Delhi District Court
M.L. Sharma Company vs Bks Engineering Contracts Pvt Ltd on 20 March, 2025
IN THE COURT OF MS. MONA TARDI KERKETTA, DISTRICT
JUDGE-06, SOUTH-EAST DISTRICT,
SAKET COURTS, NEW DELHI.
CS No.207973/2016
CNR No. DLSE01-001401-2014
M.L. Sharma & Company Pvt. Ltd.
Through Director,
Office at :
M-48, Shopping Center, Greater Kailash-II,
New Delhi-110048 ............Plaintiff
Versus
1. BKS Engineering Contracts Pvt. Ltd.
Through its Managing Director
2. Bijoy Kumar Samal
Through its Director,
3. Sh. Tara Chand
Through its Manager,
Office Add.:
J-2/28A, D.D.A. Flats,
Kalkaji, New Delhi-110019 ........Defendants
Date of Filing : 03.11.2014
Date of Final Arguments : 20.11.2024
Date of Judgment : 20.03.2025
Final Decision : Suit Disposed off accordingly .
Appearances:
For plaintiff : Sh. Sarang Choudhary, Adv.
For defendant No.1 & 2 : Sh. S.K. Rout, Sh. B. N. Mishra, Advs.
CS No.207973/2016 Page 1 of 21 DJ-06/SE/SKT/Delhi
Defendant No.3 was proceeded ex-parte vide order dated 23.05.2015.
JUDGMENT
Suit for Recovery of Rs.3,71,496/-
1. The brief facts of the case as disclosed in the plaint are that plaintiff is Private Limited Company engaged in the business of all kinds of building and civil engineering material including sanitary items. Defendant no.1 is Private Limited Company being run under the control of defendant no.2, who is the Director of defendant no.1 whereas defendant no.3 is the Manager of defendant no.1. All defendants are jointly and severally liable to bear with liabilities of defendants.
2. It is stated that defendants were having business dealings with plaintiff and defendant no.2 and 3 used to visit the office of plaintiff to place the orders for supplying goods on credit basis and against the bills/invoices surmising the order placed on defendants. The details of the orders placed as well as goods supplied / returned with bill / invoice no. are as follows:
ORDER PLACED BY DEFENDANT NO.1 AND 2 Date Bill No. Amount
01.04.2012 B/F Rs.15,700/-
19.04.2012 F00637 Rs.17,117//-
22.04.2012 F00733 Rs.1,866/-
02.05.2012 F01039 Rs.2,070/-
30.06.2012 F03005 Rs.1,794/-
20.08.2012 F04512 Rs.18,079/-
25.08.2012 F04668 Rs.2,295/-
29.08.2012 F04768 Rs.855/-
29.08.2012 F04767 Rs.5,152/-
CS No.207973/2016 Page 2 of 21 DJ-06/SE/SKT/Delhi
01.09.2012 F04913 Rs.713/-
13.10.2012 F06322 Rs.1,656/-
21.10.2012 F06628 Rs.6,624/-
____________________________________________________ Due Amount : Rs.73,921/-
Less : Received / Goods Returned Rs.38,405/-
Balance Due Amount : Rs.35,516/-
ORDER PLACED BY DEFENDANT NO.2
01.09.2012 F04911 Rs.30,800/-
05.09.2012 F04988 Rs.9,286/-
06.09.2012 F05040 Rs.1,98,286/-
05.10.2012 F05979 Rs.3,35,021/-
08.10.2012 F06117 Rs.6,905/-
10.10.2012 F06165 Rs.1,211/-
____________________________________________________ Due Amount: Rs.5,81,509/-
Add: Bank Charges Rs.200/-
Less: Received / Goods Returned Rs.3,06,053/-
Balance Due Amount: Rs.2,75,656/-
ORDER PLACED BY DEFENDANT NO.3
13.08.2012 F04302 Rs.54,733/-
16.08.2012 F04350 Rs.1,33,900/-
18.08.2012 F04441 Rs.8,671/-
20.08.2012 F04513 Rs.1,560/-
02.09.2012 F04920 Rs.2,790/-
03.09.2012 F04966 Rs.986/-
08.09.2012 F05112 Rs.12,490/-
05.09.2012 F05016 Rs.3,072/-
CS No.207973/2016 Page 3 of 21 DJ-06/SE/SKT/Delhi
07.09.2012 F05080 Rs.2,85,117/-
07.09.2012 F05076 Rs.95,703/-
08.09.2012 F05105 Rs.4,402/-
09.09.2012 F05129 Rs.3,192/-
10.09.2012 F05199 Rs.1,348/-
10.09.2012 F05167 Rs.6,052/-
19.09.2012 F05475 Rs.9,029/-
20.09.2012 F05497 Rs.10,118/-
21.09.2012 F05539 Rs.40,583/-
____________________________________________________ Due Amount: Rs.6,80,412/-
Less: Received / Goods Returned: Rs.6,49,343/-
Balance Due Amount: Rs.31,069/-
Total Due Amount: Rs.3,42,241/-
Add : Interest Rs.29,255/-
Balance Amount to be received : Rs.3,71,496/-
3. It is further stated that as per satisfaction of defendants, plaintiff delivered the goods which were duly received by defendants. Defendant no.2 and 3 knew very well about M/s Samal or M/s Tara Chand or Mr. Tara Chand, who were cheating people under the roof of defendant no.1 and to the Government by not depositing the taxes as per actual transactions of the company.
