Delhi District Court
S N Overseas vs M/S Supreme Fabrics on 10 January, 2025
IN THE COURT OF MS. RAVINDER BEDI
DISTRICT JUDGE (COMMERCIAL COURT)-12
Tis Hazari Courts, Delhi
In the matter of:-
CS (COMM) No. 197/2018
S.N Overseas
through its Proprietor: Mr. Nitish Narula
2637, 1st Floor, Chadda Market
Naya Bazar, Delhi
........Plaintiff
Versus
(1) M/s Supreme Fabrics
Y-13/3, Loha Mandi,
Naraina, New Delhi-110028
through its Proprietor
Praveen Gulati ......Defendant no. 1
(2) Rajesh Gulati, Proprietor
Supreme Fabricators & Engineers
Y-13/3, Loha Mandi,
Naraina, New Delhi-110028 ......Defendant no. 2
Date of institution of suit : 30.10.2018
Date of final arguments : 03.01.2025
Date of Judgment : 10.01.2025
Plaintiff represented by Col. Mr. Ajay Gupta.
Defendant represented by Col. Mr. Pradeep Murria
Digitally signed
by RAVINDER
RAVINDER BEDI
BEDI Date: 2025.01.10
15:22:12 +0530
_________________________________________________________________________________
CS (COMM) No. 197/2018 Page no. 1/ 29
S.N Overseas v M/s Supreme Fabrics
JUDGMENT
1. Present is a suit instituted by Plaintiff seeking recovery of an amount of Rs.7,77,078/- alongwith interest @15% pendentelite and future against the Defendants.
2 (a) It is necessary to take note of the material facts as mentioned in the Plaint. Plaintiff is a Proprietorship Firm with its office at Naya Bazar, Delhi and Mr Nitish Narula is the Proprietor of the Firm. Plaintiff is engaged in the business of export and trading of rice, paddy and cereals at the mutual agreed prices to customers. Defendant no.1 is a Proprietorship firm engaged into the business of trading of clothes and fabrics.
(b) Defendant no.1 had approached the Plaintiff through common acquaintance and CA Mr Anil Chopra in the month of April, 2017 at Plaintiff's office at Naya Bazar for purchase of A-Grade quality of paddy. After negotiations between parties, Plaintiff supplied the said material to Defendant no.1 and raised the Invoice no. 403 dated 17.04.2017 for an amount of Rs. 6,34,350/-. The material was duly received by Defendant no.1, who issued a cheque no. 290204 dated 04.05.2017 drawn upon Canara Bank, Parliament Street in favour of Plaintiff as part payment for the material supplied by Plaintiff. However, Digitally signed RAVINDER by RAVINDER BEDI BEDI _________________________________________________________________________________ Date: 2025.01.10 15:22:19 +0530 CS (COMM) No. 197/2018 Page no. 2/ 29 S.N Overseas v M/s Supreme Fabrics Defendant no.1 requested the Plaintiff to not encash the same as he was in financial difficulty.
(c) Subsequently, Defendant no.1 kept requesting the Plaintiff to wait till further instructions. Defendant thus managed to keep the Plaintiff waiting till the validity period of cheque expired. Defendant failed to make payment to Plaintiff against sale of paddy.
(d) Plaintiff made several demands and reminders requesting Defendant no.1 to pay the amount, however the Defendant no.1 kept assuring the Plaintiff. The Plaintiff served a Legal Notice dated 10.09.2018 upon Defendant no.1 asking for recovery of amount alongwith interest. The said notice however went unresponded by Defendant.
(e) Both Defendants withheld the payments illegally and unjustfully. The defendants are jointly and severally liable to pay the outstanding dues. Plaintiff by this suit has prayed for recovery of outstanding dues of Rs.6,34,350/- against the Invoice no. 403 dated 17.04.2017 alongwith interest @ 15% per annum against Defendant.
(f) Plaintiff approached Pre-Institution Mediation as per Section 12 A of The Commercial Courts Act, 2015 (hereinafter referred to as The CC Act) but Defendant did not appear and this resulted in issuance of a Digitally signed RAVINDER by RAVINDER BEDI BEDI Date: 2025.01.10 _________________________________________________________________________________ 15:22:27 +0530 CS (COMM) No. 197/2018 Page no. 3/ 29 S.N Overseas v M/s Supreme Fabrics Non-Starter Report. Plaint avers that the subject matter of the suit falls within category of "commercial dispute", as provided under Section 2(1)
(c)(i) of The Commercial Courts Act, 2015.
3. Pertinently, the suit was filed by Plaintiff only against Defendant M/s Supreme Fabrics. During pendency, applicant Mr Rajesh Gulati filed an application for his impleadment as necessary party stating that he was the Proprietor of M/s Supreme Fabricators and Engineers and Mr Praveen Gulati (earlier impleaded as sole Defendant) had nothing to do with the firm M/s Supreme Fabricators and Engineers. The application of Defendant Sh. Rajesh Gulati was allowed by Order dated 17.03.2021 of Ld. Predecessor. Plaintiff filed the amended Plaint on 26.02.2022 impleading Mr Rajesh Gulati alongwith Defendant no.1 M/s Supreme Fabrics.
