the judgment of Bombay High Court in the case of Pandharinath Laxman Bhandari vs. Shri Bharti Trimbak Bhandari, 2021 SCC OnLine Bom 447, wherein it was held as follows:
CS (COMM.) No. 93/2022 OP Khandelwal Vs Ravi Gupta & Anr. Page No.29 of 38 "6. Heard. Learned Counsel for the parties. Question arising for consideration; are a. Whether scheme of Code of Civil Procedure, 1908 (CPC for short) interdicts, the parties to the suit from confronting the witness of adverse party with a document, not on the Courts‟ record, but shown or produced to the witness for the first time in his cross-examination ? b.
The next question is: the party, which has otherwise failed to file documents at appropriate stage could be permitted to bring on record the document through evidence of the witness of adversary by putting or confronting him with such document?
7. The main object of the cross-examination is to bring out the falsity and to find out the truth and further to weaken qualify or destroy the case of Opponent and to establish the own case through Opponents‟ witness. Thus objects are to impeach the accuracy, credibility and general value of the evidence given in-chief, to sift the facts already stated by the witness, to detect and expose discrepancies or to illicit suppressed act, which will support the case of cross-examining party. The exercise of this right is regarded and one of the most efficacious for recovery of truth. Provisions of Section 137 of the Indian Evidence Act, 1872 empowers and Section 146 to 150, regulates cross examination of witness. Confronting witness, with a document is permissible to test veracity of witness; under Section 146 of the Evidence Act. Though the range of cross-examination is unlimited, it must relate to relevant facts. Thus „relevancy of document‟, to which witness is confronted with, is a essential condition. (Emphasis supplied)
8. Thus, to be stated that the provisions of Order-7 Rule- 14(4), Order-8 Rule-1 (A)(4) and Order-13 Rule-3(a) of the CPC are exceptions to the Rules, regulating the production of documents by the Plaintiffs and Defendants alongwith the plaint and written statement. To achieve the desired result. While witness of adverse party is examined, if the party to the suit is not permitted to confront the witness with a document, which has not been produced with the pleadings, adverse party CS (COMM.) No. 93/2022 OP Khandelwal Vs Ravi Gupta & Anr. Page No.30 of 38 cannot test the veracity or impeach the credit of the witness. Thus, the legislation in its wisdom carved out aforesaid exceptions. Thus, in view of explicit provisions of CPC, it cannot be held that the document cannot be produced or shown, for the first time to the witness during the cross- examination, though it was not produced with the pleadings. The first question is answered accordingly."
32.Since the defendant no. 1 had admitted document Ex. DW-1/1, therefore it is clear that the said document was of defendant no. 1 and further that plaintiff has not come up with a new case and had only put the said document to DW-2 in his cross-examination, it cannot be said that defendants were prejudiced in any manner or that the said document could not have been put to the witness in his cross-examination. Admittedly, the Ld Counsel for the defendant had not been able to cite any contradictory judgment or to show any provision vide which the said document could not have been put to the said witness.
33.In view of the discussion in the preceding paragraphs and the aforesaid cited judgment, I find force in the submissions of the Ld Counsel for the plaintiff and hence the plaintiff was well within his rights to put the said document i.e. purported statement of account between the parties furnished by the defendant no. 1 to the plaintiff and the said document being admitted by the defendant no. 1 in his cross-examination.
34.PW-1 and PW-2 have categorically deposed about the execution of the said MOU bearing signatures of PW-1 and DW-2 Ravi CS (COMM.) No. 93/2022 OP Khandelwal Vs Ravi Gupta & Anr. Page No.31 of 38 Gupta as parties and signatures of PW-2 and Mr Nikhil Bhardwaj as witnesses thereof. Furthermore, the defendants have admittedly not examined Mr Nikhil Bhardwaj, Advocate who is the purported witness to the MOU Ex. PW-1/6, on behalf of the defendants qua denying his signatures on the said MOU and it was upon the defendant to examine the said witness and from the failure to do so, it can be inferred that the plea taken by the defendant qua non- signing of the said document as witness by the said Advocate is a false plea.
