Delhi District Court
M/S Skl Universal Private Limited vs Raj Kumar Daga on 15 May, 2025
IN THE COURT OF SH. NARESH KUMAR MALHOTRA :
DISTRICT JUDGE (COMMERCIAL)-06
TIS HAZARI COURTS, WEST: DELHI
CS (COMM) No. 112/2024
CNR No. DLWT010007712024
15.05.2025
M/s. SKL Universal Private Limited
The CIN of the company is U34100DL2014PTC268389
Registration No: 07AAUCS6585R1ZX
F-12, Fun Cinema Mall, Moti Nagar,
New Delhi-110015, India
Through its duly authorised Director
Satish Lamba
.....Plaintiff
Vs.
1. Shri Raj Kumar Daga,
Partner, Krishna Steel Trading Company
R/o. DDA-22GF/L/P Kalkaji
New Delhi-110019.
2. M/s. Krishna Steel Trading Company (Partnership)
GST No. 08AASFK4789N1Z5
Khasra No. 226, Village Kaharani,
Alwar, Bhiwadi, Rajasthan-301019
....Defendants.
Date of filing : 29.01.2024
Date of arguments : 14.05.2025
Date of judgment : 15.05.2025
COMMERCIAL SUIT FOR RECOVERY OF Rs. 51,51,696/-
ALONGWITH PENDENTELITE AND FUTURE INTEREST.
JUDGMENT:
1. Vide this judgment, I am deciding the suit for recovery of Rs. 51,51,696/- along with pendentelite and future interest filed by the plaintiff against the defendants. Earlier the present suit was filed against three defendants but vide order dated CS (Comm.) No. 112/2024 -1- 05.07.2024 the name of defendant no. 2 was deleted from the array of parties.
2. The essential facts for disposal of the present suit as per plaint are as that the plaintiff is a company duly registered under the Indian Companies Act having its registered office at F-12, Fun Cinema Mall, Moti Nagar, New Delhi-110015. Plaintiff is also registered as Micro Small and Medium Enterprises bearing No. UDYAM-DL-06-0014967. Mr. Satish Lamba is the Director of the plaintiff company, who is duly authorized vide Board Resolution dated 05.09.2023 to sign, verify, institute and file the present suit against the partnership firm named Krishna Steel Trading Company and represent the plaintiff. The plaintiff is a Commercial Trading concern and in the business of selling Lubricants, bearings, lubricating oil & Greases having GST registration No. 07AAUCS6585R1ZX with principle place of business as SKL Universal Pvt. Ltd., F-12, Fun Cinema Mall, Moti Nagar, New Delhi-110015. It is mentioned that defendant no. 1 is the partner of defendant no. 3. The defendant no. 2 for himself and for the defendants no. 1 & 3 placed orders on the plaintiff for supply of goods. Defendant no. 3 is a partnership firm. For all acts of the firm each partner of the firm is liable jointly and severally for its debts. The defendants have purchased goods as consumables for use of their industry from the plaintiff for many years since the year 2019. It is mentioned that during the course of business, the defendants placed orders for supply of materials i.e. lubricating oils, ball bearings, greases etc. telephonically and in person by the defendant no. 2. They requested the plaintiff to deliver the same at Khasra No. 226, CS (Comm.) No. 112/2024 -2- Village Kaharani Alwar, Bhiwadi, Rajasthan. The plaintiff on the basis of orders received from time to time had been dispatching goods. It is mentioned that for every supply of requisite quantity of goods by the plaintiff company to the defendants, an invoice was raised by the plaintiff company along with GST Tax Invoice and e-way bill and the same were duly accepted and signed by the defendants against endorsement and used and utilized by them. The defendants have been making payments on account and the same are being reflected by the plaintiff in their books of accounts. The plaintiff has maintained its books of accounts in the regular course of business with the defendants. As per the books of accounts of maintained by the plaintiff, a sum of Rs. 47,83,037.83 was due and payable by the defendants to the plaintiff as on 01.04.2022. As per the plaintiff, a sum of Rs. 35,51,696.83 was due towards the defendants as on 01.04.2023. It is mentioned that defendant no. 2 on his behalf and on behalf of defendants no. 1 & 3 had admitted the liability to the tune of Rs. 25,51,096.83 as on 04.04.2023 by Whatsapp message sent to the Director of plaintiff namely Sh. Sumit Lamba on his mobile phone bearing No. 9999996773. As per the plaintiff, defendant made part payment of Rs. 3,00,000/- on 17.04.2023 and Rs. 6,00,000/- as on 10.05.2023 leaving a balance of Rs. 26,51,696/- which is due and payable by the defendants. The plaintiff raised invoices which were accepted by the defendants and defendants are also liable to pay interest @24% per annum on all supplies, if the amount is not paid within 90 days of delivery. The plaintiff has claimed interest on the amount of Rs. 26,51,696/- which comes to Rs. 25,00,000/-. As per plaintiff it is entitled to the amount of Rs. 51,51,696/- as on 31.12.2023. It is CS (Comm.) No. 112/2024 -3- prayed by the plaintiff to pass a decree of Rs. 51,51,696/- in its favour and against the defendants. Plaintiff has also claimed pendentelite and future interest @ 24% per annum.