4. Joint written statement was filed by Defendants Mr Rajesh Gulati and Mr Praveen Gulati, wherein certain c preliminary objections were raised by them to the suit inter alia :
(i) the Plaintiff did not approach the Court with clean hands and had suppressed material facts. The Plaintiff had filed a case against M/s Supreme Fabrics, whereas Mr Rajesh Gulati was the proprietor of M/s Supreme Fabricators and Engineers and had no concern with the alleged M/s Supreme Fabrics which was a non-
existing entity. The suit was hit by mis-joinder and non joinder of Digitally signed by RAVINDER RAVINDER BEDI BEDI Date: 2025.01.10 _________________________________________________________________________________ 15:22:35 +0530 CS (COMM) No. 197/2018 Page no. 4/ 29 S.N Overseas v M/s Supreme Fabrics necessary parties as Mr Praveen Gulati had no role whatsoever with the Firm named M/s Supreme Fabrics.
(ii) the Defendants denied that they had ever approached the Plaintiff for purchase of any paddy or rice as alleged. The defendants were engaged in the business of iron/scrap material under M/S Supreme Fabricators and Engineers and there was no question of entering into commercial transaction as alleged by Plaintiff for purchase of paddy or rice.
(iii) Mr Rajesh Gulati had never dealt with Plaintiff for purchase of rice at any point of time. The Invoice relied by Plaintiff was forged and fabricated one. The signature of Mr Rajesh Gulati on the Invoice were forged and it was raised against the Firm, which had no concern either with Mr Rajesh Gulati or with Mr Praveen Gulati.
(iv) the suit was without any cause of action and was filed to harass the Defendants. The Invoice was forged and manipulated and at no point, Defendants ever purchased any such material from Plaintiff. The Invoice relied by the Plaintiff was raised against the firm which had no relation either with Mr Rajesh Gulati or Mr Praveen Gulati. The suit was filed by Plaintiff at the instance of Digitally signed by RAVINDER RAVINDER BEDI BEDI Date: 2025.01.10 _________________________________________________________________________________ 15:22:42 +0530 CS (COMM) No. 197/2018 Page no. 5/ 29 S.N Overseas v M/s Supreme Fabrics some other with whom the Defendants were in litigation i.e. two complaint cases under section 138 of NI Act were pending trial in the Court of Ld. MM, South East, Saket and thus was not maintainable.
(vi) this Court had no territorial jurisdiction as no part of cause of action arose within the territorial jurisdiction of Central Delhi. The Defendants had their work place at Naraina, Delhi and no supplies were ever received from Plaintiff; thus as per Section 20 CPC, this Court had no jurisdiction.
5. On merits, the Defendants contended that the suit was filed by Mr Nitish Narula without any document on record showing him as the Proprietor of M/s S.N Overseas. The Defendants denied about the factum of transaction of purchase of rice and paddy and contended that the suit was filed on the wrong facts. Sh. Praveen Gulati was shown as Proprietor of M/s Supreme Fabrics, though he had no role or relation with Firm M/s Supreme Fabrics. The Defendants further denied of the service of Legal Notice upon them and contended that the Legal notice too suffered from defects as the same was issued upon the non existing entity and the person, who had no relation with the said firm.
6. In Replication, Plaintiff reiterated his version in the plaint while refuting the contentions of Defendant. By Order dated 27.07.2023, Digitally signed by RAVINDER RAVINDER BEDI BEDI Date: 2025.01.10 _________________________________________________________________________________ 15:22:50 +0530 CS (COMM) No. 197/2018 Page no. 6/ 29 S.N Overseas v M/s Supreme Fabrics Ld. Predecessor settled the following issues for adjudication :-
Issue no.1 Whether this Court does not have the territorial jurisdiction to try and entertain this suit? OPD Issue no.2 Whether the defendants have never purchased any goods from the Plaintiff and the invoices are manipulated? OPD Issue no. 3 Whether the suit is liable to be dismissed for want of cause of action? OPD Issue no. 4: Whether the suit of the Plaintiff is bad for non-
joinder and mis-joinder of the parties? OPD Issue no. 5: Whether the Plaintiff is entitled to recover the suit amount of Rs. 7,77,078/- if so, from which defendant? OPP Issue no.. 6: Whether the Plaintiff is entitled to recover any interest, if so, at what rate and for which period? OPP Issue no. 7: Relief.
7. Plaintiff in order to prove its case examined the sole witness i.e. Proprietor Mr Nitish Narula as PW-1, who tendered his affidavit as Ex. PW1/A. PW-1 also proved the Challans dated 12.09.2014 for DVAT issued by Department of Trade and Taxes and GNCTD and Form DVAT-
Digitally signed
RAVINDER by RAVINDER
BEDI
BEDI Date: 2025.01.10
15:22:57 +0530
_________________________________________________________________________________ CS (COMM) No. 197/2018 Page no. 7/ 29 S.N Overseas v M/s Supreme Fabrics 04 dated 12.09.2014 filed alongwith suit are Ex. PW1/1 and Ex.PW1/2; Invoice no. 403 dated 17.04.2017 for Rs. 6,34,350/- as Ex. PW1/3; Cheque bearing no. 290204 dated 04.05.2017 drawn upon Canara Bank, Parliament Street, New Delhi issued by Defendant no.1 to PW-1 as Ex. PW1/4; Statement of Account as Ex. PW1/5,; Computer generated copy of Legal Notice dated 10.09.2018 as Ex. PW1/6; postal receipt of Legal Notice as Ex. PW1/7; Internet generated postal tracking report as Ex. PW1/8, Certificate under Section 63 of BSA,2023 as Ex. PW1/9.