35.Furthermore, DW-1 in his cross-examination has admitted his ledger Ex. DW-1/1, which shows liability of Rs. 44,14,315/- of the defendant no. 1 towards the plaintiff as on October, 2019. Thus it stands established that defendant no. 1 owed a sum of Rs. 43,24,315/- qua which the purported MOU Ex.PW-1/6 between the parties was executed bearing the signature of plaintiff and defendant no. 1 and in terms of the said MOU Ex. PW-1/6, aforesaid nine post dated cheques were issued by defendant no. 1 in favour of plaintiff which got bounced due to reason "account closed". Also the defendants had not given any reply to the legal notice of demand dated 16-12-2021 Mark G which was sent through speed post (postal receipts being Ex. PW-1/9) at the last known correct address of defendant no. 1 therefore it has to be presumed as per section 27 of the General Clauses Act, 1897 and section 114 of Indian Evidence Act, 1872 that the said legal notice CS (COMM.) No. 93/2022 OP Khandelwal Vs Ravi Gupta & Anr. Page No.32 of 38 of demand was deemed to be served upon defendant no. 1 and inspite of deemed service of legal notice of demand, the defendant no. 1 admittedly did not give any reply thereto, therefore adverse presumption has to be drawn against defendant no. 1. The defendants have not been able to prove any positive evidence or could extract any material in the cross-examination of plaintiff's witnesses to substantiate its plea qua suppression of material facts by the plaintiff.
36.There is inherent contradictions in the case of the defendants on many points. First of all from the denial stand of the defendants in para no. 1 of their written statement qua the contents of plaint, it appears that the defendants have denied the transactions between the parties whereas from the cross-examination of DW-1 and DW-2, it appears that the stand of the defendants is that the said transactions took place but the defendants had made payment qua the same to the plaintiff in cash. Admittedly, no such payments receipts or any other document to prove the said payments have been produced or proved.
37.Furthermore in the written statement the defendants have merely taken a stand that cheques duly signed on behalf of defendant no. 1 were given to the plaintiff as security cheques at the commencement of the business in the year 2017 whereas from the cross-examination of DW-1 & DW-2 it appears that it is their stand that the said cheques were given under pressure and threat CS (COMM.) No. 93/2022 OP Khandelwal Vs Ravi Gupta & Anr. Page No.33 of 38 of the plaintiff in the year 2019-2020 in the chamber of Ld Counsel for the plaintiff alongwith handing over of the signed blank pages to the plaintiff at that time. The plea of signing the blank pages by defendant no. 1 is beyond their pleadings and appears to be an after thought. Also defendant no. 1 had not produced or proved on record any complaint to any authority including police qua purported misuse of the said cheques or document signed by him in blank and purportedly misused by the plaintiff. Furthermore at one place the defendants have denied the MOU but on the other hand DW-2 (defendant no. 1) has admitted his signatures on the same. Defendants also failed to examine Mr Nikhil Bhardwaj, Advocate who is the purported witness to the MOU Ex. PW-1/6 on behalf of the defendants. Furthermore Nikhil Bhardwaj, Advocate himself had given the admitted reply Ex P-2 on behalf of the defendant no. 1 and if the signatures of the said counsel as witness on the MOU Ex. PW-1/6 were forged, then on the basis of non-examining of the said advocate on the said aspect, adverse presumption has to be drawn against the defendant no. 1 that defendant no. 1 did not want to examine the said counsel to avoid his false plea on the said aspect being exposed. From the evidence on record with respect to the aforesaid MOU already analyzed in preceding paragraphs it does not appear that signatures of defendant no. 1 on the same were obtained in blank and subsequently the said MOU was CS (COMM.) No. 93/2022 OP Khandelwal Vs Ravi Gupta & Anr. Page No.34 of 38 manufactured. In view of the said arguments and inherent contradictions in the case of the defendants, I find force in the contention of the plaintiff that MOU was signed by the defendant no. 1 voluntarily and without any force in discharge of his liability in pursuance to the MOU Ex. PW-1/6 executed between the parties.