3. The defendants no. 1 & 3 have filed written statement taking preliminary objections that plaint has not been signed, verified and instituted by duly authorized person. The present suit is not maintainable as same is filed by unauthorized person. There is no privity of contract between the plaintiff and defendant no. 2. The defendant no. 2 is not a partner of defendant no. 3 firm nor he was ever employee of the defendant no. 3. The plaintiff has falsely averred that the defendant no. 2 for himself and on behalf of defendants no. 1 & 3 placed orders for supply of goods. In the plaint, it is not disclosed by the plaintiff in what capacity the defendant no. 2 has been sued in the present case. The account statement placed on record by the plaintiff is a forged and fabricated document, pertains to M/s. Krishna Steel Trading Company and not to the defendant no. 2. It is mentioned that there is no document on record which connects the defendant no. 2 with the defendant no. 3 firm M/s. Krishna Steel Trading Company. This Court has no jurisdiction to try and entertain the present suit as there is no cause of action. The defendant no. 3 is having its office at Plot No. SP-293-296, Phase-4, Chopanki, Bhiwadi Indutrial Area, Rajasthan and on the invoices raised by the plaintiff same address of defendant no. 3 is mentioned, which proves that goods were supplied by the plaintiff to the defendant no. 3 at Bhiwadi, Rajasthan. The defendant no. 3 placed orders with plaintiff at Bhiwadi and the goods were supplied and delivered at Bhiwadi, Rajasthan so this Court has no jurisdiction CS (Comm.) No. 112/2024 -4- to try and entertain the present suit. It is mentioned that premises i.e. Plot No. SP-293-296, Phase-4, Chopanki, Bhiwadi Industrial Area, Rajasthan belongs to M/s. RGTL Industries Limited and this company is under CIRP under insolvency code and the Hon'ble NCLT, New Delhi has appointed an IRP for managing the affairs of this company. The defendant no. 3 took on rent the factory of RGTL Industries Limited from IRP to carry out its manufacturing activities. The officials of the plaintiff approached the officials of defendant no. 3 at Plot no. SP-293-296, Phase-4, Chopanki, Bhiwadi Industrial Area, Rajasthan and offered to supply Lubricating oil and other materials on regular basis to the defendants. After negotiations the payment terms were settled and defendant no. 3 agreed to purchase material i.e. Lubricating oil and other materials from the plaintiff. The officials of the plaintiff started visiting the office of defendant no. 3 at Plot no. SP-293-296, Phase-4, Chopanki, Bhiwadi Industrial Area, Rajasthan to get orders and supplied the ordered materials. It is mentioned that the entire transactions took place at Bhiwadi office of defendant no. 3 and no part of cause of action arose in Delhi. The defendants no. 1 to 3 neither reside nor work for gain within the territorial jurisdiction of this Court. No amount is due and payable by the defendant no. 3 to the plaintiff. The goods i.e. lubricating oil as supplied by plaintiff vide invoice no. GST-47 dated 28.05.2022 and invoice no. GST-82 dated 22.04.2022 were found to be defective and sub-standard and upon use of substandard and defective lubricating oil the furnace machine gear box broke down resulting into stoppage of manufacturing process and the defendant no. 3 firm suffered heavy losses on account of stoppage of manufacturing process. The officials of CS (Comm.) No. 112/2024 -5- the plaintiff were immediately informed about this break down of machinery upon use of defective and substandard lubricating oil supplied by plaintiff and plaintiff told to immediately lift back the defective materials supplied. The officials of the plaintiff came to the factory and inspected the lubricating oil supplied by it and apologized and assured to lift back the defective material but till date they have not removed the same despite repeated telephonic conversations. The goods supplied vide invoice no. GST-47 dated 28.05.2022 and invoice no. GST-82 dated 22.07.2022 were rejected being defective and substandard, so defendant no. 3 is not liable to make payment of these two invoices. As per the defendant, after adjusting the amount of both the invoices, no amount is due and payable by the defendant no. 3 to the plaintiff. The defendant no. 3 in order to carry out repairs and due to stoppage of the manufacturing activity suffered monetary loss. The defendant no. 3 was engaged in the manufacturing and sale of TMT Bars under "Rathi" trade mark and their products were in high demand in the market. The losses suffered by defendant no. 3 is more than Rs. 10 lacs and this loss was caused due to supply of defective and substandard lubricating oil. The defendant no. 3 is filing a separate suit against the plaintiff for recovery of the loss/damages, as the plaintiff has failed to settle the matter despite his assurances. The present suit is bad for mis-joinder of parties.
In reply on merits, it is denied that Sh. Satish Lamba is the Director of the plaintiff company It is denied that Sh. Satish Lamba has been duly authorized to sign, verify and institute the present suit vide the alleged board resolution dated 05.09.2023. It is denied that defendant no. 2 for himself and on behalf of CS (Comm.) No. 112/2024 -6- defendant no. 1 & 3 has ever placed orders with plaintiff for supply of goods. The defendant no. 2 is not a partner of defendant no. 3 firm. It is denied that defendants no. 1 to 3 had business dealings with plaintiff company. As per the defendant, only defendant no. 3 has business dealings with plaintiff. It is admitted that defendant no. 1 is one of the partner of defendant no. 3. It is mentioned that defendant no. 3 purchased lubricating oil and other material from plaintiff. However the goods supplied by plaintiff vide invoice no. GST-47 dated 28.05.2022 and invoice no. GST-82 dated 22.07.2022 were rejected being defective and substandard. In reply on merits, similar averments are made. Dismissal of suit is prayed by the defendants no. 1 & 3.
4. The defendant no. 2 Mr. Saurab Rathi has also filed written statement but as his name is deleted from the array of parties, the contents of written statement filed by the defendant no. 2 are not being mentioned. After deletion of the name of the defendant no. 2, amended memo of parties was filed and defendant no. 3 was impleaded as defendant no. 2.
5. The plaintiff has filed replication to the written statement filed by the defendants no. 1 & 3 and controverted the allegations made in the written statement filed by them and further reaffirmed the averments made in the plaint. Plaintiff has also filed separate replication to the written statement filed by Mr. Saurab Rathi.
CS (Comm.) No. 112/2024 -7-6. On the basis of pleadings of the parties, following issues were framed by this Court on 05.08.2024, which are as under:-
(i) Whether the present suit has been filed by
authorized person ? (OPP)
(ii) Whether this court has territorial jurisdiction to try and entertain the present suit ? (OPP)
(iii) Whether the plaintiff is entitled for recovery of Rs. 51,51,696/- from the defendants, as prayed ? (OPP)
(iv) Whether the plaintiff is entitled to the interest on the amount of Rs. 51,51,696/-, if yes then at what rate and for what period ? (OPP)
(v) Relief.
