Delhi District Court
M/S Paras Pharma vs M/S Radiance Global on 25 November, 2024
CS SCJ 524/2023 M/s Paras Pharma vs. M/s Radiance Global & Ors.
IN THE COURT OF MS NEETU NAGAR, ADDITIONAL
CHIEF JUDICIAL MAGISTRATE-06, RADC, DELHI (THE
THEN JUDGE SMALL CAUSES COURT CUM
ADDITIONAL SENIOR CIVIL JUDGE CUM GUARDIAN
JUDGE, SOUTH-EAST DISTRICT, SAKET DISTRICT
COURT)
IN THE MATTER OF:
M/S Paras Pharma
(Through Its Proprietor)
Sh. Akshat Gupta
S/O Sh. Radhey Shyam Gupta
Having Office At:
N-20, Basement, South Extension, Part-1,
New Delhi
Mobile No. 9999880015
...Plaintiff
VERSUS
1. M/S Radiance Global (Through Its Partners)
Having Office At F-167, Building No. 1733,
Bhagwat Building 1st Floor, Gurudwara Road,
Kotla Mubarakpur, South Extn-1, New Delhi
2. Sh. Arun Singh (Partner Of M/S Radiance Global)
R/O WZ-398, Upper Ground Floor,
Palam Village Near Easyday
New Delhi-110045
Also At:
F-167, Building No. 1733,
Bhagwat Building 1st Floor,
Gurudwara Road, Kotla Mubarakpur,
South Extn, Part-1, New Delhi
Mobile No. 9971753079, 8200294791
...Defendants
ACJM-06, RADC, New Delhi Page No. 1 of 21 Digitally
signed by
(The Then JSCC-cum-ASCJ-cum-GJ NEETU
South-East District, Saket District Court) NEETU NAGAR
Dated: 25.11.2024 NAGAR Date:
2024.11.25
16:16:46
+0530
CS SCJ 524/2023 M/s Paras Pharma vs. M/s Radiance Global & Ors.
*****
Date of Institution of Case : 27.04.2023
Date of Arguments : 20.07.2024
Date of Pronouncement of Judgment : 25.11.2024
Decision of Suit : Decreed
*****
SUIT FOR RECOVERY OF RS. 1,50,000/- (RUPEES ONE
LAKH FIFTY THOUSAND ONLY) UNDER ORDER XXXVII
OF THE CIVIL PROCEDURE CODE WITH INTEREST AT
18% P.A. ALONGWITH THE PENDENTELITE AND
FUTURE INTEREST
*****
JUDGMENT
*****
1. Plaintiff has filed the present suit under Order XXXVII of the Civil Procedure Code, 1908 (in short "CPC") based upon cheque bearing No. 485736 of Rs. 4,00,000/- (Rupees Four Lakh only), drawn on State Bank of India. It is stated that out of Rs. 4 Lakh, the defendant no. 1 has already paid Rs. 2,50,000/- (Rupees Two Lakh Fifty Thousand Only) on different occasions and the present suit is for the recovery of Rs. 1,50,000/- (Rupees One Lakh Fifty Thousand Only).
Digitally signed by NEETU ACJM-06, RADC, New Delhi Page No. 2 of 21 NEETU NAGAR (The Then JSCC-cum-ASCJ-cum-GJ NAGAR Date:
South-East District, Saket District Court) 2024.11.25 16:16:50 Dated: 25.11.2024 +0530 CS SCJ 524/2023 M/s Paras Pharma vs. M/s Radiance Global & Ors.
PLAINT
2. In the plaint, the plaintiff has submitted as under:-
2.1. The plaintiff is engaged in wholesale business of pharmaceuticals products and medicines under the name and style of M/s. Paras Pharma. The defendant no. 2 is the partner of the defendant no. 1 and dealing with health care and food products. The defendant no. 2 through one Mr. Pankaj Raj Singh (who acted as an agent) of their partnership firm approached the plaintiff in the month of April, 2020, and induced the plaintiff to place an order of 3M N95 Masks and assured to supply the product by the end of June 2020 with proper GST bill.
Accordingly, the plaintiff made an advance payment of Rs. 4,00,000/- (Rupees Four Lakhs only) to the defendants through RTGS on 18.06.2020. In order to secure the advance payment made by the plaintiff, the defendants had issued the cheque in question in favour of the plaintiff and it was mutually agreed that in the event if the defendant failed to supply the products, then the plaintiff shall have the right to present the said security cheque to his banker for the payment of the advance amount. 2.2. However, the defendants failed to adhere to their promise by not supplying the products to the plaintiff. It is stated further that the plaintiff also had conversation with defendants and with Mr. Pankaj Raj Singh on WhatsApp with regard to the delivery of the product as well as for refund of the amount paid as advance, however, all in vain. On 04.08.2020, the plaintiff personally Digitally signed by ACJM-06, RADC, New Delhi Page No. 3 of 21 NEETU (The Then JSCC-cum-ASCJ-cum-GJ NEETU NAGAR South-East District, Saket District Court) NAGAR Date:
2024.11.25 Dated: 25.11.2024 16:16:54 +0530 CS SCJ 524/2023 M/s Paras Pharma vs. M/s Radiance Global & Ors.
visited the office of defendant for the said purpose, but the defendant again sought some more time and pleaded that the products have not yet been received because of shortage of supply. Despite lapse of considerable time, the defendants failed to supply the products to the plaintiff. 2.3. It is further submitted that on 06.10.2020, the defendant refunded a sum of Rs. 1,00,000/- (Rupees One Lakh Only) through RTGS in the Bank account of the plaintiff and assured that the balance amount of Rs. 3,00,000/- (Rupees Three Lakh Only) will be paid on or before December, 2020 and it was again agreed that if the defendants fail to make the balance payment, then the plaintiff shall be at liberty to present the aforesaid cheque to his banker. After the lapse of the agreed time i.e. December 2020, the plaintiff demanded the remaining payment of Rs. 3,00,000/- (Rupees Three Lakh Only) but the defendant again requested for some more time and assured to pay the balance amount on or before March, 2021.
2.4. It is further averred that in the month of March, 2021, the plaintiff again approached the defendant No. 2 either to pay the balance amount in cash or issue a fresh cheque of Rs. 3,00,000/- (Rupees Three Lakh Only) but the defendants refused to issue a fresh cheque and again assured the plaintiff that the balance amount would be transferred by way of RTGS but all in vain. After lot of demands and requests made by the plaintiff, the defendant instructed the plaintiff to present the said cheque to his banker and return the amount of Rs. 1,00,000/- (Rupees One Lakh Only) after deducting his balance amount. On the Digitally signed by ACJM-06, RADC, New Delhi Page No. 4 of 21 NEETU (The Then JSCC-cum-ASCJ-cum-GJ NEETU NAGAR South-East District, Saket District Court) NAGAR Date:
2024.11.25 Dated: 25.11.2024 16:16:58 +0530 CS SCJ 524/2023 M/s Paras Pharma vs. M/s Radiance Global & Ors.
instructions of the defendants, the plaintiff deposited the aforesaid cheque of Rs. 4,00,000/- (Rupees Four Lakh Only) only to get his lawful dues of Rs. 3,00,000/- only. Accordingly, on 26.3.2021, the plaintiff presented the said cheque to his banker HDFC Bank at A3 NDSE South Extension Part-1, New Delhi-110049 for encashment but the same got dishonoured with the remarks "Kindly contact drawer" vide returning memo dated 29.3.2021. On contact by the plaintiff, the defendants again asked for a week's time to make the payment. When the defendants again failed to make the balance payment within the agreed period of one week time, then the plaintiff again deposited the said cheque on 09.04.2021 to his banker for encashment but the said cheque again returned unpaid with the similar remarks vide bank returning memo dated 13.04.2021 and the return memo was received by the plaintiff through courier from his banker on 20.4.2021. Meanwhile, the defendant paid a sum of Rs. 50,000/-
(Rupees Fifty Thousand Only) through RTGS on 15.04.2020 and assured to make the balance payment of Rs. 2,50,000/-(Rupees Two Lakh Fifty Thousand Only) at the earliest, however the defendants failed to make the aforesaid balance payment despite repeated demands and requests.
2.5. It is stated next that the plaintiff issued a statutory notice on dated 12.05.2021 sent through Speed Post on dated 13.05.2021 to the defendants calling upon to pay the amount of Rs. 2,50,000/- (Rupees Two Lakh Fifty Thousand Only) within the period stipulated in the notice. The said notice was sent at the last Digitally ACJM-06, RADC, New Delhi Page No. 5 of 21 signed by (The Then JSCC-cum-ASCJ-cum-GJ NEETU South-East District, Saket District Court) NEETU NAGAR Dated: 25.11.2024 NAGAR Date:
2024.11.25 16:17:04 +0530 CS SCJ 524/2023 M/s Paras Pharma vs. M/s Radiance Global & Ors.