8. Defendant to prove his case examined Mr Praveen Gulati as DW-1, who tendered his evidence by way of affidavit Ex. DW1/1 and proved his Aadhar card as DW1/A.
9. I have heard Ld. Counsel for parties, looked into written arguments and perused the entire record meticulously in the light of relevant statutory provisions of law. My issue wise findings are as under :-
Issue no.1 Whether this Court does not have the territorial jurisdiction to try and entertain this suit? OPD
10. The onus of proving the issue was upon the Defendants. It is the plea of Defendants that no such transaction ever happened between parties as Defendants had their work place at Naraina, New Delhi and Digitally signed RAVINDER by RAVINDER BEDI BEDI Date: 2025.01.10 _________________________________________________________________________________ 15:23:08 +0530 CS (COMM) No. 197/2018 Page no. 8/ 29 S.N Overseas v M/s Supreme Fabrics Faridabad, Haryana which did not fall within the territorial jurisdiction of this Court. It is further the plea of Defendants that D-1 did not approach the plaintiff at Naya Bazar office of Plaintiff and the territorial jurisdiction of this Court was invoked on incorrect facts. It is further pleaded that merely because the plaintiff had its office at Naya Bazar, Delhi, the same was not a ground to invoke jurisdiction as per Section 16 to 20 of CPC.
11. Ld. Counsel for Plaintiff referred to para no. 14 of Plaint and argued that material was sold to Defendant at Naya Bazar office of Plaintiff and negotiations were also done at said office, which falls in the territorial jurisdiction of this Court.
I observe that no evidence has been led by either party in support of the issue. Furthermore, as per Plaint, the negotiations were held between parties for the purchase order at Plaintiff's office at Naya Bazar, giving rise to part cause of action in favour of plaintiff. Thus, the issue stands decided against Defendants and in favour of Plaintiff.
Issue no.2 Whether the defendants have never purchased any goods from the Plaintiff and the invoices are manipulated? OPD Issue no. 3 Whether the suit is liable to be dismissed for want of cause of action? OPD Digitally signed RAVINDER by RAVINDER BEDI BEDI Date: 2025.01.10 15:23:15 +0530 _________________________________________________________________________________ CS (COMM) No. 197/2018 Page no. 9/ 29 S.N Overseas v M/s Supreme Fabrics Issue no. 4: Whether the suit of the Plaintiff is bad for non-
joinder and mis-joinder of the parties?PD
12. The onus to prove these issues was upon the Defendants. The stand of Defendants was that a wrong case was filed by Plaintiff against Defendants as Defendants were into the business of iron/scrap material. Plaintiff failed to file or prove that Defendants were into business of trading of clothes and fabrics as alleged in plaint. Further, there was not a single commercial transaction ever entered into by them with plaintiff and the case was based upon one Invoice for alleged sale of paddy just to harass Defendants.
13. Defendants examined Mr Praveen Gulati, Director of M/s Gulati India Sales P. Ltd as DW-1. The DW-1 deposed on the lines of the defence taken in the written statement and stated that he was a scrap dealer and in his entire life, he had not dealt with paddy/rice/grains business. DW-1 stated that as per MOA and Articles of Association, his company M/s Gulati India Sales P. Ltd was dealing with scrap/steel trading and metal fabrication and was operational at the stated address. No firm named M/s Supreme Fabrics as alleged by Plaintiff was ever operational from this address of Y-13/3, Loha Mandi, Naraina. DW-1 further stated that the accounts of company with Canara Bank and ledger account demonstrated that no such transaction was ever entered into with Digitally signed by RAVINDER RAVINDER BEDI BEDI Date: 2025.01.10 15:23:23 +0530 _________________________________________________________________________________ CS (COMM) No. 197/2018 Page no. 10/ 29 S.N Overseas v M/s Supreme Fabrics Plaintiff at the relevant time. DW-1 stated that D-2, who was his brother had another Firm M/s Supreme Fabricators and Engineers with its place of work at Faridabad, Haryana. DW-1 stated that the Invoice relied upon by Plaintiff was fabricated as the same was raised against the Firm, having no relation with either of the Defendants.
14. In cross-examination, DW-1 while reiterating his stand stated that Defendants were into business with one Firm named Multimarine Model P Ltd. Badarpur, with whom certain disputes arose which had resulted into litigation with the said Firm in respect of certain cheques for supply of Containers by them. DW-1 stated that the Plaintiff had filed the instant suit in collusion with the said rival Multimarine Model P Ltd. Badarpur, based upon one single alleged cheque, which was amongst those issued to the said Firm in year 2012 and was somehow procured by Plaintiff and was misused by filing this suit.
