Delhi District Court
Arvee Trading Company vs Alfa Electroics on 29 April, 2026
IN THE COURT DISTRICT JUDGE
(COMMERCIAL COURT-02) : SOUTH-EAST DISTRICT :
SAKET COURTS : NEW DELHI
Presided by: LALIT KUMAR
In the matter of:
CS (Comm) - 650/2025
Arvee Trading Company
Registered Partnership Firm,
Through its Partner / Authorized Representative
Mr. Kapil Sawhney
Having registered office at A-269, First Floor
Okhla Industrial Area Phase-I,
New Delhi -110020
..... Plaintiff
Versus
1. M/s ALFA Electronics
Through it's proprietor Deepak Sabharwal
Having its registered office at
K-53, Kotla Mubarakpur,
New Delhi - 110003.
2. Mr. Deepak Sabharwal
Proprietor of M/s ALFA Electronics
K 53, Kotla Mubarakpur,
New Delhi - 110003
Mob: - 9312224726
.....Defendants
CS (Comm.) 650/25 dated 29.04.2026 Page No. 1 of 30
Arvee Trading Co. Vs. ALFA Electronics & Anr.
Date of institution : 04.08.2025
Judgment reserved on : 24.04.2026
Date of Judgment : 29.04.2026
Final Decision : Decreed
JUDGMENT
1. The Plaintiff has filed the present suit for recovery of Rs. 4,85,624/- (Rupees Four Lakhs Eighty Five Thousand Six Hundred Twenty Four only) along with costs and pendente lite and future interest @ 24% per annum.
2. Brief facts of the case are that the plaintiff is a registered partnership firm duly registered with the Registrar of Firms. The firm has two partners namely Sh. Kapil Sawhney and Sh. Rajender Sawhney and engaged in the business of distribution, whole sale, retail of electronic items I the name and style of M/s Arvee Trading Company. Sh. Kapil Sawhney is duly authorized by the firm by way of authorized letter dated 23.02.2024 to file and institute the present suit on behalf of the partnership firm.
It is averred that defendant no.1 is the proprietorship firm and defendant no.2 is its sole proprietor. Defendant no.1 is engaged in the business of electronics items having its registered office / shop at K-53 Kotla Mubarakpur, New Delhi and defendant no.2 being its proprietor is responsible for all the day to day affairs, transactions and dealing of the defendant no.1.
CS (Comm.) 650/25 dated 29.04.2026 Page No. 2 of 30 Arvee Trading Co. Vs. ALFA Electronics & Anr.
It is further averred that defendant no.1 through its proprietor dealing with the plaintiff for the last more than 10 years and placing various orders for supply of electronics items against consideration amount on credit on different dates, against which the plaintiff firm raised various invoices / bills which were acknowledged by the defendants and defendant made the payments against the goods supplied on account / part payment to the plaintiff.
It is further averred that as per the Statement of Account / running account maintained by the plaintiff in its ordinary course of business, a sum of Rs.4,85,624/- (Rs.4,32,700/- as principal amount and Rs.52,924/- as interest @ 24% per annum is still due to be payable by the defendants to the plaintiff for the various items supplied / invoices by the plaintiff to the defendants, after adjusting the payment made by the defendant to the plaintiff.
It is further averred that in the month of July, 2023 the plaintiff approached the defendant no.2 to clear the entire amount due to be payable and the defendant no.2 being the sole proprietor of the defendant no.1 expressed his tight financial position and requested the plaintiff to grant at least four Months time to clear the entire outstanding amount. Since the parties were dealing with each other since long, the Plaintiff had no other option but to believe on the assurances given by the Defendant No.2 to the Plaintiff.
It is further averred that since December 2023, the partner of the Plaintiff firm, is visiting the Defendants thereby requesting the CS (Comm.) 650/25 dated 29.04.2026 Page No. 3 of 30 Arvee Trading Co. Vs. ALFA Electronics & Anr.
Defendants to clear the amount due to be payable, but on every occasions, the Defendant No.2 being the sole Proprietor of Defendant No.1, firm assured and requested for some time to make the payment, but refused to fulfill their part of the commitment to pay the amount due to be payable by the defendants to the Plaintiff. The Plaintiff sent Legal notice dated 09.01.2024 to defendant calling upon the defendants to pay the entire amount due to be payable, and despite the service of the said Legal notice, the Defendants neither replied to the said legal notice nor paid the amount due to be payable by the Defendant to the Plaintiff. Hence the plaintiff has filed the present suit.
It is further averred that the transaction between the parties is commercial in nature, and therefore the Defendant is liable to pay a sum of Rs. 4,85,624/- (Rs.4,32,700/- as principal and Rs.52,924/- as interest along with the interest @ 24% per annum w.e.f. 09.02.2024) when Plaintiff finally issued a Legal notice thereby directing to pay the amount and the defendant neither paid the amount due to be payable nor replied to the said Legal notice and therefore the Defendant is liable to pay principal amount of Rs.4,32,700/-, and interest of Rs.52,924/- totaling to Rs 4,85,624/- till 09.02.2024.
It is further averred that for the goods supplied by the Plaintiff to the Defendant, the Plaintiff fulfilled their commitment towards payment of the Goods and Service Tax (GST) to the GST Department.