4. It is further stated that in discharge of their partial liability, defendants had issued one cheque bearing no.847337 for Rs.1 lakh through M/s Samal which was returned unpaid on 27.10.2012. Defendants also issued two cheques bearing no.475011 & 475022 of Rs.1 lakh each through BKS Engineering Contracts Pvt. Ltd. which were also returned unpaid on 22.02.2013. Plaintiff apprised CS No.207973/2016 Page 4 of 21 DJ-06/SE/SKT/Delhi defendants the fate of the aforesaid cheques but defendants did not pay any heed and put off the matter on one pretext or the other. Defendants had no intention to make the outstanding payment. Finding no other option, plaintiff served upon defendant no.1 a legal notice dated 02.09.2014 which was replied by defendant no.1 through its counsel but did not make any payment. Hence, the present suit.
5. Plaintiff prayed to pass the following reliefs in its favour and against defendants: -
5.1) A decree for recovery of a sum of Rs.3,71,496/- (Rupees Three Lakhs Seventy-One Thousand Four Hundred Ninety-Six only). 5.2) A decree for pendente lite and future interest @ 24% p.a. 5.3) Cost of the suit 5.4) Any other further order or orders which this court may deem fit and proper, in the interest of justice.
6. Vide order dated 23.05.2015, defendant no.3 was proceeded ex-parte. Defendant No.1 and 2 contested the present suit on the following grounds :
6.1) The suit of plaintiff is bad for mis-joinder and non- joinder of necessary party as plaintiff cannot maintain the present suit against defendant no.2, who is the Director of defendant no.1. Defendant no.1 never informed defendant no.3 to enter into any kind of transaction with plaintiff. Defendant no.1 and 2 are not liable to make any payment which due against defendant no.3, M/s Samal and M/s Tara Chand as defendant no.1 and 2 have no concern with them. 6.2) Plaintiff failed to clarify the name of defendants. As per memo of parties, BKS Engineering Contracts Pvt. Ltd. has been arrayed as defendant no.1 through its Managing Director but the name of Managing Director is not mentioned. Further, defendant no.2 CS No.207973/2016 Page 5 of 21 DJ-06/SE/SKT/Delhi namely Samal has been sued through its Owner/Director. It is incomprehensible as to how an individual can be represented through its director. Similar is the case of defendant no.3. 6.3) Plaintiff sought recovery from M/s Samal and M/s Tara Chand and the bills in question also pertained to M/s Samal and M/s Tara Chand, however, they have not been made a party to the present suit. As the bills in question pertained to M/s Samal and M/s Tara Chand, defendant no.1 and 2 are not liable to make any payment which has been raised against M/s Samal and M/s Tara Chand, with whom defendant no.1 and 2 have no concern at all. The suit of plaintiff is without any cause of action against defendant no.1 & 2 . 6.4) Defendant no.2 was solely authorized to place order on behalf of defendant no.1 and under the said authority, defendant no.2 had placed purchase order and deposited two cheques bearing nos.475011 and 475022 of Rs.1 lakh each as security and plaintiff was liable to return the same once the bills were cleared but plaintiff fraudulently presented those cheques for encashment even after receiving the entire payment from defendant no.1 except the balance payment of Rs.35,516/- arising out of the bills dated 01.04.2012, 19.04.2012, 22.04.2012, 02.05.2012, 30.06.2012, 20.08.2012, 25.08.2012, 29.08.2012, 29.08.2012, 01.09.2012, 13.10.2012 and 21.01.2012, all issued against defendant no.1. Defendant no.1 and 2 are ready and willing to make the payment of the said amount as and when directed by the Court without any interest.