known address of the defendants as well as through WhatsApp on dated 13.5.2021 which was duly served. Thereafter, the defendant approached the plaintiff and made further payment of Rs.1,00,000/- (Rupees One Lakh Only) i.e. Rs. 50,000/- (Rupees Fifty Thousand Only) on 27.5.2021 and Rs. 50,000/- (Rupees Fifty Thousand Only) on 31.5.2021 and he assured to pay the remaining amount of Rs. 1,50,000/- (Rupees One Lakh Fifty Thousand Only) at the earliest. However, the defendant again failed to make the balance payment of Rs. 1,50,000/- (Rupees One Lakh Fifty Thousand Only) to the plaintiff despite repeated demands and requests and later refused to make the balance payment. Since the defendant failed to make the aforesaid payment to the plaintiff within the statutory period of 15 days, therefore, separate criminal complaint for commission of offence under section 138 of N.I. Act bearing CC NI Act no. 6784 of 2021 titled as M/s Paras Pharma vs. M/s Radiance Global & Ors. was filed in which the the accused (present defendants) stood acquitted due to technical grounds,however, the accused (present defendants) admitted their liability beyond any reasonable doubts. It is averred that the cheque in question was issued in personal capacity of the partners of M/S Radiance Global as the plaintiff was receiving the payment from M/S. Radiance Global & Ors. and the same is accepted by the present defendant in the proceedings of the complaint case under Section 138 of N.I. Act.. It is submitted further that the amount payable by the Defendants is in the nature of legally recoverable debt due to the issuance of cheque. Hence, the present suit. NEETU NAGAR Digitally signed by ACJM-06, RADC, New Delhi Page No. 6 of 21 NEETU NAGAR (The Then JSCC-cum-ASCJ-cum-GJ Date: 2024.11.25 South-East District, Saket District Court) 16:17:07 +0530 Dated: 25.11.2024 CS SCJ 524/2023 M/s Paras Pharma vs. M/s Radiance Global & Ors.
3. Summons under Order XXXVII CPC were issued in terms of order dated 05.07.2023, which were received back unserved. However, the defendant no.2 appeared on 17.08.2023 and admitted having received the entire set of plaint and annexures and submitted that the defendant no.1 already stood dissolved prior to the filing of the suit. Vakalatnama was filed on behalf of the defendant no.2 on 06.09.2023 and an application for leave to defend was also filed.
4. In the leave to defend application, which is also accompanied with affidavit of Defendant No.2 Mr. Arun Singh, it is stated that the plaintiff has not come to the Court with clean hands and has not stated true facts and concealed the true material facts from the Court. It is claimed that all the incidents and occasions as made out by the plaintiff are purely imaginary and self cooked up story of the plaintiff only with the ulterior motive to extort money from the defendant no.2. It is submitted that the plaintiff filed a criminal case under section 138 of NI Act against defendant no.2 in which defendant no.2 has been acquitted on merits. It is claimed that defendant no.2 already paid his liability towards the company Radiance Global which paid that money to the plaintiff. It is averred that the defendant no.2 resigned in the month of march 2021 from the company after clearance of his liability towards the company. It is further submitted that the plaintiff was aware about the resignation of the defendant no.2 and started demanding remaining payment of NEETU ACJM-06, RADC, New Delhi (The Then JSCC-cum-ASCJ-cum-GJ Page No. 7 of 21 NAGAR South-East District, Saket District Court) Digitally signed by Dated: 25.11.2024 NEETU NAGAR Date: 2024.11.25 16:17:11 +0530 CS SCJ 524/2023 M/s Paras Pharma vs. M/s Radiance Global & Ors.
Rs.1,50,000/-(One Lakh Fifty Thousand) from other partner Sh. Munish Pal Singh who informed him that he is not well due to heart problem and that he will pay all the remaining amount. It is further stated that when the plaintiff became aware about the critical condition of Sh. Munish Pal Singh, he immediately started proceeding for criminal case as mentioned above to create pressure on Sh. Munish Pal Singh and Defendant no.2, while at that time defendant no.2 was not part of the company Radiance Global. It is prayed for granting leave to defend the suit and for dismissal of the suit.
5. It is pertinent to mention that no application for issuance of summons for judgment was filed by the plaintiff and the application for leave to defend was filed by the defendant no.2 without issuance of summons for judgment on him. However, the admissions contained therein can be used under Order XII Rule 6 CPC.
6. To appreciate controversy involved, it is apt here to reproduce the provision of Order XII Rule 6 CPC which reads as under:
"Judgment on admissions.-(1) Where admissions of fact have been made either in the pleadings or otherwise, whether orally or in writing, the Court may at any stage of the suit, either on the application of any party or of its own motion and without waiting for the determination of any other question between the parties, make such order or give such judgment as it may think fit, having regard to such admissions.
(2) Whenever a judgment is pronounced under sub-rule (1), a NEETU ACJM-06, RADC, New Delhi Page No. 8 of 21 NAGAR (The Then JSCC-cum-ASCJ-cum-GJ Digitally signed by South-East District, Saket District Court) NEETU NAGAR Dated: 25.11.2024 Date: 2024.11.25 16:17:17 +0530 CS SCJ 524/2023 M/s Paras Pharma vs. M/s Radiance Global & Ors.
decree shall be drawn up in accordance with the judgment and the decree shall bear the date on which the judgment was pronounced".