It is further averred that the present case falls within the CS (Comm.) 650/25 dated 29.04.2026 Page No. 4 of 30 Arvee Trading Co. Vs. ALFA Electronics & Anr.
category of a "Commercial Dispute" under Section 2(1)(c)(i), 2(1)
(c) (ii) and 2 (1) (c)(xviii) of the Commercial Court Act 2015. Further it is stated that Under Section 12-A of the Commercial Court Act, 2015, the parties are obliged to explore the process of "Pre-Institution Mediation and Settlement" prior to instituting a case before this Court and accordingly the Plaintiff mediation instituted pre-institutional proceedings at Sake Court where the defendant appeared on both dates but did not give ant consent for participation in mediation. Hence, the process of mediation is treated as non starter. Hence Plaintiff has. undergone the mandatory process Under Section 12-A of the Commercial Courts Act, 2015, and due to non-starter of Mediation has accompanied this Petition before this Court.
It is further averred that the cause of action for the purpose of filing the present suit arose on various occasions when the Defendant placed an order to the Plaintiff to supply the goods to the Defendant, and as per the instructions, the Plaintiff supplied the goods to the defendant against which the defendant made part payment; it further arose on various occasions, when in discharge of their liability to pay the amount, the defendant made part payment on various occasions / dates as stated in the statement of account on each and every Month of the year 2020, 2021, 2022, 2023 and finally on 10.4.2023 paid Rs.10,000/- on 16.4.2023 paid Rs.38,000/-, on 19.4.2023 paid Rs.10,000/-, on 26.4.2023 paid Rs.39,200/-, on 23.5.2023 paid Rs.28,200/-, on 13.6.2023 paid Rs. 16,300/-, on 23.6.2023 paid Rs.24,900/- through Cheque which CS (Comm.) 650/25 dated 29.04.2026 Page No. 5 of 30 Arvee Trading Co. Vs. ALFA Electronics & Anr.
was returned and against which the said amount of Rs.24,900/- was paid by the Defendant through IMPS on 02.07.2023, therefore the cause of action arose afresh lastly on 02.07.2023 when defendant made part payment of Rs.24,900/-. It further arose in July 2023, when Partners of the Plaintiff approached the defendant and the defendant sought four months time to make the payment, the cause of action further arose in December, 2023 when partners of the plaintiff again approached the defendants and the defendants assured to make the payment as early as possible but failed to fulfill their part of the commitments, the cause of action further arose when plaintiff send a legal notice dated 09.02.2024 calling upon the defendants to make the payment and despite the service the said legal notice, the defendant neither replied the said legal notice nor paid the amount, the cause of action is still subsisting and continuing, since the defendants has filed to pay the amount to the Plaintiff, and hence the present suit is within a period of limitation.
3. Summons of the suit were ordered to be issued upon the defendant on 04.08.2025 by Ld. Predecessor of this court and defendant was served on 21.08.2025 and he appeared in court on 29.08.2025. But despite directions defendant has failed to file WS within stipulated time period, therefore, vide order dated 08.12.2025 the defence of defendant was struck off in view of the Order 8 rule 1 of the CPC.
CS (Comm.) 650/25 dated 29.04.2026 Page No. 6 of 30 Arvee Trading Co. Vs. ALFA Electronics & Anr.
4. Pleading are completed and from the pleadings of the parties following issues were framed:
1. Whether the plaintiff is entitled to a money decree to the tune of Rs.4,85,624/- alongwith pendente lite and future interest, if yes, then at what rate and for which period?OPP
2. Whether the suit is within limitation?OPP
3. Whether the plaintiff has complied with Section 12A of the Commercial Courts Act?OPP
4. Relief.
5. Plaintiff in order to substantiate its claim has filed evidence by way of affidavit and examined Sh. Kapil Sawhney, as PW-1 who tendered his evidence by way of affidavit Ex.PW1/A and proved the following documents:-
i. Copy of certificate of Registration Document as Mark-A, ii. Copy of authorization letter dated 23.02.2024, authorizing Sh. Kapil Sawhney Ex.PW1/2, iii. Various invoices/bills for the goods supplied by the plaintiff to the defendant Ex.PW1/3(colly), iv. Statement of account showing the transactions between the parties Ex.PW1/4 (colly), v. IMPS dated 02.07.2023 for an amount of Rs.24,900/-
Ex.PW1/5, vi. Copy of legal notice dated 09.01.2024 Ex.PW1/6, vii. Post receipt dated 09.01.2024 Ex.PW1/7, viii. Print outs of the GST Ex.PW1/8 and ix. Certificate u/s 63 (2) BSA, 2023 Ex.PW1/9.
CS (Comm.) 650/25 dated 29.04.2026 Page No. 7 of 30 Arvee Trading Co. Vs. ALFA Electronics & Anr.
PW-1 was cross examined by Ld. Counsel for defendant and during cross examination he deposed that there are two partners in my firm. He is managing the business of firm. He has all the roles to play in his business though there is no his employees. He has currently 10 employees in his firm. He has been dealing with the defendant for more than 15 years. They maintain ledger for our dealers for all kinds of business transactions.
The witness had been shown the accounts statement Ex.PW1/4 (colly).
Q. Is it correct that your accounts statement Ex.PW1/4 (colly) showing opening balance of Rs.2,36,430/- as on 01.04.2021? Ans. Yes, it is correct. Vol. He has to see the closing balance of 31.03.2021.