6.5) Defendant no.1 and 2 are not liable to make any payment which due against defendant no.3, M/s Samal and M/s Tara Chand as defendant no.1 and 2 have no concern with them.
7. Plaintiff filed the replication to the written statement of defendant no.1 and 2 wherein it denied the contents of the written CS No.207973/2016 Page 6 of 21 DJ-06/SE/SKT/Delhi statement and reiterated & reaffirmed the contents of the plaint.
8. From the pleadings of the parties, the following issues were framed on 23.05.2015 by the order of Ld. Predecessor:
ISSUES:
1. Whether the suit of plaintiff is bad for non-joinder and misjoinder of the parties ? OPD
2. Whether plaintiff is entitled for recovery of suit amount as prayed for ? OPP
3. Whether plaintiff is entitled for interest, if so, at what rate and for which period ? OPP Relief.
9. In order to prove its case, plaintiff examined Sh. Rakesh Sharma, Director of plaintiff as PW-1, who tendered his examination- in-chief by way of affidavit, which is Ex.PW-1/A and relied upon the following documents :
Ex.PW1/1 Copies of Certificate of Incorporation and (OSR) & Resolution.
Ex.PW-1/2 Ex.PW-1/3 to Orders placed by defendant no.1 and 2 (details of Ex.PW-1/13 which are mentioned in para no.2).
Ex.PW1/14 Ledger Account from 01.04.2012 to 31.03.2013 in respect of defendant no.1.
Ex.PW1/15 to Orders placed by defendant no.2 (details of which Ex.PW-1/20 are mentioned in para no.2).
Ex.PW-1/21 Ledger Account from 01.04.2012 to 31.03.2013 in respect of M/s Samal.
Ex.PW1/22 to Orders placed by defendant no.3 (details of which Ex.PW-1/39 are mentioned in para no.2).
Ex.PW-1/40 Ledger Account from 01.04.2012 to 31.03.2013 in respect of M/s Tara Chand.
Ex.PW1/41 Legal notice. Ex.PW1/42 Receipt of speed post. CS No.207973/2016 Page 7 of 21 DJ-06/SE/SKT/Delhi Ex.PW1/43 Court fees. Ex.PW1/44 Certificate u/s 65B of Indian Evidence Act.
10. PW-1 was duly cross examined by learned counsel for defendant No.1 and 2. Vide order dated 22.11.2018, plaintiff's evidence was closed on the separate statement of Director of plaintiff.
11. Subsequent, thereto, the matter was fixed for defendant evidence. However, defendant no.1 and 2 did not lead any evidence. Vide order dated 23.03.2019, defendant's evidence was closed.
12. Subsequent thereto, the matter was fixed for final arguments. The final arguments were heard conclusively on 20.09.2024. Thereafter, the matter was fixed for pronouncement of judgment.
13. Following arguments were submitted on behalf of plaintiff :
13.1) Defendant no.1 used to place orders for supply of goods on credit basis and defendant no.2 (Director of defendant no.1) and defendant no.3 (Manager of defendant no.1) used to come in person to collect the goods against signatures (deposed so in the cross-
examination of PW-1 dated 12.07.2018) ; invoices were prepared in the name of defendant no.2 and 3 as disclosed in invoices for the month of August & September, 2012 ; defendant no.1 admitted the invoices and signature appearing in Ex.PW-1/3 to Ex.PW-1/13 ; defendant no.1 admitted the liability under invoices Ex.PW-1/3 to Ex.PW-1/13 and made the payment of Rs.35,516/- vide order dated 30.7.2015.