7. From the language of Order XII, Rule 6 CPC, it is clear that it is open to the Court to pronounce a judgment on the basis of admission in the pleadings or otherwise. The word "otherwise", in the said provision shows that it is open to the Court to base the judgment on statements made by a party not only in the pleadings but also de hors the, pleadings. Such admissions may be made either expressly or constructively. Admissions can be made by a party in the manner provided under Sections 18 to 23 of the Evidence Act, 1872. Section 17 of the Evidence Act defines an admission as a statement oral or documentary which suggests any inference as to any fact in issue or relevant fact. Admissions can be in the pleadings expressly or implicitly or otherwise, namely in documents, correspondence, in answer to interrogatories etc. The admissions can even be constructive admissions and need not be specific or expressive which can be inferred from the vague and evasive denial in the written statement while answering specific pleas raised by the plaintiff. The admissions can even be inferred from the facts and circumstances of the case. The Court has to scrutinize the pleadings in detail and has to come to the conclusion that the admissions are unequivocal, unqualified and unambiguous. The word "otherwise" is of wide import and can cover all kind of admissions which are clear and unequivocal. Reference may be made to the judgment of the Division Bench of the Delhi High Digitally ACJM-06, RADC, New Delhi Page No. 9 of 21 signed by NEETU (The Then JSCC-cum-ASCJ-cum-GJ NEETU NAGAR South-East District, Saket District Court) NAGAR Date:
Dated: 25.11.2024 2024.11.25
16:17:21
+0530
CS SCJ 524/2023 M/s Paras Pharma vs. M/s Radiance Global & Ors.
Court in Delhi Jal Board vs Surendra P. Malik, 104 (2003) DLT 151 wherein it was observed as under:-
"The test, therefore, is (i) whether admissions of fact arise in the suit, (ii) whether such admissions are plain, unambiguous and unequivocal, (iii) whether the defense set up is such that it requires evidence for determination of the issues and (iv) whether objections raised against rendering the judgment are such which go to the root of the matter or whether these are inconsequential making it impossible for the party to succeed even if entertained. It is immaterial at what stage the judgment is sought or whether admissions of fact are found expressly in the pleadings or not because such admissions could be gathered even constructively for the purpose of rendering a speedy judgment".
8. Similarly, in Bharat Singh vs Bhagirathi (1966) 1 SCR 606, it was observed as under:
"Admissions are substantive evidence by themselves, in view of ss. 17 and 21 of the Indian Evidence Act, though they are not conclusive proof of the matters admitted. We are of opinion that the admissions duly proved are admissible evidence irrespective of whether the party making them appeared in the witness box or not and whether that party when appeared as witness was confronted with those statements in case it made a statement contrary to those admissions. The purpose of contradicting the witness under s. 145 of the Evidence Act is very much different from the purpose of proving the admission. Admission is substantive evidence of the fact admitted while a previous statement used to contradict a witness does not become substantive evidence and merely serves the- purpose of throwing doubt on the veracity of the witness. What weight is to be attached to an admission made by a party is a matter different from its use as admissible evidence".
9. The present case is instituted on the basis of cheque in question and admissions made by the defendant no.2/accused Digitally ACJM-06, RADC, New Delhi Page No. 10 of 21 signed by NEETU (The Then JSCC-cum-ASCJ-cum-GJ NEETU NAGAR South-East District, Saket District Court) NAGAR Date:
Dated: 25.11.2024 2024.11.25
16:17:26
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CS SCJ 524/2023 M/s Paras Pharma vs. M/s Radiance Global & Ors.
in the criminal case. Hence, it is desirable to reproduce the relevant portion of judgment dated 08.09.2022 and same is as under:
"8.Examination of the accused under section 313 Cr.P.C: The accused was examined under section 313 Cr.P.C. on 07.06.2022, wherein he admitted that the complainant is engaged in the business of pharma products in the name of M/S Paras Pharma. He also admitted that he is partner of M/S Radiance Global and was dealing in healthcare and food products. He denied that he approached the complainant through Mr. Pankaj Raj Singh in April, 2020, for import of N-95 Masks and they assured to supply N-95 Masks to the complainant by June, 2020. He stated that complainant did not place any purchase order with them, rather they agreed to do business in partnership through their partnership firm and they agreed to share profits upon investment of Rs. 5 lakhs by each firm, but complainant only invested Rs. 4 Lakhs instead of agreed amount of Rs. 5 lakhs. He stated that the profit got delayed due to delayed delivery of masks and thereafter on request of complainant for refund of amount, he transferred Rs. 1 lakh to the complainant and assured to give him remaining amount upon receiving profit on sale of masks. He denied that complainant approached him time and again for payment of balance amount and thereafter, presented the cheque in question upon obtaining the instructions from him. He admitted that the cheque in question was dishonoured with remarks "kindly contact drawer" vide return memo dated 13.04.2021. He also admitted that he received the legal demand notice. He admitted his signatures on the cheque in question, however, he denied filing particulars of the same. He also stated that he had transferred Rs. 1,50,000/-to the accused before filing of the complaint and stated that he had resigned from the M/S Radiance Global in March, 2021 and as per the balancesheet of MIS Radiance Global, he paid Rs. 1 Lakh to the M/s. Radiance Global which was transferred to complainant by way of RTGS. He stated that the remaining amount was to be paid by Sh. Munish Digitally signed by ACJM-06, RADC, New Delhi Page No. 11 of 21 NEETU (The Then JSCC-cum-ASCJ-cum-GJ NEETU NAGAR South-East District, Saket District Court) NAGAR Date:
2024.11.25 Dated: 25.11.2024 16:17:30 +0530 CS SCJ 524/2023 M/s Paras Pharma vs. M/s Radiance Global & Ors.
Pal Singh, however, the same could not be paid on account of death of Sh. Munish Pal Singh and he has no liability towards the complainant as the remaining amount was to be paid by partnership firm. He stated that he intends to lead defence evidence.
9. Evidence on behalf of Accused: In his defence, the Accused has examined himself as DW-2 wherein he adopted his statement recorded U/S 313 Cr. P.C as his examination-in-chief and further stated that the complainant had invested Rs. 4 lakhs in M/S Radiance Global, though initially he agreed to invest Rs. 5 lakhs.
He further stated that they were supposed to import masks and share profit upon sale of 3 M masks by this investment, however, the import of 3 M masks got delayed and then upon demand of complainant for return of amount, they had returned Rs. 1 lakh to the complainant in November, 2020 and Rs. 50,000/- to the complainant in March, 2021. He stated that he left the accused company after March, 2021 and at that time, he had deposited his share of Rs. 1 Lakh in discharge of his liability towards the complainant, which was later on transferred to the complainant somewhere in May-June 2021. He deposed that the other partner Sh. Munish Pal Singh was liable for making payment of remaining amount to the complainant and complainant had good relationship with him and the complainant told this witness that he will recover the remaining amount from Sh. Munish Pal Singh and that the liability of this witness stands discharged. However, upon death of Sh. Munish Pal Singh, the complainant misused his security cheque. Thereafter, this witness was cross examined." xxxx The accused has also claimed that he is not liable for making payment as the complainant had dealing with the firm and not with him individually and he has already paid Rs. 2,50,000/- to the complainant so far, thus, for the payment of remaining amount, the partnership firm is liable as he has already resigned from the partnership firm in March, 2021. I do not find any merit in this submission, as the transaction was initiated in June, 2020 and the complainant had transferred Rs. 4 lakhs to the firm of the accused on 18.06.2020 and at that point of time, admittedly, the accused was partner of Digitally signed by NEETU ACJM-06, RADC, New Delhi Page No. 12 of 21 NEETU NAGAR (The Then JSCC-cum-ASCJ-cum-GJ NAGAR Date:
2024.11.25 South-East District, Saket District Court) 16:17:35 Dated: 25.11.2024 +0530 CS SCJ 524/2023 M/s Paras Pharma vs. M/s Radiance Global & Ors.
M/S Radiance Global, thus, the accused Mr. Arun Singh is liable as per section 25 of the Partnership Act, 1932 which reads as-
" 25. Liability of a partner for acts of the firm- Every partner is liable jointly with all the other partners and also severally, for all acts of the firm done while he is a partner.' Even going by the submission of the accused, he has resigned from M/S Radiance Global in March, 2021, thus, admittedly he was partner of M/S Radiance Global in June, 2020 and therefore, he is severally also liable on behalf of the firm, as admittedly, the only other partner of the firm Mr. Munish Pal Singh has passed away. Thus, the accused cannot regal out of liability only on the ground that he has resigned from the firm or on the ground that he has already paid Rs. 2,50,000/- to the complainant.
24.The accused has also tried to dispute his liability by claiming that the cheque was given as security for the amount of Rs. 4 lakhs invested by the complainant in their firm and the same has been misused by complainant after filling it's particulars. The complainant during his cross examination has admitted that either he or his mother may have filled the particulars of the cheque and the accused during his cross-examination has stated that he has given the cheque in question as security without filling any particulars. However, once the complainant establishes the fact that the accused had liability towards the complainant for the alleged amount, the complainant gets authority to fill the cheque amount and present the same.