7. In evidence plaintiff has examined Sh. Satish Lamba S/o Late Sh. Amarnath Lamba as PW-1. This witness has filed affidavit on the lines of plaint. This witness has proved the Board Resolution dated 5.09.2023 as Ex. PW1/1, Copy of certificate of incorporation of SKL Universal Pvt Ltd bearing CIN U34100DL2014PTC2683 89 as Ex. PW1/2, Copy of Udyam Registration Certificate copy from by MSME of SKL Universal Pvt Ltd bearing No. UDYAM DL-06 Department 001467 dated 19.03.2021 as Ex. PW1/3, Copy of GST Registration certificate of SKL Universal Pvt Ltd bearing registration No. 07AAUCS6585R1ZX issued on 08.05.2023 as Ex. PW1/4, Certificate U/s 65-B of Indian Evidence Act as Ex. PW1/5, Ledger account maintained by the plaintiff from 1.4.2020 to 10.05.2023 as Mark-A, Copy of Invoice (No.GST-47) of SKL with Universal Pvt Ltd dated 28.05.2022 as Ex. PW1/7, Copy of e-way bill dated 28.05.2022 No. 761261980540 as Ex.PW1/8, CS (Comm.) No. 112/2024 -8- Copy of invoice (No. GST-82) of SKL with Universal Pvt Ltd dated 22.07.2022 as Ex. PW1/9, Copy of E-way bill No. 751272799601 dated 22.07.2022 as Ex. PW1/10, Interest calculated as per the invoices from 20.12.2020 to 31.12.2023 as Mark -B. This witness is duly cross examined by Ld. Counsel for defendants. In cross examination, this witness has stated that he had formed the plaintiff company in June, 2014. He has stated that the dealing with plaintiff and defendant no.2 were started after June, 2019. He has stated that the plaintiff company has passed Board Resolution to file the present suit against defendant no.2, which Ex. PW1/1. This witness has stated that he has not brought the original minute book. This witness has stated that his company secretary did not intimate Registrar of Companies about passing of resolution Ex. PW1/1. This witness has stated that he cannot tell without seeing the record as to when the agenda for the aforesaid resolution Ex. PW1/1 was prepared. This witness has admitted that he has not placed on record agenda regarding Ex. PW1/1. This witness has stated that he cannot tell when the intimation regarding the passing of Ex. PW1/1 was sent to the directors of plaintiff. This witness has stated that he cannot say if any record regarding giving intimation is being prepared by the plaintiff or not. He has stated that the plaintiff company used to store only bearings at Moti Nagar Office and other goods/material were being stored at Khera Kalan. He has admitted that plaintiff company is storing oil at Khera Kalan. He has stated that the plaintiff company was having dealings with RGTL Industries Ltd before starting dealings with defendant no.2. This witness has stated that he CS (Comm.) No. 112/2024 -9- cannot tell for how many years the plaintiff was having dealings with RGTL. He has admitted that Mr. Saurabh Rathi was director of RGTL Industries and the dealings with RGTL used to take place through Mr. Saurabh Rathi. This witness has stated that he is aware that RGTL Industries is under Insolvency. This witness has voluntarily stated that he has also filed claim against RGTL at NCLT. This witness has stated that he had delivered the goods to the defendant on the address mentioned on the invoices. He has admitted that plot No. SP 293-296, Phase IV, Chopanki Bhiwani Industrial Area, Rajasthan is also the address of RGTL. This witness has voluntarily stated that he can confirm by seeing the record only. He has stated that the defendant No.2 company is also operating from this address. This witness has stated that he has not placed on record any document to show that Mr. Saurab Rathi used to share profit with the defendant no.1. This witness has stated that he had placed on record the document to show that Mr. Saurab Rathi used to place orders with the plaintiff company. This witness has admitted that he knew Mr. Saurab Rathi for the last ten years. He has admitted that Mr. Saurab Rathi was the Director of RGTL Industries Ltd. He has admitted that the RGTL Industries had gone into insolvency. This witness has stated that he had also filed his claim before NCLT against RGTL Industries. He has admitted that Mr. Saurab Rathi used to purchase goods from the plaintiff company being the director of RGTL Industries. He has admitted that Mr. Saurab Rathi is not the partner of Defendant no.2. This witness has stated that he had not placed on record any document to show that Mr. Saurab Rathi had any type of relation with defendant no.2. He has admitted that prior to the dealings with defendant no.2, no CS (Comm.) No. 112/2024 -10- agreement was executed between the plaintiff and defendant no.2. He has admitted that no separate agreement was executed between the plaintiff and defendant no.2 regarding terms and conditions of the transactions. He has voluntarily stated that all the terms and condition were mentioned on the invoices. He has stated that the address bearing no. 43/16, Front Portion adjoining Radio Station Village Kheda Kallan, Delhi 110081 is the office address and godown of the plaintiff company. He has admitted that at point A on Ex.P-9 bears the address of godown and office address of the plaintiff company. He has stated that on every invoice the address where the goods were shipped is clearly mentioned. He has stated that Ex.P-7 bears the signature of the receivers of the goods at point A. He has admitted that Ex.P7 does not bear the signature of defendant no.1 at point A. He has voluntarily stated that the person who was deputed to receive the goods has signed at point A. He has admitted that when the RGTL Industries went into insolvency, the defendant no.2 took on rent the factory from the receiver of the said company for manufacturing its goods using the machinery installed therein.
8. Plaintiff has also examined Sh. Sumit Lamba S/o Sh. Satish Lamba as PW-2. This witness has filed affidavit in evidence Ex. PW-2/A. This witness has proved copy of Whatsapp message as Ex. PW-2/1 and certificate u/s 65-B of Indian Evidence Act as Ex. PW-2/2.
In cross examination , this witness has stated that plaintiff company is dealing with defendant no.2 since 2019. This witness has stated that he was aware that defendant no.2 is partnership firm. He has stated that the defendant no.2 also provided the CS (Comm.) No. 112/2024 -11- details of its partners to the plaintiff company. This witness has stated that he cannot tell the exact date when these documents were provided by defendant no.2. He has stated that the plaintiff company has not filed those documents on record. He has stated that Mr. Raj Kumar Dagga and Mr. Parikh were the partners of defendant no.2. He has stated that this information was provided by defendant no.2 after about one year of the dealings of the plaintiff company with defendant no.2. He has admitted that Saurabh Rathi was not the partner of defendant no.2. He has admitted that defendant no.2 has not given any document to him showing that Mr. Saurabh Rathi will deal on behalf of defendant no.2 with the plaintiff company. He has admitted that defendants had never given any purchase order in writing to the plaintiff. He has admitted that plaintiff and defendants used to interact on phone and through personal meetings. This witness has stated that he cannot say if the plaintiff had sent any letter to the defendant asking for payment. He has voluntarily stated that legal notice was sent by the counsel for plaintiff to the defendant.