13.2) Defendant no.1 is liable for the acts of defendant no.2, who is the Director of defendant no.1. Defendant no.1 and 2 did not CS No.207973/2016 Page 8 of 21 DJ-06/SE/SKT/Delhi file any documentary proof to show that only defendant no.2 had the authority to place order ; in the written statement, it is stated that defendant no.2 had issued cheque bearing no.475011 & 475022 as security but in the cross-examination, PW-1 was suggested that defendant no.2 never issued the cheques as security but for payment of consolidated liability. Defendant no.1 and 2 did not take any action against plaintiff for misuse of the said alleged security cheques. The ledger accounts Ex.PW-1/21 to Ex.PW-1/40 show that defendant no.2 and 3 had given advance payment, therefore, the question of issuance of security cheque by defendants does not arise.
13.3) Defendant no.1 is liable for the action of defendant no.3 as well. In the written statement, defendant no.1 and 2 claimed that defendant no.3 was never the Manager of defendant no.1 but did not dispute that he was the employee of defendant no.1 and received goods from plaintiff from time to time on their behalf. 13.4) On analysis of the signatures appended on the admitted invoices of defendants, it becomes clear that the goods were being collected from plaintiff by the employer of defendant no.1 against their signatures.
13.5) Defendant no.3 did not contest the present suit by joining the proceedings despite having notice of the contents of the plaint and was proceeded ex-parte.
13.6) On the basis of evidence adduced, plaintiff is able to discharge the onus to prove its case.
14. Following arguments were submitted on behalf of defendant no.1 and 2 :
14.1) In the cross-examination dated 12.09.2018, PW-1 deposed that defendant no.1 and 2 placed the order vide Ex.PW-1/3 to Ex.PW-1/13 and the balance amount due and payable to plaintiff was CS No.207973/2016 Page 9 of 21 DJ-06/SE/SKT/Delhi only Rs.35,516/-. Pertinently, the said amount of Rs.35,516/- was paid by defendant no.1 and 2 to plaintiff vide Demand Draft bearing no.22873 dated 05.10.2018 of Rs.35,516/- which was admitted even by PW-1 in the cross-examination dated 22.11.2018. 14.2) Defendant no.1 and 2 are not liable to pay the bills raised in the name of M/s Samal and M/s Tara Chand because they cannot be clubbed in one suit and their liability towards plaintiff is distinct and separate from defendant no.1 and 2. 14.3) There is no contract between defendant no.1, M/s Samal and M/s Tara Chand to treat all the transactions as a single contract giving rights to single cause of action. It is not the case of plaintiff that the goods were supplied by plaintiff to defendants on different dates under a single contract. Rather, it is the case of plaintiff that defendant no.2 used to place order in the name of M/s Samal and M/s Tara Chand whereas defendant no.2 was solely authorized to place orders on behalf of defendant no.1.
14.4) Plaintiff failed to prove that defendant no.2 while placing order was acting as an agent or authorized signatory or Director of M/s Samal and M/s Tara Chand and also failed to prove that defendant no.3 was acting as an agent or authorized signatory or Director of M/s BKS Engineering Pvt. Ltd., M/s Samal and M/s Tara Chand.
14.5) Different orders were placed from time to time and those orders were executed on different dates and each order were of a different entity i.e. M/s BKS Engineering Pvt. Ltd., M/s Samal and M/s Tara Chand would constitute a distinct and separate cause of action. Therefore, the amount pertained to the bills raised in the name of M/s Samal and M/s Tara Chand owed to plaintiff cannot be clubbed in one suit.
14.6) Plaintiff is not entitled to claim the suit amount against CS No.207973/2016 Page 10 of 21 DJ-06/SE/SKT/Delhi defendant no.1 and 2 as plaintiff failed to prove its case against them.
The outstanding due amount against defendant no.1 and 2 has already been received by plaintiff from defendant no.1 and 2 in court proceedings and as such, there is no liability remained against defendant no.1 and 2 and the suit of plaintiff is liable to be dismissed against defendant no.1 and 2.
15. Let us first discuss some of the settled proposition of law before adverting to the facts and circumstances of the case in hand, which are mentioned as under: -
15.1) It is well settled proposition of law that plaintiff has to prove his entire case in accordance with law and stand on his own legs. (Ref: Harish Mansukhani Vs. Ashok Jain, 2009 (109) ,DRJ 126 (DB) ; Ganpat Lal Vs. Nand Lal Hanswani & Ors. AIR 1998 MP 209).