Xxxx
28. In the present case, admittedly, the complainant has received part payment of Rs. 1 lakh out of the total amount of Rs. 4 lakhs, from the accused on 06.10.2020, which is much prior to the date of presentation of the cheque i.e. 29.03.2021 and admittedly, the complainant himself has filled the particulars or got the same filled by his mother and the complainant had presented the cheque for the entire amount of Rs. 4 lakh and he has not given any explanation as to why he filled the amount of Rs. 4 Lac in the cheque, when he has already received part payment of Rs. 1 Lac from the accused, much prior NEETU ACJM-06, RADC, New Delhi (The Then JSCC-cum-ASCJ-cum-GJ Page No. 13 of 21 NAGAR South-East District, Saket District Court) Digitally signed by NEETU NAGAR Dated: 25.11.2024 Date: 2024.11.25 16:17:39 +0530 CS SCJ 524/2023 M/s Paras Pharma vs. M/s Radiance Global & Ors.
to the date of presentation of the cheque. Further, the complainant could have made endorsement on the cheque acknowledging the part payment received by him, and then could have presented the cheque in question, but the complainant has not done so. Though the complainant has given the suggestion to the accused that upon receiving total payment of Rs.2,50,000/- from the accused, he demanded fresh Rs.1,50,000/ from the accused, however, the accused has denied this suggestion and complainant has not lead any evidence to prove such demand.
29. Since, in the present case, the admitted liability of accused got reduced on account of part payment of Rs. 1 Lakh made by him, before presentation of the cheque, thus, it cannot be said that the amount of Rs. 4 lakhs for which the cheque was presented by the complainant, is covered under the expression "any amount of money"
U/S 138 NI Act. As such, when the accused has presented the cheque in question for entire amount of Rs. 4 lakhs despite receiving part payment of Rs. 1 lakh before presentation of the cheque, he cannot be held guilty for dishonour of the cheque presented for Rs. 4 Lakhs. In view of the discussion made above and having considered the entire evidence, I have no hesitation to hold that the complainant has failed to establish the liability of the accused under Section 138 of the Act, thus, accused Sh. Arun Singh partner of M/S Radiance Global, stands acquitted for the offence US 138 NI Act. Let copy of this judgment be uploaded on CIS and Layers forthwith."
10. It is noteworthy that the case under section 138 NI Act was instituted on 28.08.2021 against the accused namely M/S. Radiance Global and its two partners namely Arun Singh (present defendant no.2) and Munish Pal Singh. From the perusal of the judgment dated 08.09.2022, it is clear that the defendant no.2 gave his statement under section 313 CrPC/defense evidence in which it is admitted that due to lapse of cheque foils in the name of M/S Radiance Global, said cheque was issued by ACJM-06, RADC, New Delhi Page No. 14 of 21 NEETU (The Then JSCC-cum-ASCJ-cum-GJ South-East District, Saket District Court) NAGAR Digitally signed by Dated: 25.11.2024 NEETU NAGAR Date: 2024.11.25 16:17:44 +0530 CS SCJ 524/2023 M/s Paras Pharma vs. M/s Radiance Global & Ors.
the partners of M/S. Radiance Global and liability is of Rs. 1,50,000/- (Rupees One Lakh Fifty Thousand Only). It is stated in the leave to defend application that the defendant no.2 made the payment to the firm which in turn made the payment to the plaintiff. Whereas, different pleas have been taken by defendant no.2 in the criminal case. It was stated therein that the rest of the payment was to be made by the other accused namely Munish Pal Singh who was partner in the firm but he has expired. Admittedly, the cheque in question was issued by the defendant no.2 under his signatures and the part payments were made by the defendant no.2 as a partner of the firm M/S. Radiance Global while he was a partner. From a perusal of the clarification sought from the defendant no.2 , it has transpired that the GST number of the firm M/S. Radiance Global was suspended on 08.12.2021.
11. It was urged on behalf of learned counsel on behalf of the defendant no.2 M/s Radiance Global that the present suit is not maintainable due to the fact that the firm defendant no.1 already stood dissolved prior to institution of the present suit. To my mind, there is no merit in the said contention. Section 25 of the Partnership Act provides that every partner is liable, jointly with all the other partners and also severally for all acts of the firm done while he is a partner. A firm is not a legal entity. It is only a collective or compendious name for all the partners. In other words, a firm does not have any existence away from its partners. A decree in favour of or against a firm in the name of the firm has the same effect as a decree in favour of or against NEETU ACJM-06, RADC, New Delhi (The Then JSCC-cum-ASCJ-cum-GJ Page No. 15 of 21 NAGAR South-East District, Saket District Court) Digitally signed by NEETU NAGAR Dated: 25.11.2024 Date: 2024.11.25 16:17:49 +0530 CS SCJ 524/2023 M/s Paras Pharma vs. M/s Radiance Global & Ors.
the partners. While the firm is incurring a liability it can be assumed that all the partners were incurring that liability and so the partners remain liable jointly and severally for all the acts of the firm.