9. Plaintiff has examined Sh. Rajesh Shrestha, Asst. Vice President, HDFC Bank, Karol Bagh Branch, New Delhi as PW-3. This witness has proved bank statement of account no. 50200009955832 in the name of SKL Universal P. Ltd. For the period 01.08.2019 to 31.03.2023 as Ex. PW-3/1 (colly). This witness is duly cross examined by Ld. Counsel for defendants. During cross examination, this witness has admitted that he has no personal knowledge about Ex. PW-3/1 and he is deposing on the basis of record.
CS (Comm.) No. 112/2024 -12-10. Plaintiff has also examined Sh. Saurav Rathi S/o Sh. Raj Kumar as PW-4. He has stated that earlier he was working in RGTL Industries and now this company is in NCLT. He has admitted that Resolution Professional is appointed in respect of RGTL Industries, in April, 2019. He has stated that Resolution professional had taken permission from COC members to rent out the property of RGTL Industries. This witness has stated that his mobile number is 8826388888. This witness has stated that he cannot admit or deny if he had sent a whatsapp message from his above mentioned mobile number to the mobile number of Sumit Lamba i.e. 9999996773 on 04.04.2023. This witness after seeing whatsapp message admitted that he has sent this message and this document is Ex. PW2/A. This witness has stated that he has also sent copy of ledger account along with message Ex. PW2/A.This witness has stated that he is not the partner of Krishna Steel Trading Company.
This witness is duly cross examined by Ld. Counsel for defendants. During cross examination, this witness has stated that he had not prepared the statement of ledger account which was sent to the mobile number of Sumit Lamba. This witness has stated that he had never prepared the account of M/s Krishna Steel Trading Company. This witness has stated that he has no personal knowledge if Krishna Steel Trading company had any liability to make any payment to the plaintiff. This witness has stated that he had never dealt on behalf of plaintiff with Krishna Trading Company. He has stated that M/s Krishna Trading Company never gave any authority to him to conduct business on its behalf. This witness has stated that he had taken this ledger/account statement from the official of Krishna Trading and CS (Comm.) No. 112/2024 -13- sent the same to the plaintiff. He has voluntarily stated that Director of plaintiff requested him to sent the statement. He has stated that he does not know if this account statement/ledger account is correct or not. He has admitted that this account statement does not bear stamp of Krishna Trading nor it bears the signature of any official.
11. Plaintiff has also examined Sh. Chunni Lal Jain, S/o Sh. Dharam Chand Jain, Accountant of plaintiff as PW-5. He has filed affidavit in evidence which is Ex. PW-5/A. This witness is duly cross examined by Ld. Counsel for defendants. During cross examination, he has stated that he is working with the plaintiff company for the last twenty years. He has stated that earlier the plaintiff company was in existence in some other name and he was also employee with that company. This witness has stated that he is doing part time account work with the plaintiff company. This witness has stated that he has not filed any document to show that he is working with the plaintiff company. He has admitted that statement of ledger account mentioned by him in the affidavit are not signed by him. He has stated that the same has been downloaded from the software tally. This witness has stated that he used to feed the data of the plaintiff company in the software. This witness has stated that he has not placed on record any document to show that any customer of the plaintiff had given interest @ 24% per annum to the plaintiff. This witness has stated that he is having personal knowledge about the facts mentioned in his affidavit in evidence. This witness has stated that he had worked only in the Account department and CS (Comm.) No. 112/2024 -14- had no personal knowledge regarding the sale and purchase of the plaintiff company.
12. On the other hand, defendants have examined Sh. Mahesh Pareek S/o Sh. Har Narayan Vyas as DW-1. This witness has filed affidavit on the lines of written statement. This witness is duly cross examined by Ld. Counsel for plaintiff. During cross examination, this witness has stated that he and the defendant no.1 are the partners of M/s Krishna Steel Trading Company i.e. defendant no.2. He has stated that the defendant no.2 had never placed orders with the plaintiff. This witness has stated that he knew Mr. Saurav Rathi by face. He has admitted that no debit note was issued in respect of the goods supplied by the plaintiff to defendant no.2. This witness has stated that he has no idea if the defendant no.2 has availed input tax credit on the invoices raised by the plaintiff on defendant no.2. He has voluntarily stated that his accountant can tell. He has admitted that defendant no.2 never used to make any advance payment to the plaintiff. He has stated that the defendant no.2 is having transactions with the plaintiff since the year 2020. He has stated that no payment is due towards the plaintiff. He has admitted that defendant no.2 had made payment of all the goods except the rejected goods. He has admitted that defendant no.2 had not sent any written communication to the plaintiff for lifting of the rejected/defective goods. He has voluntarily stated that it was communicated telephonically to the plaintiff.
13. Defendants have also examined Sh. Shwetabh Sinha, Production Manager, Krishna Oil and Chemical Pvt. Limited as CS (Comm.) No. 112/2024 -15- DW-2. This witness has proved test reports as Ex. DW-2/1 to Ex. DW-2/3. He has stated that these reports bear his signatures at point "A". This witness has stated that he has conducted tests on the lubricating oil, sample of which was brought by the party. This witness has stated that he himself had taken printout of Ex. DW2/1 to Ex.DW2/3 from the computer installed in his office and this computer is under his control.
This witness is duly cross examined by Ld. Counsel for plaintiff. During cross examination, this witness has stated that he is B.Tech (Mechanical Engineer). This witness has stated he is working as a production manager in Krishna Oils and Chemical Pvt. Ltd. This witness has stated that he is working with this company since Nov, 2013. He has stated that the Krishna Oils and Chemicals is manufacturing lubricant coolant grease, diesel exhaust fluid etc. He has stated that there was no commercial transaction between the defendant No. 1 & 2. This witness has admitted that he is not an expert of lubricant and other products but he is having vast experience in this field. This witness has admitted that he is not expert declared/appointed by any government agency.