He admitted that the present suit is filed on the basis of running account / ledger / ledgers. He further admitted that the opening balance shown is carried forward from the previous financial year. He further admitted that he has not independently calculated the opening balance in the ledger it has been carried forward from the previous years. He further admitted that they have previous years ledger accounts to support the opening balance shown in Ex.PW1/4 (colly).
Q. Is it correct that the ledger account Ex.PW1/4 (colly) filed in this suit true and correct?
Ans. Ex.PW1/4 (colly) is correct.
PW-1 admitted that the opening balance is carried forward from the previous year. He further admitted that without looking at CS (Comm.) 650/25 dated 29.04.2026 Page No. 8 of 30 Arvee Trading Co. Vs. ALFA Electronics & Anr.
previous ledgers, he cannot verify the opening balance. Q. Can you bring ledger account and bank statements w.e.f 01.04.2015 to 30.04.2021 with regard to the defendant with VAT /GST number 07AARPS5019G1ZD?
Ans. I can bring the same.
PW-1 brought the ledger account from 01.04.2015 to 02.07.2023 which Ex.PW1/D1(colly) running into pages 1 to 23 and he had also brought original Form A and Form B which was marked as Mark A the same PW1/1 (OCR) (colly).
He deposed that plaintiff used to share ledger account statement with the defendant as an when asked by the defendant during the course of business.
Q. Is it correct that you had shared the ledger account for the period of 01.04.2015 to 31.03.2016?
Ans. I do not remember.
The defendant has shown the copy of the ledger account 01.04.2015 to 31.03.216 and has been asked as to whether these ledger statement pertain to plaintiff, on this witness replied the aforesaid copy had not been supplied by the plaintiff. Vol. Defendant may also verify the same from our ledger which is on record.
PW-1 admitted that as per the ledger the bill no.806 of dated 15.09.2017 the total value to invoice was Rs.68,800/-. He admitted that they have received a payment of Rs.47,300/- on dated 25.07.2018. He denied that the credit note of Rs.21,500/- for sales CS (Comm.) 650/25 dated 29.04.2026 Page No. 9 of 30 Arvee Trading Co. Vs. ALFA Electronics & Anr.
return was to be given to the defendant which was not adjusted or sent to the accounts of the defendant. He admitted that he was asked to bring the bank statements as per the last order of this court. He admitted that he had not brought the bank account statements w.e.f. 01.04.2015 to 30.04.2021 with regard to defendant with VAT/GST number 07AARPS5019G1ZD as bank did not provided me as its old record. He has not applied to the bank for providing him the bank statements. He was not told by anybody. He denied that he has not brought the bank statement intentionally.
Witness was again shown PW1/4 (colly). He admitted that the opening balance as on 01.04.2021 is Rs.2,36,430/-. He denied that the defendant paid Rs.24,950/- on 02.04.2021 vide cheque no. 343802 and same is not reflecting in his ledger account. He denied that vide cheque no.343803 dated 05.04.2021 of Rs.23.400/- was paid which is not reflecting in your account.
PW-1 admitted that he has filed two different ledgers one i.e. Ex.PW1/4 and Ex.PW1/5 alongwith the suit and another i.e. Ex.PW1/D1 (Colly) subsequently during the cross examination, as it was asked. He further admitted that the ledger account filed alongwith suit and subsequently are true and correct. The opening balance in the Ex.PW1/4 as on 01.04.2021 is Rs.2,36,430/-. The documents which he had filed subsequently is incomplete (at page no.22).
Q: Can you tell the ledger account filed with the suit or the ledger account filed subsequently is a complete ledger account, the CS (Comm.) 650/25 dated 29.04.2026 Page No. 10 of 30 Arvee Trading Co. Vs. ALFA Electronics & Anr.
opening balance as on 01.04.2021 shown as Rs. 2,36,430/- in Ex.PW1/4 or the opening balance as on 01.04.2021 shown as Rs. 4,52,700/- at page no.22 in Ex.PW1/D1 (colly), which one is correct?
A: The opening balance as on 01.04.2021 of Rs. 2,36,430/- is correct, however, the opening balance at page no.22 is incomplete without entries and page no.20 is having complete entries.
PW-1 admitted that both the entries are not identical. He denied that the ledger account was not properly maintained and that is why there is apparent in-discrepancy in the ledger account filed by the plaintiff company. He denied that the ledger entries are manipulated by the plaintiff company.
PW-1 stated that he is B.(Com) pass. He admitted that he does not do the ledger entries. Plaintiff firm's accountant maintains the ledger entries. He admitted that present suit has been filed based on ledger account and invoices. He further admitted that plaint or his affidavit do not mention any specific invoice numbers with dates and amount which is due on defendant. (Vol. Running ledger account has been submitted). He admitted that the claim of the plaintiff is not based on any specific invoice but is based on all the invoices contained in ledger. He cannot tell the amount due in the ledger i.e. Rs.4,32,700/- pertaining to which particular invoices. He denied that the certificate filed by the plaintiff company under Section 63 BSA only states that the printouts are taken from the system, however, the same does not state each entries in the CS (Comm.) 650/25 dated 29.04.2026 Page No. 11 of 30 Arvee Trading Co. Vs. ALFA Electronics & Anr.
statement of account is correct. He denied that the certificate filed under Section 63 BSA is not as per mandate of law. He denied that the ledger account has been manipulated by the plaintiff company and several entries in statement of account are not accounted for. He further denied that the amount claimed in the suit is based on fabricated, manipulated ledger account filed by the plaintiff company in this court. He denied that he is not managing the ledger accounts, hence, he is not competent to file the affidavit under Section 63 of BSA. He denied that he is deposing falsely.