In the judgment titled as Shri Sunil Dang Vs. Dr. R.L.Gupta, CS(OS) 1617(2007), decided on 13.01.2009, It was held that even in the cases where defendant is ex-parte, responsibility of plaintiff to prove his case does not get diluted. On the contrary, on the defendant being ex- parte, the onus is more on plaintiff to prove his case. When defendant is contesting the suit, the matters which are not disputed by defendant are deemed to be admitted and need not be proved. However, when defendant fails to appear, there can be no admission and plaintiff is to prove the entire case in accordance with law.
15.2) There is an essential distinction between burden of proof and onus of proof; burden of proof lies upon the person who has to prove a fact and it never shifts but the onus of proof shifts. Such a shifting of onus is a continuous process in the evaluation of evidence. (Ref: AIR 1964 SC Page 136; Section 101 & 102 of Indian Evidence Act).
CS No.207973/2016 Page 11 of 21 DJ-06/SE/SKT/Delhi 15.3) It is the duty of the party to lead the best evidence in his possession, which could throw light on the issue in controversy and in case such material evidence is withheld, the court may draw adverse inferences under section 114(g) of the Evidence Act 15.4) Plaintiff is required to produce best of evidence in his possession and he is not entitled to get the decree on the basis of failure of defendant to prove his right or title. Plaintiff cannot bank upon the weaknesses of defendant in order to prove his case on his own by producing the cogent materials. [Ref: Punjab Urban Planning and Development Authority Vs. M/s Shiv Saraswati Iron and Steel Re- rolling Mills, Civil Appeal No. 1734 of 1998 ].
15.5) Failure of a party to prove its defence does not amount to admission nor it can reverse or discharge the burden of proof of the plaintiff (Ref: LIC of India & Ar. Vs. Ram Pal Singh Bisen,(2010) 4 SCC 491).
16. The issue-wise findings of the court are discussed as under :
Issue No.1 : Whether the suit of plaintiff is bad for non-joinder and misjoinder of the parties ? OPD
17. The onus to prove this issue was fixed upon defendant no.1 and 2. Defendant no.1 and 2 argued that plaintiff cannot maintain the present suit against defendant no.2, who is the director of defendant no.1. defendant no.1 never instructed defendant no.3 to enter into any kind of transaction on its behalf with plaintiff and defendant no.1 and 2 had no concern with M/s Samal and M/s Tara Chand. Plaintiff failed to clarify the name of defendants properly in the memo of parties and defendant no.2 and 3 being an individual could not be represented through its Director/Manager. Defendant CS No.207973/2016 Page 12 of 21 DJ-06/SE/SKT/Delhi no.1 and 2 also argued that plaintiff could not have sought recovery of the suit amount from defendant no.1 and 2 qua the bills of M/s Samal or M/s Tara Chand without arraigning them as defendants in the array of parties. On the other hand, plaintiff controverted the claims of defendant no.1 and 2 submitting that defendant no.2 was sued because of his personal liability and directorship of defendant no.1 and defendant no.3 was also sued because of his personal liability and Managership of defendant no.1 ; M/s Samal and M/s Tara Chand had cheated plaintiff under the roof of defendant no.1 by representing themselves through different names.
18. Let us now examine on the basis of evidence adduced as to whether the suit of plaintiff is bad for non-joinder and mis-joinder of necessary and proper party, to be precise whether all defendants or only some of them are proper and necessary party to the suit and whether cause of action arose against all of them or only some of them in favour of plaintiff to file the present suit.
19. It is observed that though defendant no.1 and 2 did not lead any evidence to prove their claims in this regard and that defendant no.3 was proceeded ex-parte. It is well settled that a director would be liable only with respect to the acts or omission which have occurred within his knowledge, at his consent or connivance . or where he had not acted diligently. In the case in hand, there is admittedly no averments in the pleadings or evidence adduced to prove fraud or negligence on the part of defendant no.2 &3 . For this reason, in the opinion of this Court, the liability to pay the suit amount cannot be fastened upon defendant no.2 who was shown to be the director of defendant no.1 as he was not acting in his individual capacity and were merely acting in the capacity of director of CS No.207973/2016 Page 13 of 21 DJ-06/SE/SKT/Delhi defendant no.1. Further, there was no evidence adduced to prove that defendant no.3 was manager of defendant no.1 and was acting for defendant no.1 in the capacity of manager or employee. Even if it is taken to be true that he was manager or employee of defendant no.1, then also, no liability could be fastened against him because like defendant no.2, he too was not acting in his individual capacity but as manager or employee of defendant no.1. The Court is in agreement with the arguments submitted on behalf of defendant no.1 &2 that plaintiff failed to clarify the name of defendants properly in the memo of parties and their individual roles in the business dealings between plaintiff and defendants and that defendant no.2 and 3 could not have been represented through its director and manager being individuals and not being a company or proprietorship firm. Pertinently, PW-1 admitted in the cross examination that the ledger account in the name of M/s Tara Chand did not reflect that Tara Chand has any connection with defendant no.1.