14. I have heard Ld. Counsels for the parties at length and perused the record carefully.
15. My issue-wise findings are as under:-
16. Issue No. 1- Whether the present suit has been filed by authorized person ? (OPP) CS (Comm.) No. 112/2024 -16- The burden to prove this issue is upon the plaintiff. It is vehemently contended by Ld. Counsel for defendants that plaintiff has placed on record Board Resolution but no minutes book containing the alleged board resolution dated 05.09.2023 has been placed on record. As per Ld. Counsel for defendants, it is mandatory to inform ROC regarding all board resolutions and PW-1 admitted that this board resolution was never sent to ROC. It is also contended by Ld. Counsel for defendants that before any meeting of Board of Directors, its agenda is required to be circulated to all members of the Board. PW-1 had admitted that no such agenda was circulated. As per Ld. Counsel for defendants no board meeting was held on 05.09.2023 and no resolution was passed authorising Satish Lamba to file the present suit. It is contended by Ld. Counsel for defendants that this issue be decided in favour of the defendants and against the plaintiff.
To prove this issue, PW-1 appeared in the witness box and proved Board Resolution dated 05.09.2023 passed by Board of Directors of plaintiff as Ex. PW-1/2. Vide this resolution Sh. Satish Lamba was authorized to file the suit and to give evidence on behalf of plaintiff company. This resolution is signed by both the Directors. PW-1 has stated that his company secretary did not intimate Registrar of Companies about passing of resolution Ex.PW-1/1. As PW-1 has duly placed on record Board Resolution Ex. PW-1/1 authorizing him to file the present suit and PW-1 during cross examination has stated that he cannot tell when the intimation regarding the passing of Ex. PW-1/1 was sent to the Directors of plaintiff. So, it cannot be said that intimation regarding passing of Ex. PW-1/1 was not sent to the Directors of CS (Comm.) No. 112/2024 -17- plaintiff company. Sh. Sumit Lamba other Director of plaintiff also appeared as PW-2 and no suggestion was given by Ld. Counsel for defendants to PW-2 that no intimation regarding authorization of PW-1/1 was sent to him. Ld. Counsel for defendants has placed reliance on judgment titled as " State Bank of Travancore Vs. M/s. Kingston Computers (I) P. Ltd" passed by Hon'ble Supreme Court of India in CA No. 2014 of 2011. I have perused this judgment but this judgment is not helpful to the defendants. In this judgment, it is held that no resolution was passed by Board of Directors authorizing Mr. Ashok Shukla to sign, verify and file the case but in the present case PW-1 has duly proved Board Resolution Ex. PW-1/1. So, this judgment is not helpful to the defendants. I am of the view that plaintiff is able to prove that present suit has been filed by authorized person. Accordingly, this issue is decided in favour of the plaintiff and against the defendants.
17. Issue No. 2- Whether this court has territorial jurisdiction to try and entertain the present suit ? (OPP) The burden to prove this issue is upon the plaintiff. It is contended by Ld. Counsel for plaintiff that this court has jurisdiction to try and entertain the present suit as goods were supplied from the registered office at F-12, Fun Cinema Mall, Moti Nagar. As per Ld. Counsel for plaintiff part cause of action arose at Moti Nagar office of the plaintiff at New Delhi from where goods were supplied. It is also contended by Ld. Counsel for plaintiff that where no place of payment is specified in a contract, Section 49 of the Contract Act shall be invoked whereby, the principle of "Debtor must seek the creditor" shall be CS (Comm.) No. 112/2024 -18- followed. As per Ld. Counsel for plaintiff cause of action has arisen within the jurisdiction of this Court as per Section 20 CPC, so this court has jurisdiction to try and entertain the present suit.
On the other hand, Ld. Counsel for defendants contends that on the invoices the address of plaintiff is mentioned as Village Khera Kalan, North West Delhi, New Delhi-110082 and goods were supplied at Krishna Steel Trading Company, Plot No. SP 293-296,Phase-4, Chopanki, Bhiwadi Industrial Area, Rajasthan-301019. It is also contended by Ld. Counsel for defendants that on e-Way Bill the place of dispatch is mentioned as North West Delhi, Delhi. So, this court has no jurisdiction to try and entertain the present suit as no cause of action has arisen within the jurisdiction of this Court.
18. In the present case, PW-1 has placed on record certificate of incorporation as Ex. PW-1/2. On this document, the address of plaintiff is mentioned as SKL Universal Private Limited, F-12, Fun Cinema Mall, Moti Nagar, New Delhi-110015, Delhi, India. PW-1 has also proved registration certificate of the plaintiff company as Ex. PW-1/4 and on this document address of principal place of business of plaintiff is mentioned as First Floor, F-12, TDI Fun Republic Mall, Moti Nagar, Moti Nagar Metro Station, Ramesh Nagar, New Delhi, West Delhi, Delhi-110015. The plaintiff in the plaint has categorically mentioned that supplies were made from the office of the plaintiff situated at Delhi to the defendants as per the request made by the defendants. The defendants were to make the payment of the price of the goods supplied at Delhi. As per plaintiff, debtor must seek his creditor. Ld. Counsel for plaintiff CS (Comm.) No. 112/2024 -19- has placed reliance on judgment titled as "Satyapal Vs. Slick Auto Accessories Pvt. Ltd. And Ors." RSA No. 40/2013 passed by Hon'ble High Court of Delhi, wherein, it has been held that "There is no doubt the material was supplied by the plaintiff to the defendants at Bhiwadi, District-Alwar, Rajasthan. The same is clear from the invoice Ex. PW-1/A and Ex. PW-1/B. However, even if the material was delivered at Bhiwadi, District Alwar, Rajasthan it is clear that the material was supplied from the office/factory of the plaintiff situated at Jwala Nagar, Shahdara, Delhi-32 which falls within the jurisdiction of this Court. " In this judgment, it is also held that " It is a well established principle of law that where, under a contract no place of payment is specified, the debtor must seek his creditor and therefore a suit for recovery is maintainable at the place where the creditor resides or works for gain, because a part of the cause of action arises at that place also with the contemplation of section 20(c) of the Code of Civil Procedure". In this judgment, reliance is placed on judgment titled as "State of Punjab v. A.K. Raha" reported as AIR 1964 CALC 418 (DB), wherein, it is held that " ...The general rule is that where no place of payment is specified in the contract either expressly or impliedly, the debtor must seek the creditor, see The Eider (1893) P 119 at p. 136, Drexel v. Drexel. Ltd. V. Surendera Nath Das, ILR (1957) 2 Cal. 8. The obligation to pay the debt involves the obligation to find the creditor and to pay him at the place where he is when the money if payable. The application of the general rule is not excluded because the amount of debit is disputed...".