6. Having heard the arguments and perused the record carefully. This court has gone through the testimonies of witnesses of both the parties and on the basis of documents and pleadings, the issue wise findings are as follows:
ISSUE NO. 1Whether the plaintiff is entitled to a money decree in the sum of Rs. 4,85,624/- along with pendente lite and future interest, if yes, then at what rate and for which period?OPP
7. The adjudication of the present issue is governed by Sections 101 to 103 of the Bharatiya Sakshya Adhiniyam, 2023, which embody the fundamental rule that the burden of proof lies upon the party who asserts a fact. The standard of proof in civil proceedings is one of preponderance of probabilities. The Hon'ble Supreme Court in Rangammal v. Kuppuswami, (2011) 12 SCC 220, has authoritatively held that in a civil case, the burden of proof is CS (Comm.) 650/25 dated 29.04.2026 Page No. 12 of 30 Arvee Trading Co. Vs. ALFA Electronics & Anr.
discharged by showing that the preponderance of probabilities is in favour of the party who asserts the fact.
It is equally well settled that once a party adduces prima facie evidence, the evidentiary burden shifts to the adversary. In Anil Rishi v. Gurbaksh Singh, (2006) 5 SCC 558, the Hon'ble Supreme Court observed that the initial burden lies on the plaintiff, but once he adduces evidence which, if unrebutted, would entitle him to a decree, the onus shifts.
In the present case, the defence of the defendants stood struck off vide order dated 08.12.2025 under Order VIII Rule 1 of CPC. The legal consequence thereof is of considerable significance. The Hon'ble Supreme Court in SCG Contracts India Pvt. Ltd. v. K.S. Chamankar Infrastructure Pvt. Ltd., (2019) 12 SCC 210, in the context of commercial suits, held that the consequence of not filing the written statement within the stipulated period is that the defendant forfeits the right to file the same, and the Court cannot extend time. Further, in Balraj Taneja v. Sunil Madan, (1999) 8 SCC 396, it was held that where the defendant has not filed a written statement, the Court can proceed to pronounce judgment on the basis of the plaint and evidence, provided the same inspires confidence.
Thus, the plaintiff's evidence is to be tested on intrinsic worth, and in the absence of a legally tenable defence, a lesser degree of rebuttal suffices.
Perusal of record shows that the plaintiff has instituted the present commercial suit seeking recovery of Rs. 4,85,624/- arising CS (Comm.) 650/25 dated 29.04.2026 Page No. 13 of 30 Arvee Trading Co. Vs. ALFA Electronics & Anr.
from a running business account. The foundational facts, as pleaded and proved, are as follows:
(i) The plaintiff is a duly registered partnership firm engaged in the business of distribution of electronic goods.
(ii) The defendants, through defendant no.2 (sole proprietor), had been purchasing goods on credit over a substantial period.
(iii) Goods were supplied against invoices and duly reflected in a running ledger account.
(iv) Part-payments were made intermittently, thereby acknowledging liability.
(v) After adjustment, a principal sum of Rs. 4,32,700/- remained outstanding.
(vi) The last payment dated 02.07.2023 (IMPS) constitutes a clear acknowledgment.
(vii) A legal notice dated 09.01.2024 was issued and remained unreplied.
These facts establish a continuing commercial transaction governed by a running account, a well-recognized mercantile practice.
To prove its case, the plaintiff examined PW-1, Sh. Kapil Sawhney, partner of the firm, who tendered his affidavit Ex.PW1/A and proved all relevant documents. His testimony unequivocally establishes that subsistence of business relationship between the parties , supply of goods, maintenance of ledger accounts in ordinary course and outstanding liability. His CS (Comm.) 650/25 dated 29.04.2026 Page No. 14 of 30 Arvee Trading Co. Vs. ALFA Electronics & Anr.
deposition remained consistent, coherent, and unshaken on material particulars.
During cross examination of PW1, the defendants sought to impeach the credibility of PW-1 on limited grounds during cross- examination. It is trite law that mere suggestions in cross- examination do not amount to proof. The Hon'ble Supreme Court in Vidhyadhar v. Manikrao, (1999) 3 SCC 573 held that where a party does not enter the witness box or fails to produce evidence, an adverse inference may be drawn against him.
The defendants, having neither led evidence nor produced any documentary material, cannot rely upon speculative suggestions. The principal attack of the defendants pertains to an alleged discrepancy in the opening balance between Ex.PW1/4 and Ex.PW1/D1. Further PW-1 clarified that Ex.PW1/D1 is a complete ledger spanning multiple financial years, whereas Ex.PW1/4 is only an extract. The explanation is cogent and consistent with commercial accounting practices. Minor discrepancies attributable to incomplete extracts do not vitiate the evidentiary value. The Hon'ble Supreme Court in State of U.P. v. Krishna Gopal, (1988) 4 SCC 302, though in criminal context, laid down a principle equally applicable that minor discrepancies which do not go to the root of the matter cannot be made a ground to reject the evidence in its entirety.