20. Further, the Court finds merit in the further arguments of defendant no.1 and 2 that plaintiff could not have sought recovery of the suit amount from defendant no.1 and 2 qua the bills of M/s Samal or M/s Tara Chand without arraigning them as defendant in the array of parties. Also, plaintiff did not adduce any evidence on record to prove that M/s Samal or M/s Tara Chand had cheated plaintiff under the roof of defendant no.1 by representing themselves through different names. Plaintiff tried to prove the relationship between defendant no.3 and defendant no.1 through signatures appearing on admitted invoices and those raised in the name of M/s Tara Chand claiming that goods were received even by defendant no.3 is also of no avail as again there was no evidence adduced that defendant no.3 was acting even in his individual capacity and was personally liable to pay the suit amount to plaintiff or that he was the proprietor of M/s CS No.207973/2016 Page 14 of 21 DJ-06/SE/SKT/Delhi Tara Chand.
21. However, as defendant no.1 and 2 admitted their liability to pay the balance amount of Rs.35,516/- in the written statement and paid the same to plaintiff by way of Demand Draft before the Court, the Court finds that the cause of action arose only against defendant no.1 through its director and it is defendant no.1 through its director alone is the proper and necessary party to the present suit. So far as M/s Samal and M/s Tara Chand are concerned, they could have also been a proper and necessary party provided plaintiff arraigned them through their proprietors as defendants in the array of parties. As such, this is a fit case where the Court should exercise its discretionary power provided under Order I Rule 10 CPC to strike out the name of defendant no.2 and 3 from the array of parties as defendant no.2 and 3 have been improperly joined in the array of parties. It is ordered accordingly. It is clarified that the court shall now examine the liability, if any, qua defendant 1 only.
Issue No.2 : Whether plaintiff is entitled for recovery of suit amount as prayed for ? OPP
22. The onus to prove this issue was fixed upon plaintiff. It was argued on behalf of plaintiff that defendant no.1 was liable for the acts of its Director (Defendant No. 2) and Manager (Defendant No. 3), who personally used to collect goods on credit basis from plaintiff. The invoices for August and September 2012 were prepared in the names of defendant No. 2, defendant No. 1 admitted the invoices (Ex.PW-1/3 to Ex.PW-1/13), acknowledging the liability and making a payment of Rs. 35,516/- vide order dated 30.07.2015. It was further argued that despite claims of security cheques and attempts to limit individual liability, the facts emerging from cross-examination of CS No.207973/2016 Page 15 of 21 DJ-06/SE/SKT/Delhi PW-1 and ledger accounts (Ex.PW-1/21 & Ex.PW-1/40) demonstrated that defendant no. 1's employees consistently collected goods from plaintiff, thereby the company's comprehensive responsibility for the transactions stood proved. On the other hand, it was argued on behalf of defendant that in their pleadings defendant no.1 and 2 admitted their liability only to the extent of Rs. 35,516/- which they paid to plaintiff as per the order and it was admitted even by PW-1 in the cross-examination dated 12.09.2018, wherein he deposed that defendant no.1 and 2 had placed the order vide Ex.PW-1/3 to Ex.PW-1/13 and the balance amount due and payable to plaintiff was only Rs.35,516/-. Pertinently, the said amount of Rs.35,516/- was paid by defendant no.1 and 2 to plaintiff vide Demand Draft bearing no.22873 dated 05.10.2018 of Rs.35,516/-.