15. PW-1 Mr Nitish Narula, AR for Plaintiff Firm deposed on the lines as in the plaint and stated that A-Grade quality of paddy was sold to Defendant against the Invoice Ex. PW1/3.
16. In cross-examination, PW-1 stated that he had studied upto 12th standard and was Proprietor of Plaintiff Firm since the year 2014. PW-1 stated that he could not recollect the date, month or year of his visit Digitally signed RAVINDER by RAVINDER BEDI BEDI Date: 2025.01.10 _________________________________________________________________________________ 15:23:32 +0530 CS (COMM) No. 197/2018 Page no. 11/ 29 S.N Overseas v M/s Supreme Fabrics to the work place of Defendant no.1/M/s Supreme Fabrics. As per his information, M/s Supreme Fabrics was running from Y-13/3, Loha Mandi, Naraina and he was informed about the same only by his CA Mr Anil Chopra. The relevant extract of PW-1 in his cross-examination is as follows :
" I do not have any purchase order, visiting card and any other document to show that I had entered into any deal with M/s Supreme Fabrics. Vol. Mr Anil Chopra came into my office alongwith Mr Praveen Gulati. Mr Praveen Gulati required rice and same was supplied by me to him. I cannot recollect the date of visit of Mr Praveen Gulati alongiwth Mr Anil Chopra to my shop. Vol. However they had visited on the same day on which the cheque Ex. PW1/4 was issued by Mr Praveen Gulati to me."
17. To the Invoice Ex. PW1/3 also, PW-1 admits that he does not know as to who had signed the same. PW-1 in xxx-examination stated as :
" .... There were no rules for e-way bills in 2017. Q:- Do you have any document to show delivery of goods from Delhi to Ahmedabad against Invoices Ex. PW1/DB? Ans: No It is wrong to suggest that all the 09 invoices Ex. PW1/DB are fake documents as deliberately the number of Andhra Digitally signed RAVINDER by RAVINDER BEDI BEDI _________________________________________________________________________________ Date: 2025.01.10 15:23:41 +0530 CS (COMM) No. 197/2018 Page no. 12/ 29 S.N Overseas v M/s Supreme Fabrics Pradesh trucks have been given in order to create false transactions.
I am not aware if M/s Supreme Fabrics did not carry on any business from Y-13/3, Lohamandi, Naraina, New Delhi after 1994. I have no knowledge whether M/s Supreme Fabrics is working from Faridabad after 1994.
It is correct that I had lodged one complaint at Mohali, Punjab regarding threats advanced to me and Mr Praveen Gulati was named as one of the suspects..."
18. PW-1 feigns his ignorance as to who had received the material on behalf of Defendant or acknowledged the delivery. PW-1 stated that rice/paddy was taken directly from Plaintiff's godown. PW-1 does not know as to who signed as "Rajesh" on the Invoice Ex. PW1/3. PW-1 also cannot tell the employee who was present when goods were delivered on 17.04.2017. PW-1 admits that he had no acknowledgment of receipt of material. PW-1 during his further cross on 31.01.2024 brought nine more Invoices Ex. PW1/DB raised upon other buyers. However, he admitted that none of these Invoices had any acknowledgment of receipt of material from customers/buyers. PW-1 admitted that all Invoices Ex. PW1/DB were issued only to one customer i.e. M/s Jagat Agrotech and were all photocopies without any requisite Certificate of 63 of BSA. PW- 1 admits that the balance sheet annexed with ITR did not bear any stamp Digitally signed by RAVINDER RAVINDER BEDI BEDI Date: 2025.01.10 15:23:47 +0530 _________________________________________________________________________________ CS (COMM) No. 197/2018 Page no. 13/ 29 S.N Overseas v M/s Supreme Fabrics or authentication nor the same reflected anything showing delivery of goods as per 09 Invoices.
19. On the point of delivery of 21 tonnes of rice/ material to Defendants, PW-1 in his xxx-examination stated as :
" ... I was not present at my warehouse when the goods were dispatched. I do not remember the date, month and year when the goods in question were dispatched. I do not remember the date, moth and year when the goods in question were dispatched. I cannot tell the registration number of the vehicle which was used to transport the goods in question. I do not know the name, address and phone number of the truck driver or even the name of the transporter.
I cannot tell the name of my employee who had accompanied the goods which were transported to the defendant. I do not remember the contact number or address of that employee.
It is wrong to suggest that I am not able to tell the details about driver, transport and the name of my employee and their contact number or details as no such goods were ever supplied to the defendants".
20. Ld. Counsel for Plaintiff argues that the Plaintiff has been successful in proving its case. Ld. Counsel argues that the suit for Digitally signed by RAVINDER RAVINDER BEDI BEDI Date: 2025.01.10 _________________________________________________________________________________ 15:23:55 +0530 CS (COMM) No. 197/2018 Page no. 14/ 29 S.N Overseas v M/s Supreme Fabrics recovery earlier was against Mr. Praveen Gulati, Proprietor of M/s Supreme Fabrics but during pendency, Defendant no. 2 on his application got arrayed as necessary party. Ld. Counsel refers to the cross- examination of PW-1 during which PW-1 was put suggestions, which clearly prove the existence of Firm M/s Supreme Fabrics. Ld. Counsel submits that the existence of M/s Supreme Fabrics is further confirmed from the affidavit of Mr Rajesh Gulati filed alongwith his application under Order 1 Rule 10 CPC seeking his impleadment, showing him as proprietor of M/s Supreme Fabrics and the said affidavit is an admission of Defendants. Reliance is placed on Judgment of Avtar Singh And ors v Gurdial Singh & ors (DOD as 04.12.2006) and Life Insurance Corporation of India v Sanjeev Builders Private Ltd & Anr (DOD as 01.09.2022).