CS (Comm.) No. 112/2024 -20-19. In the present case, plaintiff has placed on record registration certificate, wherein, the address of principal place of business of plaintiff is mentioned as First Floor, F-12, TDI Fun Republic Mall, Moti Nagar, Moti Nagar Metro Station, Ramesh Nagar, New Delhi, West Delhi, Delhi-110015. PW-1 during cross examination has stated that the plaintiff company used to store only bearings at Moti Nagar office and other goods/material were being stored at Khera Kalan. Reliance can be placed on judgment titled as M/S. AUTO MOVERS vs LUMINOUS POWER TECHNOLOGIES PVT LTD [CM (M) 604/2020] passed by Hon'ble High Court of Delhi wherein it upheld the Trial Court's decision that the courts in Delhi had jurisdiction to try the recovery suit filed by the respondent. The petitioner had contested territorial jurisdiction, arguing that all transactions including placement of order, dispatch of goods, and payments occurred in West Bengal, with no part of the cause of action arising in Delhi. However, the Hon'ble High Court rejected this argument, emphasizing that the respondent's invoices contained a clause specifying Delhi's jurisdiction and more critically payments were made into the respondent's Delhi bank account.
22. When, in the present case, the part cause of action has arisen also on account of the payments made by the petitioner/defendant directly into the bank account of the respondent/plaintiff, even if these were not on regular basis, since there is nothing to show that the place of payment had been fixed, even without following the principle that the 'debtor must seek out the creditor', it is clear that the Delhi Courts have jurisdiction to try the suit and the invoice does not vest jurisdiction in a court which had no jurisdiction at all.
CS (Comm.) No. 112/2024 -21-20. Reliance can also placed on judgment titled as "TKW Managment Solutions Pvt. Ltd. Vs. Sherif Cargo & Anr" passed by Hon'ble High Court of Delhi and in this judgment reliance is placed on judgment titled as "Union Bank of India v. Milkfood Ltd." RFA (OS) 64/2007 passed by a Division Bench of this Court wherein, it is held that "in the absence of any covenant in the agreement settling a place of payment, the debtor must seek the creditor to pay at the place where the creditor is located ". In this judgment it is held that " The aforesaid doctorine has also been invoked in the context of suit filed under Order XXXVII of the CPC in IUP Jindal Metals & Alloys Ltd. v. M/s. Conee Chains Pvt. Ltd., 2013 SCC Online Del 1454 and Shradha Wassan & Ors. v. Anil Goel & Ors., 2009 SCC Online Delhi 1285 and it has been observed that where the plaintiff has called upon the defendants to pay the outstanding amounts from a particular place, it would be the Courts having jurisdiction over such a place that would be the appropriate forum to adjudicate the dispute on the basis of the doctrine 'debtor must seek creditor'.
21. Ld. Counsel for the plaintiff has drawn my attention to the invoices attached with the plaint. I have perused the invoices filed with the plaint. The invoices contain certain terms and conditions, wherein the dispute resolution clause is mentioned as "Subject to 'Delhi' Jurisdiction only." This inclusion of the word CS (Comm.) No. 112/2024 -22- 'only' in this clause is explicit and clear. There is no ambiguity in this clause and moreover the veracity of the invoices is not disputed by either of the parties. In this respect reliance can be placed on A.B.C. LAMINART PVT. LID. & ANR. vs. A.P. AGENCIES, SALEM [1989] 2 S.C.R. passed by the Hon'ble Supreme Court. Relevant paragraph is reproduced here :-
"From the foregoing decisions it can be reasonably deduced that where such an ouster clause occurs, it is pertinent to see whether there is ouster of jurisdiction of other Courts. When the clause is clear, unambiguous and specific accepted notions of contract would bind the parties and unless the absence of ad idem can be shown, the other Courts should avoid exercising jurisdiction. As regards construction of the ouster clause when words like 'alone', 'only', 'exclusive' and the like have been used there may be no difficulty. Even without such words in appropriate cases the maxim 'expressio unius est exclusio alterius' -expression of one is the exclusion of another may be applied. What is an appropriate case shall depend on the facts of the case. In such a case mention of one thing may imply exclusion of another. When certain jurisdiction is specified in a contract an intention to exclude all others from its operation may in such cases be inferred. It has therefore to be properly construed."
In the present case also on the invoices, it is specifically mentioned that "Subject to Delhi Jurisdiction only".
I am of the view that part cause of action arose within the jurisdiction of this Court as principal place of business of plaintiff is First Floor, F-12, TDI Fun Republic Mall, Moti Nagar, Moti Nagar Metro Station, Ramesh Nagar, New Delhi, West Delhi, Delhi-110015. The plaintiff is able to prove this issue and this issue is accordingly decided in favour of the plaintiff and against the defendants.
CS (Comm.) No. 112/2024 -23-22. Issue No. 3- Whether the plaintiff is entitled for recovery of Rs. 51,51,696/- from the defendants, as prayed ? (OPP)
23. At the very Outset, I may observe that the provisions of Section 2 (1) (c)(xviii) of Commercial Courts Act, 2015 are very clear which reads as under:-
(c) "commercial dispute" means a dispute arising out of-
(i) ordinary transactions of merchants, bankers, financiers and traders such as those relating to mercantile documents, including enforcement and interpretation of such documents;
(ii) export or import of merchandise or services;
(iii) issues relating to admiralty and maritime law;
(iv) transactions relating to aircraft, aircraft engines, aircraft equipments and helicopters, including sales, leasing and financing of the same;
(v) carriage of goods;
(vi) construction and infrastructure contracts, including tenders;
(vii) agreements relating to immovable property used exclusively in trade or commerce.