23. Let us now examine whether plaintiff was able to discharge the onus to prove this issue on the basis of adduced evidence qua the remaining suit amount. It was argued on behalf of plaintiff that defendant no.1 was liable for the acts and omissions done by its director and manager and as such it was liable to discharge the liability towards plaintiff on their behalf as well. There is no quarrel with the proposition that a company may be held liable for the wrongful acts of its director, however, the liability of its director is not automatic even though the director is fiduciary of the company. There are certain conditions which are to be looked at before fastening liability on directors and one such condition is that there should be a specific allegation against the director backed with sufficient evidence to prove his involvement in wrongdoing of the company and mere simple vague allegations are not adequate to fasten vicarious liability on director. On perusal of plaint, it is revealed that in the entire plaint, there is no specific allegation against defendant no.2 for the acts or CS No.207973/2016 Page 16 of 21 DJ-06/SE/SKT/Delhi omission of defendant no.1. Plaintiff vaguely averred that in the plaint that defendant no.2 used to visit the office of plaintiff to place orders and collect goods on credit basis against the bills and suit amount is due and payable against defendants. Plaintiff further averred vaguely that defendant no.2 was cheating people under the roof of defendant no.1 through different name and evading payment of taxes to the govt. and that in discharge of their partial liability, defendants issued cheques dated 27.10.2012 and 22.02.2013 through M/s Samal & defendant no.1 which were dishonoured. This court is of the view that the acts of mere placing orders and collecting goods on behalf of defendant no.1 are not sufficient to fasten the liability of defendant no.1 for the acts and omission of defendant no.2. There is no iota of evidence qua the issuance of cheques by defendant no.2 on behalf of defendant no.1 in discharge of its partial liability and dishonouring of the above cheques and that defendant no.2 used to cheat people under the roof of defendant no.1 through different names and evade payment of legitimate taxes to govt.
24. Let us now further scrutinize the evidence adduced on behalf of plaintiff. It is observed that during cross examination of PW-1, such facts / admission emerged which led to prove on record that plaintiff was not able to prove the recovery of the suit amount except the admitted amount of Rs.35,516/- by defendant no.1. Section 34 of Indian Evidence Act supports admissibility of ledger entries as evidence, provided they are maintained in a regular business. Further, the correctness or authenticity if ledger entries can be challenged if the person who made the entries is not produced to testify the correctness of the entries made therein. On the contrary, if the entries are corroborated by the person maintaining the ledger, the ledger accounts can be deemed to be credible.
CS No.207973/2016 Page 17 of 21 DJ-06/SE/SKT/Delhi
25. Now adverting to the present case, in the present case though defendants did not lead evidence to prove the non-genuineness of the entries of these ledger accounts but the fact remained that plaintiff itself was not able to prove its authenticity. It is observed that there are no pleadings of plaintiff that these ledger accounts were maintained in the regular course of business. Further, the authenticity of the entries made in these ledger accounts is not proved for the want of examination of the person concerned who used to maintain these ledger accounts. In fact, in the cross-examination, PW-1 admitted that the ledger accounts Ex. PW-1/14 and Ex. PW-1/21 were not certified by the CA. So is the ledger account Ex. PW-1/40 maintained in the name of M/s Tara Chand and is also not confirmed or counter signed on behalf of defendant no.1. Also, the entries of these ledger accounts are not corroborated by the purchase orders which admittedly plaintiff did not file on the record to back the ledger accounts. In the opinion of the court, filing and tendering of purchase order in evidence was crucial to prove the case of plaintiff as in the absence of purchase order, it is not possible to ascertain the description, quantity, rate, and taxes etc. of the goods ordered and supplied.
26. Similarly, the correctness of the details of invoices raised is also doubtful in the absence of any purchase order. Pertinently, plaintiff could not prove the invoices tendered were the proforma invoices giving estimated cost or cash memo giving and tendering of the exact cost. On being put to regarding the nature of invoices or whether a proforma invoice or cash memo was raised against the goods supplied, PW-1 deposed that there was no practice with plaintiff that in case of sale of goods by cash and credit basis, the invoices raised used to mention proforma invoice or cash memo but CS No.207973/2016 Page 18 of 21 DJ-06/SE/SKT/Delhi admitted that invoice Ex.PW-1/7 to Ex.PW-1/9, Ex. PW-1/11 to Ex. PW-1/13 did not mention the word 'invoice/cash memo'. From this statement of PW-1, it becomes abundantly clear that the goods were not always used to be supplied on credit basis, as claimed by plaintiff. PW-1 could not identify the signatures at point A on Ex. PW-1/5 though claimed that it was of an employee of defendant but also admitted that those who used to come to purchase the goods never showed any authorization letter of defendant company for the said purpose.