21. Ld. Counsel for Plaintiff submits that the plea of the defendants in respect of the cheque Ex. PW1/4 procured by Plaintiff in a malafide way from some third party is unsupported and uncorroborated in the absence of any single document. Ld. Counsel submits that issuance of cheque by Defendant no.1 proves the transaction of purchase of rice by Defendant.
22. Ld. Counsel for Defendants while refuting the contentions of plaintiff argued that the cheque Ex. PW1/4 did not pertain to any alleged transaction and the same was not encashed by Plaintiff for Digitally the reasons signed by RAVINDER RAVINDER BEDI BEDI Date: 2025.01.10 _________________________________________________________________________________ 15:24:03 +0530 CS (COMM) No. 197/2018 Page no. 15/ 29 S.N Overseas v M/s Supreme Fabrics best known to him. He submitted that the affidavit accompanying application seeking impleadment of D-2 inadvertently mentioned the incomplete name of Firm and being a typographical mistake, could not enure to the benefit of plaintiff. He argued that Plaintiff failed to prove any iota of positive evidence regarding existence of the alleged entity M/s Supreme Fabrics, which was a non-existing entity.
23. Ld. Counsel further argued that Defendant Mr Praveen Gulati was Director of M/s Gulati India Sales Pvt Ltd and Mr Rajesh Gulati was the Proprietor of M/s Supreme Fabricators and Engineers having place of work at Faridabad, Haryana. Ld. Counsel argued that Plaintiff filed a false suit based upon a single forged Invoice raised upon the said non-existing entity and by sending a Legal Notice Ex. PW1/6 upon such entity. Ld. Counsel argued that Defendants had no concern with the Plaintiff nor they had entered into any transaction at any point of time and in the event of such denial, the onus of proof of existence of such entity M/s Supreme Fabrics shifted upon the Plaintiff, which the Plaintiff clearly failed to establish.
24. It was further submitted by Ld. Counsel for Defendants that Plaintiff failed to prove the supply of goods to the Defendants against the Invoice Ex. PW1/3. He argued that the story of the Plaintiff of purchase of 21,000 kilograms of rice by Defendant no.1 on first visit of Defendant no. 1 completely got falsified in the absence of any evidence. He argued Digitally signed by RAVINDER RAVINDER BEDI BEDI Date: 2025.01.10 _________________________________________________________________________________ 15:24:10 +0530 CS (COMM) No. 197/2018 Page no. 16/ 29 S.N Overseas v M/s Supreme Fabrics that by no stretch of imagination could it be believed that Defendant no.1 who as per own case of Plaintiff having no acquaintance earlier with Plaintiff, would have come alongwith CA to Plaintiff's office and finalize the transaction of purchase of rice of 21 tonnes on same day, provide a cheque on the spot and would carry the huge supply of 21 tonnes on the same day without naming any transporter from plaintiff. Ld. Counsel referred to the cross-examination of PW-1 which completely made the case fall flat, when PW-1 failed to tell anything about the alleged transaction or transporter through which the goods were supplied. PW-1 could not even tell the name of Manager or any other employee of parties present at the time of supply. Counsel submits that PW-1 admitted that he did not know when transaction happened or goods were dispatched from the godown/warehouse of Plaintiff or what was the vehicle number of the transporter.
25. A careful analysis of the pleadings and evidence on record would demonstrate that the Defendants took following objections to the claims of Plaintiff :
plaintiff failed to prove the existence of M/s Supreme Fabrics i.e. the alleged buyer of goods.
the Invoice was false and fabricated and not proved as per law.
the suit contained false allegations and no such transaction ever Digitally signed by RAVINDER RAVINDER BEDI BEDI Date: 2025.01.10 _________________________________________________________________________________ 15:24:18 +0530 CS (COMM) No. 197/2018 Page no. 17/ 29 S.N Overseas v M/s Supreme Fabrics happened between parties plaintiff failed to prove delivery of goods or transaction in question between parties.
Appraisal of evidence and Findings
26. I have elaborately dealt with rival pleas and appraised the testimony of parties. Primarily, the submission of Advocate for Plaintiff is that Defendants did not come up with any evidence to disprove the case and to establish their pleas.
27. The issue for determination in the suit filed by Plaintiff based on the Invoice is not whether the Defendants failed to disprove the case or admitted the cheque in question. The issue here is as to whether the Plaintiff was able to prove the transaction of purchase by Defendants and supplies of 21 tonnes of rice made by Plaintiff on raising of bill pursuant to oral Purchase Order from Defendants, which all happened on a single day.