(viii) franchising agreements;
(ix) distribution and licensing agreements;
(x) management and consultancy agreements;
(xi) joint venture agreement;
(xii) shareholders agreements;
(xiii) subscription and investment agreements pertaining to the services industry including outsourcing services and financial services;
(xiv) mercantile agency and mercantile usage;
(xv)partnership agreements;
(xvi) technology development agreements; (xvii) intellectual property rights relating to registered and unregistered trademarks, copyright, patent, design, domain names, geographical indications and semiconductor integrated circuits;
(xviii) agreement for sale of goods or provision of services;CS (Comm.) No. 112/2024 -24-
(xix) exploitation of oil and gas reserves or other natural resources including electromagnetic spectrum; (xx) insurance and re-insurance;
(xxi) contracts of agency relating to any of the above; and (xxii) such other commercial disputes as may be notified by the Central Government.
24. The provisions of Section 2 (1) (c) (xviii) of Commercial Courts Act as above are very much clear. Sale of goods are governed by Sale of Goods Act, they pertain to movable properties, any dispute of sale or agreement to sale of goods of specified value do come within the jurisdiction of Commercial Courts Act. The clause also includes the services and guarantee given for the goods sold. The service or guarantee may be oral or written. Therefore, the facts which alleged in the plaint comes under the Commercial disputes.
25. Secondly, now the question arises whether this Court has the pecuniary jurisdiction to adjudicate the matter which is dispute. In this regard, the provisions of Section 3 of Commercial Courts Act, 2015 provides that:
Section 3 : Constitution of Commercial Courts:
(1) The State Government, may after consultation with the concerned High Court, by notification, constitute such number of Commercial Courts at District level, as it may deem necessary for the purpose of exercising the jurisdiction and powers conferred on those Courts under this Act:
[Provided that with respect to the High Courts having ordinary original civil jurisdiction, the State Government may, after consultation with the concerned High Court, by notification, constitute Commercial Courts at the District Judge level:CS (Comm.) No. 112/2024 -25-
Provided further that with respect to a territory over which the High Courts have ordinary original civil jurisdiction, the State Government may, by notification, specify such pecuniary value which shall not be less than three lakh rupees and not more than the pecuniary jurisdiction exercisable by the District Courts, as it may consider necessary. ] 3[1A) Notwithstanding anything contained in this Act, the State Government may, after consultation with the concerned High Court, by notification, specify such pecuniary value which shall not be less than three lakh rupees or such higher value, for whole or part of the State, as it may consider necessary.]
26. Admittedly, the Commercial Court Act was amended on 03.05.2018 and by virtue of the amendment and by virtue of the notification, the pecuniary value of the Commercial Courts Act shall not be less than Rs. 3,00,000/-. In the present case, the claim amount which is shown in the plaint is of Rs. 51,51,696/-. So, commercial court has jurisdiction to try and entertain the present suit.
27. The burden to prove this issue is upon the plaintiff. To prove this issues, the plaintiff appeared as PW-1 and filed affidavit on the lines of the plaint. This witness has proved the invoice No. GST-19 dated 27.04.2022 Ex. P-7 and copy of E- way bill dated 27.04.2022 Ex. P-9. The defendants have admitted this invoice and e-Way bill during admission/denial of documents. PW-1 has proved copy of invoice No. GST-47 dated 28.05.2022 amounting to Rs. 16,66,160/- as Ex. PW-1/7, e-Way Bill No. 761261930540 as Ex. PW-1/8, invoice No. GST-82 dated 22.07.2022 amounting to Rs. 7,22,345/- as Ex. PW-1/9 and CS (Comm.) No. 112/2024 -26- e-Way Bill No. 751272799601 as Ex. PW-1/10. I have perused the written statement filed by the defendants. The defendants have admitted that they have business dealings with the plaintiff. The defendants in para no. 5 of the preliminary objections has mentioned that the goods i.e. lubricating oil as supplied by plaintiff vide their invoice no. GST-47 dated 28.05.2022 and invoice No. GST-82 dated 22.07.2022 were found to be defective and sub-standard. The defendants in para no. 6 of reply on merits of written statement has admitted that the defendant no. 2 did purchase lubricating oil and other material from the plaintiff. The defendants have also admitted that that the payments as made by the defendant no. 2 is matter of records. So, the defendants have admitted that plaintiff has supplied lubricating oil and other materials to the defendants.
28. The main contention raised by Ld. Counsel for defendants is that plaintiff has supplied defective goods vide invoice no. GST-47 dated 28.05.2022 and invoice no. GST-82 dated 22.04.2022 and due to use of lubricating oil the furnace machine gear box broke down resulting into stoppage of manufacturing process and the defendant no. 2 firm suffered heavy losses on account of stoppage of manufacturing process. To prove this fact defendant produced DW-2 Sh. Shwetabh Sinha, Production Manager, Krishna Oil and Chemical pvt. Limited. This witness has stated that he has brought the summoned reports of the sample given by Krishna Steel Trading Company for testing. This witness has proved test reports as Ex. DW-2/1 to Ex. DW-2/3. This witness has stated that he has conducted test on the lubricating oil, sample of which was brought by the party i.e. the CS (Comm.) No. 112/2024 -27- defendant no. 2 and he himself had taken printout of Ex. DW-2/1 to Ex. DW-2/3. I have perused the reports Ex. DW-2/1 to Ex. DW-2/3. This witness has not placed on record any document to show that M/s. Krishna Oils and Chemical Pvt. Limited is authorized to do testing on the lubricants. Admittedly, the samples were given by defendant no. 2 i.e. M/s. Krishna Steel Trading Company to DW-2 for testing. DW-2 has admitted that he is not an expert of lubricant and other products but he is having vast experience in this field. This witness has admitted that he is not expert declared/appointed by any government agency. I am of the view that samples were provided by the defendant no. 2 i.e. M/s. Krishna Steel Trading Company to DW-2 so it cannot be said that same quality of samples were given by the defendant no. 2 to DW-2 for testing, which were supplied by the plaintiff to it. The defendant no. 2 must have tested the products from authorized government laboratory. I am of the view that no reliance can be given on the testimony of DW-2 and the reports Ex. DW-2/1 to Ex. DW-2/3.