The objection that PW-1 is not competent as he did not personally maintain accounts is devoid of merit. In A.C. Narayanan v. State of Maharashtra, (2014) 11 SCC 790, the Hon'ble Supreme CS (Comm.) 650/25 dated 29.04.2026 Page No. 15 of 30 Arvee Trading Co. Vs. ALFA Electronics & Anr.
Court held that an authorised representative who has knowledge of the transactions can depose and prove the case.
Being a partner with supervisory control over accounts, PW-1 is a competent witness.
The plaintiff has proved a comprehensive documentary chain i.e invoices (Ex.PW1/3), ledger accounts (Ex.PW1/4 & Ex.PW1/D1) , IMPS proof (Ex.PW1/5), GST records (Ex.PW1/8) and Legal notice (Ex.PW1/6). These documents form a consistent and interlocking evidentiary structure, establishing liability beyond doubt.
Section 32 of the Bharatiya Sakshya Adhiniyam, 2023 (BSA), governs admissibility of books of account. The Hon'ble Supreme Court in Chandradhar Goswami v. Gauhati Bank Ltd., AIR 1967 SC 1058, held that entries in books of account, though relevant, are not by themselves sufficient to charge any person with liability. However, the court further clarified that such entries must be supported by independent evidence.
In the present case, the ledger entries are corroborated by invoices, GST returns, and payment records. Thus, the ratio of the said judgment stands fully satisfied and distinguished.
The nature of the transaction is that of a running and non- mutual account, where goods are supplied on credit and payments are adjusted periodically. The Hon'ble Supreme Court in Bharat Skins Corporation v. Taneja Skins Company Pvt. Ltd., (2012) 3 SCC 562 held that in commercial dealings involving a running CS (Comm.) 650/25 dated 29.04.2026 Page No. 16 of 30 Arvee Trading Co. Vs. ALFA Electronics & Anr.
account, it is not necessary to prove each individual transaction if the account is maintained in regular course and duly corroborated.
The plaintiff's case squarely falls within this principle. Under section 19 of the Limitation Act and settled contract law, part-payment extends limitation and constitutes acknowledgment. The IMPS payment dated 02.07.2023 constitutes acknowledgment of liability. Further, the failure of the defendants to reply to the legal notice is a significant circumstance. In Kalu Ram v. Sita Ram, (1980) 4 SCC 33, the Hon'ble Supreme Court held that failure to reply to a notice may, in appropriate cases, give rise to an inference of admission.
The defendants have urged that adverse inference be drawn under Section 119, Illustration (e) of the Bharatiya Sakshya Adhiniyam (BSA), 2023 is untenable. As per Section 119 Illustration (e) of BSA, adverse inference arises only when evidence is deliberately withheld and is essential. The law on this aspect is well settled. In Union of India v. Ibrahim Uddin, (2012) 8 SCC 148, the Hon'ble Supreme Court held that adverse inference can be drawn only when a party deliberately withholds best evidence.
In the present case ledger, invoices, GST records are primary evidence and bank statements are merely corroborative. Hence, no adverse inference arises.
The plaintiff has filed a certificate under Section 63 BSA (equivalent to Section 65B Evidence Act). The objection that certificate must certify correctness of each entry is misconceived.
CS (Comm.) 650/25 dated 29.04.2026 Page No. 17 of 30 Arvee Trading Co. Vs. ALFA Electronics & Anr.
Law requires certification of mode of production, not substantive correctness. The Hon'ble Supreme Court in Arjun Panditrao Khotkar v. Kailash Kushanrao Gorantyal, (2020) 7 SCC 1 held that the requirement of certificate is to ensure authenticity of the electronic record, not to prove its contents.
Therefore, the objection of the defendant is misconceived. Upon a comprehensive appreciation of pleadings, oral evidence, documentary record, and legal principles, this court finds that (i) The plaintiff has proved the supply of goods through invoices, (ii) The ledger account is regularly maintained and corroborated, (iii) The outstanding balance stands duly established.
(iv) The defendants have failed to rebut the same by any cogent evidence, (v) The objections raised are either legally untenable or factually unsubstantiated.
The evidence led by the plaintiff inspires confidence and satisfies the standard of preponderance of probabilities.
In view of the foregoing analysis, this court holds that the plaintiff has successfully established its entitlement to the suit amount.
Now this Court will touch upon the entitlement of interest by the plaintiff i.e pendente-lite and future interest. The grant of pendente lite and future interest is governed by Section 34 of the Code of Civil Procedure, 1908. In cases arising out of commercial transactions, the proviso to Section 34 assumes significance. The proviso to Section 34 of CPC stipulates that where the liability arises out of a commercial transaction, the rate of future interest CS (Comm.) 650/25 dated 29.04.2026 Page No. 18 of 30 Arvee Trading Co. Vs. ALFA Electronics & Anr.
may exceed 6% per annum, having regard to contractual rate, if any or the rate at which moneys are lent by nationalised banks in relation to commercial transactions.