38.The theory of security cheques propounded by the defendants is not tenable in view of the aforesaid inherent contradictions in the pleas qua the same and also in view of the fact that if the defendant no. 1 had to give any security cheques to the plaintiff, one cheque would have been sufficient and there is no explanation as to why defendant no. 1 had issued 9 cheques in favour of the plaintiff. Furthermore merely from the part of admission by the plaintiff that it used to take security cheques from some of the customers depending upon customer to customer, it cannot be inferred that the said cheques given by the defendant to the plaintiff, were security cheques in the absence of any concrete evidence in this regard. DW-2 has also admitted that his account was freezed and further that he did not file any complaint with the bank qua issuance of blank signed cheques by him in favour of the plaintiff. Cheque dishonouring is admitted by DW-2 (defendant no. 1). Further the nine cheques issued by the defendants is for total amount, which was outstanding against the defendants, which further corroborates the fact that the cheques were issued in CS (COMM.) No. 93/2022 OP Khandelwal Vs Ravi Gupta & Anr. Page No.35 of 38 lieu of the settlement as per MOU Ex. PW-1/6 for the dues of the defendants. Also nowhere in the reply Ex. P-2 to plaintiff's notice Ex. P-1 of the plaintiff, defendants had made any such claim qua the said blank cheques, from which it appears that plea of blank signed cheques of the defendants, is false.
39.As regards the claim of the plaintiff against both the defendants, defendant no. 2 was the handler of defendant no. 1 and since the transactions took place with M/s. Shubh Steels whose proprietor is Mr Ravi Gupta (defendant no. 1) and there was no personal guarantee of defendant no. 2 qua the said transactions, therefore defendant no. 2 cannot be made liable jointly and severally with defendant no. 1, for the outstanding amount.
40.In view of the above, I find force in the aforesaid submissions of Ld Counsel for the plaintiff and plaintiff has succeeded in establishing that defendant no. 1 was liable to pay the outstanding amount of Rs. 43,24,315/- alongwith interest.
41.The next question is as to the rate of interest. Plaintiff has also claimed interest @ 18% PA on the delayed payment.
42.In the case of Cimmco Limited Versus Pramod Krishna Agrawal 2019 SCC OnLine Del 7289, it is held as follows;
"3..........Hon'ble Supreme Court has now mandated that lower rates of interest be granted and therefore the pre-suit and also the pendente lite and future interest is liable to be reduced by this Court. Reliance is placed upon the judgments in the cases of Rajendra Construction Co. v. Maharashtra Housing & Area CS (COMM.) No. 93/2022 OP Khandelwal Vs Ravi Gupta & Anr. Page No.36 of 38 Development Authority, (2005) 6 SCC 678, McDermott International Inc. v. Burn Standard Co. Ltd., (2006) 11 SCC 181, Rajasthan State Road Transport Corporation v. Indag Rubber Ltd., (2006) 7 SCC 700, Krishna Bhagya Jala Nigam Ltd. v. G. Harischandra, (2007) 2 SCC 720 & State of Rajasthan v. Ferro Concrete Construction Pvt. Ltd. (2009) 3 Arb. LR 140 (SC)."
43.In the given facts and circumstances and keeping in view the prevalent rate of interest, the plaintiff is entitled to simple interest @ 9% per annum on the outstanding amount from the date of filing of the suit till actual recovery.
44.In view of the above, issue no. 1 is decided in favour of the plaintiff and against defendant no. 1. Issue no. 2 accordingly fails and is decided against the defendants and in favour of the plaintiff.
"ISSUE Nos. 3 & 43. Whether the suit is barred by limitation? OPD
4. Whether the suit is not properly valued for the purposes of court fees and jurisdiction? OPD"
45.Since both these issues are inter-connected and therefore are being disposed of together.
46.The onus to prove both these issues was on the defendants.
During the course of arguments, Ld Counsel for the defendants had conceded that the suit of the plaintiff is within limitation and further that the suit has been properly valued. In view of the said admission on the part of Ld Counsel for the defendants and in view of the fact that the defendants had not been able to produce CS (COMM.) No. 93/2022 OP Khandelwal Vs Ravi Gupta & Anr. Page No.37 of 38 any material on record to show that the suit of the plaintiff is barred by limitation or that the same has not been valued property, both these issues fail and are accordingly decided against the defendants and in favour of the plaintiff.
RELIEF
47.In view of the above, the present suit is decreed for a sum of Rs.
43,24,315/- in favour of the plaintiff and against defendant no. 1 alongwith pendentelite and future interest @ 9% per annum from 18-01-2020 alongwith cost of the suit.
Decree sheet be drawn accordingly.
File be consigned to record room.
(Announced in the open (Ashutosh Kumar)
Court) District Judge (Commercial Court)-1
West, Tis Hazari Courts, Delhi
01-06-2024
CS (COMM.) No. 93/2022 OP Khandelwal Vs Ravi Gupta & Anr. Page No.38 of 38