29. It is further contended by Ld. Counsel for defendants that due to use of substandard lubricating oil (supplied by the plaintiff) the furnace machine gear box broke down resulting into stoppage of manufacturing process and the defendant no. 2 firm suffered heavy losses to the tune of Rs. 10 lacs. Defendants have not brought on record any evidence to show that the furnace machine gear box broke down due to defective oil supplied by the plaintiff. As the defendants are not able to prove that any substandard lubricating oil was supplied by the plaintiff to the defendants, I am of the view that in absence of any CS (Comm.) No. 112/2024 -28- evidence, it is not proved that Furnace machine of defendant broke down resulting into stoppage of manufacturing process and defendants have suffered any losses.
30. As observed earlier that the defendants have admitted to receive goods from the plaintiff and the defendant in the affidavit regarding admission denial of documents has admitted the invoice No. GST-19 dated 27.04.2022 Ex. P-7 and copy of E-way bill dated 27.04.2022 Ex. P-9. PW-1 has also proved copy of invoice No. GST-47 dated 28.05.2022 amounting to Rs. 16,66,160/- as Ex. PW-1/7, e-Way Bill No. 761261930540 as Ex. PW-1/8, invoice No. GST-82 dated 22.07.2022 amounting to Rs. 7,22,345/- as Ex. PW-1/9 and e-Way Bill No. 751272799601 as Ex. PW-1/10. No suggestion is given by the defendants to PW-1 that these invoices are forged and fabricated. Rather, defendants have admitted to received goods vide invoice No. GST-47 dated 28.05.2022 and invoice No. GST-82 dated 22.07.2022. So, it is proved that goods were supplied by the plaintiff to the defendants. It is also admitted fact that no debit note was issued in respect of the goods supplied by the plaintiff to the defendants. DW-1 is one of the partner of M/s. Krishna Steel Trading Company and this witness has stated that he has no idea if the defendant no. 2 has availed input tax credit on the invoices raised by the plaintiff on defendant. This witness has admitted that defendant no. 2 has not sent any written communication to the plaintiff for lifting of the rejected goods. The defendants are not able to prove that defective goods were supplied by the plaintiff to the defendants. Moreover, the defendants have admitted to make the payment of Rs. 3,00,000/-
CS (Comm.) No. 112/2024 -29-on 17.04.2025 and Rs. 6,00,000/- on 10.05.2023. As DW-1 has not clearly denied that the defendant no. 2 has availed input tax credit on the invoices raised by the plaintiff on the defendants or not and admitted that defendant no. 2 has not sent any written communication to the plaintiff for lifting of the rejected goods, I am of the view that plaintiff is able to prove this issue. The plaintiff is able to prove that it is entitled to amount of Rs. 26,51,696/- from the defendants. Accordingly, issue no. 3 is decided in favour of the plaintiff and against the defendants.
31. Issue No. 4-Whether the plaintiff is entitled to the interest on the amount of Rs. 51,51,696/-, if yes then at what rate and for what period ? (OPP) The plaintiff has claimed interest @ 24% per annum from the defendants. Ld. Counsel for plaintiff has drawn my attention towards the invoices wherein, it is mentioned that "Interest @ 24% per annum will be charged, if payment is not made within 90 days". Reliance can be placed in this regard on the judgment of Central Bank of India Vs Ravindra & Ors MANU/SC/0663/2001 passed by Hon'ble Supreme Court of India. In this judgment it is held that according to stroud's Judicial dictionary of Words and Phrases interest means, inter alia, compensation paid by the borrower to the lender for deprivation of the use of his money. In Secretary, Irrigation Department, Government of Orissa & Ors Vs G. C. Roy Manu/ SC/0297/1992 (1992) 2 SCC 508, it is held that the constitution bench opined that a person deprived of the use of money to which he is legitimately entitled has a right to be compensated CS (Comm.) No. 112/2024 -30- for the deprivation, call it by any name. It may be called interest, compensation or damages. This is the principles of Section 34 CPC.
In this judgment, Judgment of Dr. shamlal Narula Vs CIT Punjab MANU/ SC/0109/1964 (53) was also relied upon wherein it is held that interest is paid for the deprivation of the use of the money. In this judgment it is also held that in whatever category "interest in a particular case may be put, it is a consideration paid either for the use of money or for forbearance in demanding it, after it has fallen due, and thus, it is charge for the use of forbearance of money. In this sense, it is a compensation allowed by law or fixed by parties, or permitted by customs or usage, for use of money, belonging to another, or of the delay in paying money after it has become payable.
Reliance can also be placed on the judgment of Aditya Mass Communication (P) Ltd Vs APSRTC MANU/SC/0759/2003 wherein Hon'ble Supreme Court granted interest @ 12% p.a. Reliance can also be placed on the judgment of "M/s IHT Network Limited Vs. Sachin Bhardwaj" in RFA No. 835/2016 & CM Appl.14617/2020 wherein the Hon'ble High Court of Delhi has granted interest @12% per annum. I am of the view that interest claimed by the plaintiff is every excessive and plaintiff is entitled to interest @ 12% p.a. which is reasonable and usually prevailing market rate of interest on the amount of Rs. 26,51,696/- from 10.05.2023 since when the amount was due as per statement of account.
29. RELIEF:
CS (Comm.) No. 112/2024 -31-In view of my above discussions, the suit of the plaintiff is decreed and a decree of Rs. 26,51,696/- is passed in favour of the plaintiff and against the defendants. The plaintiff is also entitled to interest @ 12% per annum on the amount of Rs. 26,51,696/- from 10.05.2023 since when the amount was due as per statement of account till realization. Both the defendants are jointly and severally liable to make the payment of decreetal amount. Plaintiff is also entitled to the cost of the suit. Decree sheet be prepared accordingly. File be consigned to record room, after necessary compliance.
Announced in the (NARESH KUMAR MALHOTRA)
open court on 15.05.2025 District Judge, Comm. Court-06
West, Tis Hazari Courts
Extension Block, Delhi/15.05.2025
Digitally
signed by
NARESH
NARESH KUMAR
KUMAR MALHOTRA
MALHOTRA Date:
2025.05.15
16:24:59
+0530
CS (Comm.) No. 112/2024 -32-