28. As per Section-101 of The Indian Evidence Act, plaintiff must prove the existence of legal right in his favour. Thus the onus is on the Plaintiff to positively establish its case on the basis of material available. Plaintiff cannot rely upon the weakness or absence of defence Digitally signed RAVINDER by RAVINDER BEDI BEDI Date: 2025.01.10 _________________________________________________________________________________ 15:24:26 +0530 CS (COMM) No. 197/2018 Page no. 18/ 29 S.N Overseas v M/s Supreme Fabrics to discharge this onus. Once the Plaintiff discharges that onus and makes out a case which entitles him to a relief, then the onus shifts to the defendant to prove those circumstances, if any, which would disentitle the Plaintiff to the same.
29. To appreciate the respective contentions, it would be apposite to refer to the claim of plaintiff, which is based upon Invoice Ex. PW1/3 on which plaintiff is stated to have sold the material to defendant. A perusal of evidence would bring out that Plaintiff failed to come up with any evidence as to whether there was any business transaction between parties. The Plaintiff failed to establish whether there existed any entity named M/s Supreme Fabrics, with whom Plaintiff entered into transaction on same day, when he was approached by D-1 through CA Mr Anil Chopra. As noticeable, the Plaint mentions the Defendant no. 1 being engaged in business of clothes and fabrics. There is nothing in support of the same having proved by plaintiff on record.
30. The Plaint is blissfully silent as to mode or manner of delivery of goods to Defendant. It is silent as to how the material worth 21 tonnes was delivered to the Defendant or on which date, the cheque was issued by Defendant no.1. It was only in evidence that PW-1 stated that the cheque was issued on the same day simultaneously with purchase of material by Defendant no.1 i.e. on 17.04.2017. In entire pleadings as Digitally signed by RAVINDER RAVINDER BEDI BEDI Date: 2025.01.10 15:24:35 +0530 _________________________________________________________________________________ CS (COMM) No. 197/2018 Page no. 19/ 29 S.N Overseas v M/s Supreme Fabrics well as in the evidence led, the Defendants took the coherent stand and denied the existence of M/s Supreme Fabrics and further denied of receipt of any goods against any Purchase Order or supply to them pursuant to any transaction. In view of the denial of any such business relationship, the onus got shifted upon Plaintiff to prove such transaction and the delivery to Defendant.
31 The denials being taken at the very outset; the Plaintiff had to prove that the Invoice in question was raised against any Purchase Order placed by the entity M/s Supreme Fabrics. Plaintiff clearly failed to establish that the supplies were made to Defendants or where the material was destined/dispatched. The deposition of PW-1 itself demonstrate that Plaintiff failed to depose on all material facts including the fact of any alleged entity M/s Supreme Fabrics running from Y-3/13, Loha Mandi, Naraina, Delhi.
32. Plaintiff had to stand on his own legs and to prove his case by adducing sufficient evidence in respect of the supply of goods pursuant to any Purchase Order of Defendants. Mere raising of the Invoice and showing it in statement of account Ex. PW1/5 would not suffice on behalf of Plaintiff without establishing any delivery of such goods under the Invoice in question. There is no evidence to establish that there was any acknowledgment of the Invoice by defendants, or to the goods were delivered to defendants on same day.. There is no Digitally signed by RAVINDER RAVINDER BEDI BEDI Date: 2025.01.10 15:24:41 +0530 _________________________________________________________________________________ CS (COMM) No. 197/2018 Page no. 20/ 29 S.N Overseas v M/s Supreme Fabrics contemporaneous letter or document to prove that Plaintiff ever expressed his grievance with defendants that the outstanding amount was due from the defendants to the plaintiff against Invoice in question. The plaint, Legal Notice Ex. PW1/6 or the witnesses nowhere mention about the mode of delivery/transportation or date of delivery. The Plaint seems to be the reproduction of Ex. PW1/6 in almost verbatim mode.
33 Hon'ble High Court of Delhi in the case of Harish Mansukhani v. Ashok Jain in RFA 4/2008 decided on 19.11.2008 has observed as follows :
"....In respect of no proof being with the plaintiff by way of acknowledgment from the side of the defendant pertaining to receipt of the bills Ex.PW1/2 or the goods there-under, in harmony with the pleadings in the plaint, PW-1 deposed that due to cordial relationship and there being goodwill between the parties, the precaution of obtaining signatures of the defendant or its representative on the bills or when goods were delivered was not observed. However, PW-2 Mr. Rakesh the field officer of the plaintiff, examined as PW-2, deposed to the effect:-....
....In this connection it assumes importance that there is no evidence acknowledging receipt of the bills by the defendant as also that there is no evidence to establish RAVINDER Digitally signed by RAVINDER BEDI BEDI Date: 2025.01.10 _________________________________________________________________________________ 15:24:49 +0530 CS (COMM) No. 197/2018 Page no. 21/ 29 S.N Overseas v M/s Supreme Fabrics that the goods covered by the bills were at all delivered to the defendant or any third party to whom the defendant allegedly directed delivery to be made.
XXX XXX XXX
...Thus, normal prudent business conduct of
acknowledging delivery of goods ought to have been followed and there being no evidence of the same, the probability would be that no goods were supplied to any third party at the asking of the defendant. As per the testimony of PW-2 the services of a transporter was engaged to deliver the goods to third parties outside Delhi. The said transporter to whom freight must have been paid has not been examined...."