12. It is also apposite to reproduce Section 45 of the Partnership Act which provides for the Liability for acts of partners done after dissolution. It reads as under:
"(1) Notwithstanding the dissolution of a firm, the partners continue to be liable as such to third parties for any act done by any of them which would have been an act of the firm if done before the dissolution, until public notice is given of the dissolution:
Provided that the estate of a partner who dies, or who is adjudicated an insolvent, or of a partner who, not having been known to the person dealing with the firm to be a partner, retires from the firm, is not liable under this section for acts done after the date on which he ceases to be a partner."
13. Further, section 48 of the Partnership Act provides for Mode of settlement of accounts between partners.Same is reproduced as under:
"In settling the accounts of a firm after dissolution, the following rules shall, subject to agreement by the partners, be observed: --
(a) Losses, including deficiencies of capital, shall be paid first out of profits, next out of capital, and, lastly, if necessary, by the partners individually in the proportions in which they were entitled to share profits.
(b) The assets of the firm, including any sums contributed by the partners to make up deficiencies NEETU ACJM-06, RADC, New Delhi Page No. 16 of 21 NAGAR (The Then JSCC-cum-ASCJ-cum-GJ Digitally signed by South-East District, Saket District Court) NEETU NAGAR Dated: 25.11.2024 Date: 2024.11.25 16:17:53 +0530 CS SCJ 524/2023 M/s Paras Pharma vs. M/s Radiance Global & Ors.
of capital, shall be applied in the following manner and order:--
(i) in paying the debts of the firm to third parties;
(ii) in paying to each partner rateably what is due to him from the firm for advances as distinguished from capital;
(iii) in paying to each partner rateably what is due to him on account of capital; and.."
14. Section 49 of the Partnership Act further provides for Payment of firm debts and of separate debts. It says that where there are joint debts due from the firm, and also separate debts due from any partner, the property of the firm shall be applied in the first instance in payment of the debts of the firm, and, if there is any surplus, then the share of each partner shall be applied in payment of his separate debts or paid to him.
15. Section 42 of the Partnership Act provides for Dissolution on the happening of certain contingencies. It reads as under:
"Subject to contract between the partners a firm is dissolved--
(a) if constituted for a fixed term, by the expiry of that term;
(b) if constituted to carry out one or more adventures or undertakings, by the completion thereof;
(c) by the death of a partner;"
16. From a cumulative reading of the above provisions , it has transpired that every partner is liable, jointly also severally for all acts of the firm done while he is a partner. The payment of Rs. 4 lacs was made by the plaintiff to the firm M/s Radiance NEETU NAGAR ACJM-06, RADC, New Delhi Page No. 17 of 21 Digitally signed by (The Then JSCC-cum-ASCJ-cum-GJ NEETU NAGAR Date: 2024.11.25 South-East District, Saket District Court) 16:17:57 +0530 Dated: 25.11.2024 CS SCJ 524/2023 M/s Paras Pharma vs. M/s Radiance Global & Ors.
Global on 18.06.2020 in pursuance of which cheque in question was issued as security. Out of the total amount of Rs. 4 lac, there is clear and categorical admission of the defendant no.2 in the judgment dated 08.09.2022 that Rs. 2,50,000/- has been paid by him to the plaintiff. Hence, there is outstanding amount of Rs. 1.5 Lac which is not cleared by the Firm M/s Radiance Global or its partners. The defendant no.2 cannot run away from his liability which has been incurred by him on behalf of the firm while he was acting as a partner. The partnership firm is dissolved upon the death of a partner out of the two partners, however, same is subject to the contract between the partners of the firm. From a perusal of the judgement dated 08.09.2022, it has transpired that Mr. Munish Pal Singh had expired prior to the institution of the criminal case on dated 28.08.2021. Moreover, defendant no.2 has admitted the entire case of the plaintiff with regard to payment of ₹4,00,000 and part payment of ₹2,50,000 made by him to the plaintiff. He has simply taken the defence that regarding the remaining amount, the liability was of the other partner or of the firm. It seems that the defendant no.2 entered into partnership without knowing the consequences of entering into partnership. However, ignorance of law pertaining to partnership is no excuse. The partner is liable even after dissolution of the firm if public notice is not given. There is nothing on record if any public notice was given by the firm M/s Radiance Global or its partners. Even if for the sake of arguments, it is assumed that the partnership dissolved on the death of one of the partners even in that case recovery can be affected with regard to the transaction NEETU ACJM-06, RADC, New Delhi Page No. 18 of 21 NAGAR (The Then JSCC-cum-ASCJ-cum-GJ South-East District, Saket District Court) Digitally signed Dated: 25.11.2024 by NEETU NAGAR Date: 2024.11.25 16:18:02 +0530 CS SCJ 524/2023 M/s Paras Pharma vs. M/s Radiance Global & Ors.