It is settled that the grant of interest is a matter of judicial discretion, to be exercised on sound legal principles. The Hon'ble Supreme Court in Central Bank of India v. Ravindra, (2002) 1 SCC 367, authoritatively held that the award of interest under Section 34 CPC is discretionary, but such discretion has to be exercised reasonably, judiciously and for reasons. Further, in State of Rajasthan v. Ferro Concrete Construction Pvt. Ltd., (2009) 12 SCC 1, the Court observed that the rate of interest must be reasonable and in consonance with prevailing commercial rates.
The present transaction is admittedly commercial in nature, involving supply of goods in the course of business, as reflected from the record. Therefore, the proviso to Section 34 CPC squarely applies. The Hon'ble Supreme Court in Hyder Consulting (UK) Ltd. v. State of Orissa, (2015) 2 SCC 189, held that in commercial transactions, the Court is empowered to grant interest at a rate higher than the ordinary rate, depending upon the facts and circumstances of the case."
Though the plaintiff has claimed interest @ 24% per annum, such rate appears excessive and penal in nature, in the absence of a specific contractual stipulation proved on record. It is a settled proposition that Courts must moderate excessive claims of interest. The Hon'ble Supreme Court in Karnataka Power Corporation Ltd. v. K. Thangappan, (2006) 4 SCC 322, held that even where a CS (Comm.) 650/25 dated 29.04.2026 Page No. 19 of 30 Arvee Trading Co. Vs. ALFA Electronics & Anr.
higher rate is claimed, the Court must award reasonable interest, keeping in view the facts and circumstances.
Similarly, in Rajendra Construction Co. v. Maharashtra Housing & Area Development Authority, (2005) 6 SCC 678, it was observed that the Court has the power to reduce the rate of interest if it is found to be excessive or unconscionable.
In the absence of a proved contractual rate, the Court must take into account prevailing lending rates of nationalised banks, nature of transaction, conduct of parties and overall equities. The Hon'ble Supreme Court in Punjab & Sind Bank v. Allied Beverage Company Pvt. Ltd., (2010) 10 SCC 640, held that interest awarded must be realistic and aligned with commercial banking rates.
Presently, commercial lending rates broadly range between 8% to 12% per annum. In the facts of the present case the transaction is commercial, the defendants have withheld payment without justification, the plaintiff has been deprived of legitimate dues, however, no contractual rate of 24% has been proved. Therefore, a balanced and reasonable approach is warranted. This Court is of the considered view that interest @ 9% per annum meets the ends of justice, being fair to the plaintiff, non-punitive to the defendants and consistent with prevailing commercial rates. Accordingly, it is hereby held that the plaintiff is entitled to pendente lite and future interest @ 9% per annum on the principal sum adjudged, from the date of filing of the suit till realisation. This rate is awarded in exercise of discretion under Section 34 CPC, having regard to the commercial nature of the transaction and CS (Comm.) 650/25 dated 29.04.2026 Page No. 20 of 30 Arvee Trading Co. Vs. ALFA Electronics & Anr.
the settled principles laid down by the Hon'ble Supreme Court. The award of interest @ 9% per annum strikes a judicious balance between compensating the plaintiff for deprivation of money and ensuring that the rate remains reasonable and not punitive. The same is in consonance with the settled doctrine that interest is compensatory and not penal in nature.
Accordingly, Issue No. 1 is decided in favour of the plaintiff and against the defendants.
ISSUE NO. 2Whether the suit of the plaintiff is barred by limitation?OPP
8. The present issue raises a plea of limitation, which is a mixed question of law and fact, requiring examination of pleadings, evidence, and the governing statutory framework under the Limitation Act, 1963. The onus to establish that the suit is barred by limitation lies squarely upon the plaintiff, in terms of Sections 101-103 of the Bharatiya Sakshya Adhiniyam, 2023. The Hon'ble Supreme Court in P. Radha Bai v. P. Ashok Kumar, (2019) 13 SCC 445, has held the the question of limitation being a mixed question of law and fact, the burden to prove that the claim is barred rests upon the party who asserts it.
It is therefore incumbent upon the defendants to demonstrate, by cogent evidence, that the suit is beyond the prescribed period. A mere assertion, bereft of particulars, does not CS (Comm.) 650/25 dated 29.04.2026 Page No. 21 of 30 Arvee Trading Co. Vs. ALFA Electronics & Anr.
suffice.
The material facts relevant for adjudication of limitation, as emerging from the record, are as follows:
(i) The parties were engaged in continuous commercial dealings involving supply of goods on credit basis.
(ii) A running and open account was maintained by the plaintiff in the ordinary course of business.
(iii) Transactions spanned multiple financial years, reflected in ledger accounts (Ex.PW1/4 and Ex.PW1/D1),
(iv) The defendants made intermittent part-payments, including an admitted payment dated 02.07.2023 via IMPS (Ex. PW1/5).
(v) A legal notice dated 09.01.2024 was issued and remained unreplied.
(vi) The present suit has been instituted in the year 2025.
The above factual matrix unmistakably indicates a continuing commercial relationship governed by a running account, as opposed to isolated and discrete transactions.
The plaintiff examined PW-1, Sh. Kapil Sawhney, who, in his affidavit Ex.PW1/A, deposed unequivocally that the parties maintained a running account, goods were supplied from time to time, payments were received intermittently and the last payment was received on 02.07.2023. The testimony of PW-1 is consistent with the documentary record and has remained materially unshaken.
CS (Comm.) 650/25 dated 29.04.2026 Page No. 22 of 30 Arvee Trading Co. Vs. ALFA Electronics & Anr.