34. Hon'ble High Court of Delhi in the case of Kusum Kund Durga v Kalra Papers (P.) Ltd. in RFA No. 16/2004 decided on16.02.2012 observed as follows :
".....The first defence was that with respect of five bills, exhibited before the trial Court during the cross examination of the witness of the appellant/defendant, as Ex.DW1/PX1 to Ex.DW1/PX5, no goods were supplied and in fact these were fake bills....
Digitally signed
RAVINDER by RAVINDER
BEDI
BEDI Date: 2025.01.10
15:24:56 +0530
_________________________________________________________________________________ CS (COMM) No. 197/2018 Page no. 22/ 29 S.N Overseas v M/s Supreme Fabrics ....This I say so because not only these bills, Ex.DW1/PX1 to Ex.DW1/PX5, were not proved by any affirmative evidence led by the respondent/plaintiff but also even in the cross examination of the DW-1 when these bills were confronted to the witness they were not admitted, and in fact it was stated that these disputed bills do not bear the signatures or the initials of any of the employees of the respondent/plaintiff. Therefore, these documents cannot be said to have been proved and hence cannot be referred to....
....Finally, no one from the postal department was summoned to prove the service of legal notice although the appellant/defendant had denied the receipt of the legal notice.
It was further held in Kusum Kund (supra) as follows:-
".....With this small preface, let me turn to the issues on merits. The first issue is with respect to whether the respondent/plaintiff supplied goods to the appellant/defendant which are covered under the bills, Ex.DW1/PX1 to DW1/PX5.
.... mere proving of the bills would not means that there is proof of actual delivery of goods under these disputed five bills. Delivery is an aspect which had to be specifically Digitally signed by RAVINDER RAVINDER BEDI BEDI Date: 2025.01.10 _________________________________________________________________________________ 15:25:04 +0530 CS (COMM) No. 197/2018 Page no. 23/ 29 S.N Overseas v M/s Supreme Fabrics proved by the respondent/plaintiff once the receipt of goods under these bills was disputed. Even assuming the delivery challans were not required to be filed, surely there can be other evidences such as dispatch registers, gate passes and so on....
....Surely, a person who sells the goods, such as the respondent/plaintiff, will definitely in addition to the alleged bills showing supply, would have its own dispatch registers, books of account and various other documents to show actual dispatch of goods. The Plaintiff however chose not to file any copies of any books of account, goods registers or copies of its dispatch register etc. to show the dispatch/delivery of goods under the disputed bills to the appellant/defendant....
XXX XXX XXX
....In view of the above, I hold that the
appellant/defendant had proved its case that no goods were supplied under the disputed bills, Ex.DW1/PX1 to Ex.DW1/PX5...."
35. Coming to another aspect of the matter which is the Statement of Account/Ledger (Ex.PW1/5) proved by Plaintiff on record. The same demonstrates only one entry from 01.04.2017 to 31.03.2018 and the same is incomplete in its nature. Ex. PW1/5 is not supported or Digitally signed by RAVINDER RAVINDER BEDI BEDI Date: 2025.01.10 15:25:13 +0530 _________________________________________________________________________________ CS (COMM) No. 197/2018 Page no. 24/ 29 S.N Overseas v M/s Supreme Fabrics corroborated by any bank account, books of accounts or dispatch registers. Even otherwise, the ledger by itself is not the proof of transactions. No liability can be fastened on the basis of entries in the ledger alone unless, it is corroborated by some other evidence. In Jay Ambe Industries Proprietor Shri Dinesh Kumar Bajranglal Somani Vs. Garnet Speciality Paper Ltd. 2002 SCC Online Guj 2258, it was held as :
" 25. The proposition laid down in authorities about the admissibility of ledger without the corroborative evidence being led in support of the entries in the ledger cannot be disputed. It is well settled that a ledger, though an account book, has no evidentiary value unless the entries made therein are proved by independent evidence which, in other words, would mean that there must be corroboration of entries which corroboration can be supplied by proving the transaction or by proving the entries in the Daily Cash book of Roznama. Without corroboration, entries in the ledger cannot be brought within the purview of section 34 of the Evidence Act."
36. Reliance may be placed upon the decisions in the matter of 'Harish Mansukhani Vs. Ashok Jain (DOD as 19.11.2008 by DB of Hon'ble Delhi High Court) and Civil Appeal before Apex Court as 664/2012 titled as Ashok Jain V. Harish Mansukhani (DOD as 03.09.2019), wherein it was held that plaintiff had only produced ledger Digitally signed by RAVINDER RAVINDER BEDI BEDI Date: 2025.01.10 15:25:20 +0530 _________________________________________________________________________________ CS (COMM) No. 197/2018 Page no. 25/ 29 S.N Overseas v M/s Supreme Fabrics account and that by itself could not be a proof of Accounts.