entered prior to the dissolution of the firm from the remaining partner. How the accounts were settled by the firm M/s Radiance Global after its dissolution is neither mentioned in the evidence of defendant no.2 in criminal case nor in the application for leave to defend. It is simply stated that the defendant no.2 made payment of its liability towards the firm without stating how the debts were paid. It seems that the defendant no.2 wants to take undue benefit due to his acquittal for technical reasons in criminal complaint under section 138 NI Act but the judgement makes the liability of the defendant no.2 crystal clear. Moreover, the defence that was taken by the defendant no.2 in the criminal case has not been pleaded in the present leave to defend application. It has been simply stated that defendant no.2 has made the payment and M/s. Radiance Global made the same to the plaintiff, however, this was not the case of the defendant no.2 in the criminal case against him. Hence, from the admissions made in the NI Complaint under Section 138 NI Act, it is clear that the defendant no.2 is liable to make the entire remaining payment to the tune of Rs. 1,50,000/- on behalf of the firm M/s Radiance Global for the reason that he is a signatory to the cheque in question on behalf of the firm and he has admitted having made the part payment on behalf of the firm. He cannot get away from making the remaining outstanding payment by saying that he has made payment of his share to the firm M/s Radiance Global or on the ground that the firm M/s Radiance Global has dissolved prior to the institution of the present suit.
Digitally signed by NEETU NEETU NAGAR ACJM-06, RADC, New Delhi Page No. 19 of 21 NAGAR Date:
2024.11.25 (The Then JSCC-cum-ASCJ-cum-GJ 16:18:06 South-East District, Saket District Court) +0530 Dated: 25.11.2024 CS SCJ 524/2023 M/s Paras Pharma vs. M/s Radiance Global & Ors.
17. Persual of the pleadings further shows that the bank of plaintiff is situated at South Extension Part-1, New Delhi, therefore, this Court has territorial jurisdiction to entertain the present suit for recovery of money. The present suit is also filed within limitation. The payment has been made on 18.06.2020 and the present suit has been filed on 27.04.2023 within 3 years from the date of payment.
18. Order 37 Rule 1 of the Civil Procedure Code specifies the classes of suits which can be tried by way of summary procedure. Sub- rule 2(a) specifies that the summary procedure will apply to the suits filed upon bills of exchanges, hundis and promissory notes. Thus, it is clear that the present suit which is based on the cheque given by the defendant no.2 which was dishoured, can be tried by way of summary procedure. Therefore, a summary suit filed on basis of cheque is maintainable, rather, summary suits instituted on cheques which are dishonoured will stand on a higher footing than summary suits instituted on the basis of other documents. The defendant failed to state why the suit is not maintainable under XXXVII CPC however, as the suit has been filed primarily on the basis of cheque dated 26.03.2021 in the sum of Rs. 4 lac out of which there is admission with respect to part payment of Rs. 2,50,000/- hence, the present suit under Order 37 CPC is maintainable on the basis of cheque in question. The defendant no.2 is severally NEETU NAGAR ACJM-06, RADC, New Delhi Page No. 20 of 21 Digitally signed by NEETU NAGAR (The Then JSCC-cum-ASCJ-cum-GJ Date: 2024.11.25 South-East District, Saket District Court) 16:18:10 +0530 Dated: 25.11.2024 CS SCJ 524/2023 M/s Paras Pharma vs. M/s Radiance Global & Ors.
as well as jointly liable for the payment of Rs. 1,50,000/- to the plaintiff. The firm defendant no.1 already stands dissolved. No useful purpose would be served by passing the decree against the dissolved firm.
19. In view of facts and circumstances of present case and in view of documents filed by plaintiff, and admission by way of statements of the defendant no.2 before Court as detailed in judgment dated 08.09.2022, a decree is passed under Order 12 Rule 6 CPC in favour of the plaintiff. Suit of the plaintiff is decreed and money decree is passed in favour of the plaintiff and against the defendant no.2 in sum of Rs.1,50,000/- along with pendente lite and future interest @ 6% per annum. Application for leave to defend moved on behalf of defendant no.2 stands dismissed accordingly.
20. Decree sheet be drawn accordingly.
21. Costs of the suit is awarded.
22. File be consigned to Record Room after necessary compliance.
Announced in the open court today i.e. 25.11.2024 Digitally signed (This Judgment contains 21 pages and each NEETU by NEETU NAGAR page is signed by the undersigned) NAGAR 2024.11.25 Date:
16:18:16 +0530 (NEETU NAGAR) ACJM-06/RADC/New Delhi (The Then JSCC-cum-ASCJ-cum-GJ, Saket) ACJM-06, RADC, New Delhi Page No. 21 of 21 (The Then JSCC-cum-ASCJ-cum-GJ South-East District, Saket District Court) Dated: 25.11.2024