A careful scrutiny of the cross-examination reveals that no suggestion was put disputing the last payment dated 02.07.2023, no challenge was laid to the continuity of the ledger account and no case of account closure or final settlement was put to the witness.
It is a settled principle that failure to confront a witness on a material fact amounts to acceptance thereof. The Hon'ble Supreme Court in Laxmibai v. Bhagwantbuva, (2013) 4 SCC 97, has held that there a party fails to cross-examine a witness on a material aspect, the statement of the witness on that aspect is deemed to have been accepted.
The defendants, having failed to challenge the critical fact of last payment, cannot now be permitted to dispute the same.
The plaintiff has proved ledger accounts (Ex.PW1/4 and Ex. PW1/D1), invoices (Ex.PW1/3 colly), IMPS payment dated 02.07.2023 (Ex.PW1/5) and legal notice (Ex.PW1/6).
These documents collectively establish continuity of transactions, subsistence of account and acknowledgment of liability within limitation.
The ledger reflects a continuous and systematic record of dealings up to 2023.
In cases of mutual, open and current accounts, limitation is governed by Article 1 of the Limitation Act, whereas in non- mutual running accounts, Article 14/15 may apply.
The distinguishing feature is the continuity of dealings and reciprocal adjustments. The Hon'ble Supreme Court in Hindustan Forest Company v. Lal Chand, AIR 1959 SC 1349, held that in the CS (Comm.) 650/25 dated 29.04.2026 Page No. 23 of 30 Arvee Trading Co. Vs. ALFA Electronics & Anr.
case of a mutual, open and current account, limitation runs from the close of the year in which the last item admitted or proved is entered.
Even otherwise, in a running account supported by part- payments, limitation stands extended by operation of Sections 18 and 19 of the Limitation Act.
Section 19 of the Limitation Act provides that part-payment made before expiry of limitation, gives rise to a fresh period of limitation from the date of such payment. The Hon'ble Supreme Court in Food Corporation of India v. Assam State Cooperative Marketing Federation Ltd., (2004) 12 SCC 360, held that part- payment of a debt before expiry of limitation extends the period of limitation and a fresh period begins from the date of such payment.
In the present case, the IMPS payment dated 02.07.2023 squarely attracts section 19 and furnishes a fresh starting point.
Apart from part-payment, acknowledgment of liability also extends limitation in view of the provision of Section 18 of Limitation Act. The Hon'ble Supreme Court in Sampuran Singh v. Niranjan Kaur, (1999) 2 SCC 679, held that in acknowledgment of liability made before expiry of limitation gives a fresh starting point for limitation.
The continuous course of dealings and part-payments constitute acknowledgment within the meaning of law.
The present case involves a continuing cause of action, arising out of a subsisting commercial relationship. The Hon'ble Supreme Court in Balakrishnan v. M.A. Krishnamurthy, (1998) 7 CS (Comm.) 650/25 dated 29.04.2026 Page No. 24 of 30 Arvee Trading Co. Vs. ALFA Electronics & Anr.
SCC 123, observed that the rules of limitation are not meant to destroy rights but to ensure that parties do not resort to dilatory tactics.
The courts are thus, required to adopt a pragmatic and justice-oriented approach, particularly in commercial matters involving running accounts.
The defendants have taken a plea that the suit is barred by limitation. However, the said plea is devoid of merit for the reasons that the defendants have neither specified the date from which limitation is alleged to run, nor produced any document to substantiate closure of accounts.
Further, the IMPS payment dated 02.07.2023 stands uncontroverted and extends limitation. Moreover, the defendants have failed to produce their own ledger or accounts to contradict the plaintiff's record.
The judgments relied upon by the defendants pertain to isolated transactions, absence of acknowledgment and lack of continuous dealings.
The present case, however, involves a running account, acknowledgment through payment and continuous cause of action. Hence, the said authorities are clearly distinguishable on facts and inapplicable.
The plaintiff has rightly contended that the account is continuous and subsisting, limitation stands extended by part- payment and the suit is within the prescribed period. These submissions are borne out by the record and supported by settled CS (Comm.) 650/25 dated 29.04.2026 Page No. 25 of 30 Arvee Trading Co. Vs. ALFA Electronics & Anr.
legal principles.
Upon a holistic consideration of the pleadings, evidence and legal position, this court finds that :
(i) The transactions between the parties constitute a running account.
(ii) The last payment dated 02.07.2023 extends limitation under Section 19.
(iii) The suit instituted in 2025 is well within limitation.
(iv) The defendants have failed to discharge the burden cast upon them.
The plea of limitation raised by the defendants is therefore untenable in law and devoid of factual foundation.
Accordingly, Issue No. 2 is decided in favour of the plaintiff and against the defendants. It is held that the suit is within limitation and maintainable in law.
ISSUE NO.3 Whether the suit is liable to be rejected for non-compliance of mandatory pre-institution mediation under Section 12A of the Commercial Courts Act, 2015?(OPP).
9. Section 12A of the Commercial Courts Act, 2015 mandates that a commercial suit which does not contemplate urgent interim relief shall not be instituted unless the plaintiff exhausts the remedy of pre-institution mediation (PIM).
CS (Comm.) 650/25 dated 29.04.2026 Page No. 26 of 30 Arvee Trading Co. Vs. ALFA Electronics & Anr.