In Shree Sanyeeji Sponge and Alloys Ltd. V. Parmeshwar Lal Saraf 2014 SCC Online Cal 13844 it was held that in the absence of the seal on delivery challan, the doubts were cast on validity of raised bills. Reliance can be further placed upon Millennium Steel India Pvt. Ltd. V. Ind Barath Energes (thoothukud) Lt. Madras High Court, 2021 SCC Online Mad 2611 wherein the issues were whether alleged transactions between parties took place and whether plaintiff provided sufficient evidence to prove delivery of goods to defendant. The suit was dismissed as plaintiff failed to prove delivery of goods. In yet another decision of Bipp System Ltd. V. Tata Infotech Ltd. (RFA 69/2023), Hon'ble Delhi High Court held that plaintiff failed to prove the supply of goods. Similar is the ratio in Santokh Dhunna V. Nitesh Kumar 2023 SCC Online Del 8045 wherein the essential fact of suppliance of machinery by plaintiff to defendant could not be established.
37. The delivery of goods was an aspect which was to be specifically proved by plaintiff, once the Invoice of goods was disputed by defendants. A person who sells the goods to a party in addition to Invoice, has his books of accounts, dispatch registers and many other documents to show the actual dispatch of goods. The ledger produced by the Plaintiff Ex. PW1/5 has only 01 entry. The same is not sufficient to fasten any liability, unless the same was corroborated by some other Digitally signed RAVINDER by RAVINDER BEDI BEDI Date: 2025.01.10 15:25:27 +0530 _________________________________________________________________________________ CS (COMM) No. 197/2018 Page no. 26/ 29 S.N Overseas v M/s Supreme Fabrics evidence like i.e. dispatch register, goods register, transporter's evidence/freight charges record etc. to prove delivery of goods. Plaintiff did not adduce evidence in form of VAT or Bilti (consignment note/way- bill) etc showing such delivery nor bring any evidence supporting transportation of goods to Defendants by examining any witness.
38. I hold that the Defendants have established that they never purchased the goods from Plaintiff against the Invoice Ex. PW1/3 and the suit was without any cause of action. The issues stand decided in favour of Defendants and against the Plaintiff.
Issue no. 5: Whether the Plaintiff is entitled to recover the suit amount of Rs. 7,77,078/- if so, from which defendant? OPP Issue no.. 6: Whether the Plaintiff is entitled to recover any interest, if so, at what rate and for which period? OPP
39. The onus of proving these issues was upon Plaintiff. It is dealt with and observed in Issue no. 2, 3 and 4 that the Plaintiff utterly failed to establish its case. PW-1 failed to depose on all material facts and stated that he did not have any purchase order, visiting card or any other document to show that he had entered into such transaction with the alleged M/s Supreme Fabrics. PW-1 failed to remember the date of visit Digitally signed by RAVINDER RAVINDER BEDI BEDI Date: 2025.01.10 15:25:35 +0530 _________________________________________________________________________________ CS (COMM) No. 197/2018 Page no. 27/ 29 S.N Overseas v M/s Supreme Fabrics of Defendant no.1 to his shop at Naya Bazar. PW-1 admitted that he had no document showing the availability of huge amount of rice at his godown in April, 2017. PW-1 sought an adjournment for producing such documents but failed to bring any such record. PW-1 instead brought couple of Invoices in xerox form without any Certificate under Section 63 of BSA. PW-1 candidly admitted that none of the xerox of these Invoices pertaining to other parties bore any stamp or authentication and these were all computer generated documents. These cannot be considered or read in evidence in view of the settled ratio of law decided by Hon'ble Apex Court in Judgment dated 14/07/2020 in Arjun Panditrao Khotkar vs Kailash Kushanrao Gorantyal [ (2020) 7 SCC 1]..
40. PW-1 feigned his ignorance about the work place/address of alleged M/s Supreme Fabrics. He admitted that Invoice Ex. PW1/3 was not signed by anyone in his presence and he could not tell about any "Rajesh" written thereupon. PW-1 does not remember as to when the material was dispatched or what was the vehicle or its number through which goods were transported.
41. Plaintiff failed to show the nature of transaction, whether it was done on cash or credit basis as per business practice, nor it is clear whether the account was current, open, mutual or non-mutual account as Plaintiff failed to bring his statement of Account for the relevant year.
Digitally signed by
RAVINDER RAVINDER BEDI
BEDI Date: 2025.01.10
15:25:43 +0530
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42. Considering the overall appraisal of the record and following the ratio of Hon'ble Delhi High Court in Santokh Dhunna (supra); Harish Mansukhani (supra); Millennium Steel India Pvt. Ltd. (supra) and Bips Systems Ltd. (supra), plaintiff has failed to establish his claim of recovery against the Invoice in question. Also in view of my detailed observations in Issue no. 2,3 and 4, both issues stand answered against the plaintiff and in favor of defendants.
Relief
43. Keeping in view the foregoing discussion and my findings on aforesaid Issues no. 2 to 4, it is held that Plaintiff has failed to establish its case and its entitlement for the reliefs claimed. The suit of the plaintiff stands dismissed. Costs will follow the result in the suit.
Decree sheet of dismissal be prepared and File be consigned to record room after completion of formalities.
Digitally signed
RAVINDER by RAVINDER
BEDI
BEDI Date: 2025.01.10
Announced in open Court 15:25:54 +0530
on 10.01.2025 (Ravinder Bedi)
District Judge (Commercial Court)-12
Central District, Tis Hazari Courts Delhi
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