27. It is observed that the invoices Ex.PW-1/15 to Ex.PW-1/20 were in the name of M/s Samal who is not a party to the present suit though in voluntarily statement, PW-1 deposed that Samal was defendant no.2, director of defendant no.1 is impleaded as one of the defendants, however, while discussing issue no.1 and liability of company for the acts of its director , the Court already observed that defendant no.2 was under no liability in his individual capacity for the acts and omission done on behalf of defendant no.1 and the vicarious liability of defendant no.2 in accordance with law was not proved. PW-1 admitted that M/s Samal and Tara Chand/defendant no.3 never brought any authorization letter or any request letter on the letterhead of defendant no.1 or defendant no.2 for the purchase of goods. PW-1 was rightly suggested that M/s Samal and Tara Chand were not the employee of defendant no.1 or in any way connected with defendant no.1 &2. Further, the court finds force in the arguments of defendant that different orders were placed from time to time and those orders were executed on different dates and each order were of a different entity i.e. M/s BKS Engineering Pvt. Ltd., M/s Samal and M/s Tara Chand would constitute a distinct and separate cause of action. Therefore, the amount pertaining to the bills raised in the name of M/s Samal and M/s Tara Chand owed to plaintiff cannot be clubbed in one CS No.207973/2016 Page 19 of 21 DJ-06/SE/SKT/Delhi suit and defendant no. 1 and 2 could not have been made liable to pay the same to plaintiff on their behalf and their liability towards plaintiff is distinct and separate from defendant no.1 and 2.
28. Now dealing with the arguments of plaintiff regarding issuance of cheques bearing nos.475011 and 475022 by defendants in favour of plaintiff towards partial discharge of liability and their dishonouring on presentation by plaintiff with its banker. It is observed that to prove this claim, plaintiff did not lead any evidence except self-serving deposition of PW-1. PW-1 admitted that plaintiff did not place on record the said cheques either in original or photocopy or also the return memo of dishonoured cheques. PW-1 further admitted that it never issued any legal notice u/s 138 of N.I. Act on dishonour of the said cheques. PW-1 was rightly suggested that defendant no.2 never issued those cheques on behalf of defendant no.1 from the accounts of defendants and for this reason, plaintiff neither sent a legal notice nor filed a case under section 138 of the NI Act. In the absence of any evidence on record, this Court finds that plaintiff was not able to substantiate its claim in this regard. PW-1 was rightly suggested that defendant no.2 had not issued the said cheques in favour of plaintiff from the account of defendant no.1 and that is why the said cheques were not placed on record and no legal notice under Section 138 N.I. Act was sent and a complaint case under Section 138 N.I. Act for dishonour of the cheques was filed.
29. In view of the above discussion, it is established on record that plaintiff was able to discharge the onus to prove its case qua defendant no.1's liability to the extent of Rs.35,516/- only which admittedly stood paid by way of Demand Draft bearing no.22873 dated 05.10.2018 of Rs.35,516/-, drawn on Punjab National Bank, Ravidas Marg, Tuglakabad Extension vide order dated 22.11.2015 and CS No.207973/2016 Page 20 of 21 DJ-06/SE/SKT/Delhi for the balance suit amount, plaintiff could not prove its case. The issue in hand is decided accordingly.
Issue No.3 : Whether the plaintiff is entitled for interest, if so, at what rate and for which period ? OPP
30. The onus to prove this issue also fixed upon plaintiff. However, in view of the findings returned on issue no.1 and 2, this court is of the view that the ends of justice would be met if plaintiff is awarded 8% pendente-lite interest per annum till the date of payment of Rs. 35,516/- which is the admitted liability of defendant no.1. The issue no.3 is decided accordingly.
Relief :
31. In view of findings on the issue framed, the suit of plaintiff is disposed off in terms of the aforesaid findings accordingly. Cost of the suit is also awarded to plaintiff. Decree sheet be prepared accordingly.
32. File be consigned to record room, after due compliance.
Digitally signed MONA by MONA TARDI
KERKETTA
TARDI Date:
KERKETTA 2025.03.27
16:47:56 +0530
Announced in the open court MONA TARDI KERKETTA
on this 20th Day of District Judge (SE)-06
March, 2025 Saket Courts, New Delhi.
CS No.207973/2016 Page 21 of 21 DJ-06/SE/SKT/Delhi