The provision reads, in substance, that the plaintiff must approach the designated authority for mediation prior to filing the suit. The Hon'ble Supreme Court in Patil Automation Pvt. Ltd. v. Rakheja Engineers Pvt. Ltd., (2022) 10 SCC 1, authoritatively held that Section 12A of the Commercial Courts Act is mandatory in nature and a suit instituted without exhausting the remedy of pre- institution mediation is liable to be rejected. However, the Court also clarified that the object of Section 12A is to provide a speedy, efficacious and amicable resolution mechanism, and not to defeat substantive rights on technical grounds.
From the record, it emerges that the plaintiff initiated pre- institution mediation proceedings prior to filing the present suit. The defendants did not participate meaningfully in the mediation process. A non-starter report was issued by the concerned authority. Thereafter, the present suit was instituted. Thus, the statutory requirement under Section 12A stands complied with.
Moreover, PW-1, in his affidavit Ex.PW1/A, has specifically deposed that pre-institution mediation was initiated, notice was issued to the defendants, the defendants failed to participate and that the mediation proceedings culminated in a non-starter. This testimony is corroborated by documentary record forming part of the case file.
A careful reading of the cross-examination of PW1 reveals that no suggestion was put denying initiation of mediation, no challenge was made to the issuance of non-starter report and no contrary evidence was produced. The Hon'ble Supreme Court in CS (Comm.) 650/25 dated 29.04.2026 Page No. 27 of 30 Arvee Trading Co. Vs. ALFA Electronics & Anr.
Laxmibai v. Bhagwantbuva, (2013) 4 SCC 97, held that failure to cross-examine on a material point amounts to acceptance of the testimony.
The defendants are therefore deemed to have accepted the factum of mediation.
The question that arises is whether issuance of a non-starter report satisfies the mandate of Section 12A.
The answer is in the affirmative. The Hon'ble Supreme Court in Patil Automation Pvt. Ltd. (supra) clarified that if the opposite party does not participate in the mediation process, the requirement of Section 12A stands satisfied upon issuance of a non-starter report.
The purpose of the statute is to provide an opportunity for settlement, it does not compel a party to secure settlement at any cost.
The defendants have contended that pre-institution mediation was not properly conducted and the requirement under Section 12A was not fulfilled. These submissions are untenable for the reasons that compliance is evident from record. The mediation proceedings and non-starter report form part of the record and there is no challenge to the authenticity of these documents.
The defendants chose not to participate in mediation. A party cannot be permitted to take advantage of its own default. The Hon'ble Supreme Court in Union of India v. Major General Madan Lal Yadav, (1996) 4 SCC 127, held that a party cannot take advantage of its own wrong.
CS (Comm.) 650/25 dated 29.04.2026 Page No. 28 of 30 Arvee Trading Co. Vs. ALFA Electronics & Anr.
Section 12A of CCA, is intended to promote settlement, not to create a technical bar. The Hon'ble Supreme Court in Patil Automation (supra) emphasized that the provision is procedural in nature but mandatory in its application, and must be construed in a manner that advances its object.
The defendants have failed to demonstrate any prejudice caused to them. The Hon'ble Supreme Court in Kailash v. Nanhku, (2005) 4 SCC 480, held that procedural laws are handmaid of justice and should not be used to defeat substantive rights.
The defendants have relied upon judgments where no mediation was initiated at all or suits were filed in complete disregard of Section 12A.
Those cases are distinguishable on facts, as in the present case mediation was duly initiated, notice was issued, proceedings were conducted and non-starter report was issued. Hence, the ratio of such judgments is inapplicable.
The plaintiff has correctly contended that the requirement of Section 12A stands fulfilled, the defendants' non-participation cannot defeat the suit and the suit is maintainable. These submissions are well-founded and supported by record and law.
Upon a comprehensive analysis, this court holds that (i) The plaintiff has complied with Section 12A of the commercial courts act, (ii) The non-starter report satisfies the statutory requirement,
(iii) The defendants have failed to prove non-compliance, (iv) The objection is devoid of merit.
CS (Comm.) 650/25 dated 29.04.2026 Page No. 29 of 30 Arvee Trading Co. Vs. ALFA Electronics & Anr.
Accordingly, Issue No.3 is decided in favour of the plaintiff and against the defendants. It is held that the suit is not barred for want of pre-institution mediation and is maintainable in law.
ISSUE NO.4 Relief?
10. As a net result of the aforesaid, the suit of the Plaintiff is decreed for an amount of Rs. 4,85,624/- (Rupees Four Lakhs Eighty Five Thousand Six Hundred Twenty Four only) along with pendente lite and future interest @ 9% per annum on the principal sum adjudged, from the date of filing of the suit till realisation.
11. The Suit of the Plaintiff is decreed with cost accordingly.
12. Decree sheet be drawn by the Reader of this Court and file be consigned to Record Room.
Announced & dictated in the Digitally signed by lalit lalit kumar Date:
open Court on 29.04.2026 kumar 2026.04.29
17:09:52
+0530
(LALIT KUMAR)
District Judge Commercial)-02
South-East, Saket Court
CS (Comm.) 650/25 dated 29.04.2026 Page No. 30 of 30
Arvee Trading Co. Vs. ALFA Electronics & Anr.