Delhi District Court
Shriram Enterprises vs Gurantors Infrastructure Pvt Ltd on 13 March, 2024
1
In the Court of Dig Vinay Singh, District Judge (Commercial Court)-03,
West, Tis Hazari Courts Extension Block, Delhi
CNR No. DLWT01-004797-2023
CS (COMM) No.436/2023
M/S SHRIRAM ENTERPRISES
Through its partner
Sh. Sanjay Bansal
Having registered office at:
B-9, Rajouri Garden,
New Delhi-110027 ......... Plaintiff
Versus
M/S GUARANTORS INFRASTRUCTURE PVT. LTD.
Through its Director
R/o 87 GF, Khirki Village,
Malviya Nagar, South West,
New Delhi-110017 ...... Defendant
Date of institution : 03.06.2023
Date of arguments : 11.03.2024
Date of judgment : 13.03.2024
JUDGMENT
1. This is a suit for recovery of ₹9,76,297/- (₹ Nine Lakh Seventy-Six Thousand Two Hundred Ninety-Seven). The dispute between the parties is a 'commercial dispute' within the definition of Section 2 (1)
(c) of the Commercial Courts Act, 2015. Pre-litigation mediation between the parties remained unsuccessful and there is a Non-Starter Report dated 21.11.2022, issued by the concerned District Legal Services Authority.
Judgment dated 13.03.2024; CNR No. DLWT01-004797-2023; CS(COMM) No.436/2023; M/s Shriram Enterprises Vs. M/s Guarantors Infrastructure Pvt. Ltd. Page 1 of 27 2
2. Plaint avers that the plaintiff partnership firm deals in business of Sika Viscocrete, Sikaplast, Sikarep Microcrte. The defendant company used to purchase those goods from the plaintiff and other allied materials between 20.09.2019 to 01.04.2022 under various invoices. The defendant company was to pay price of the goods within 30 days of receipt of goods. The defendant received the goods and acknowledged the same. The defendant did not raise any complaint or objection regarding quality or quantity of the material purchased. The defendant even obtained benefits from the GST department regarding the goods in question. As per the plaintiff, the goods were supplied for various branch offices of the defendant, including at Gurugram. The defendant used to collect the goods from the office of the plaintiff and used to transport the goods at its own cost. Purchase orders used to be placed by the defendant through mobile and other electronic modes. The last payment made by the defendant was on 03.02.2022. The plaintiff has been maintaining an open mutual current and running account qua the dealings with the defendant and as per the ledger of the plaintiff, a total sum of ₹7,21,241/- is due against the price of goods supplied to the defendant. On this amount the plaintiff has added interest @24% per annum, to the tune of ₹2,55,056/-, thereby making the suit amount of ₹9,76,297/-. The plaintiff claims that legal notice dated 15.07.2022 sent to the defendant company remained unanswered.
3. The sole defendant company contested the suit claiming that in the pre-mediation proceedings initiated by the plaintiff the amount due Judgment dated 13.03.2024; CNR No. DLWT01-004797-2023; CS(COMM) No.436/2023; M/s Shriram Enterprises Vs. M/s Guarantors Infrastructure Pvt. Ltd. Page 2 of 27 3 was claimed to be ₹4,63,160/- only, which includes ₹4,41,946/- as the principal amount and interest of ₹21,214/-. Whereas, the present suit has been filed for almost double that amount i.e. ₹9,76,297/-. That there is an arbitration clause between the parties and, therefore, the present suit could not have been filed. That this Court has no territorial jurisdiction as the goods were supplied to the defendant at Gurugram in Haryana. That the material supplied by the plaintiff was of inferior quality and despite the plaintiff being informed about it, the plaintiff did not take any steps to replace the material. The suit is also claimed to be bad for non-joinder of necessary parties, claiming that the Directors of the defendant company were necessary parties. In reply to the averments in the plaint that goods were supplied to the defendant between 20.09.2019 to 01.04.2022, the defendant claims that the defendant never made any purchase on 01.04.2022 as claimed by the plaintiff and there is no transaction dated 01.04.2022 between the parties. Rather it is claimed that after January, 2020, there was no purchase made by the defendant from the plaintiff. It is also claimed that the invoices relied upon by the plaintiff mostly do not bear signatures of the defendant against receipt of goods and also there was no fixed stipulated period within which the amount was to be paid. As to the rate of interest, it is claimed that the defendant never agreed to the rate of interest claimed.
4. From the pleadings of the parties following issues were framed:-
"1. Whether this Court has no territorial jurisdiction to try the suit? OP defendant.
Judgment dated 13.03.2024; CNR No. DLWT01-004797-2023; CS(COMM) No.436/2023; M/s Shriram Enterprises Vs. M/s Guarantors Infrastructure Pvt. Ltd. Page 3 of 27 4
2. Whether the goods supplied by the plaintiff to the defendant were of inferior quality and not as per the quality ordered for, and / or whether the plaintiff avoided to replace those sub-standard goods despite being informed by the defendant? OP defendant.
3. Whether the suit is not maintainable for non-joinder of necessary parties as pleaded by the defendant? OP defendant.
4. Whether the plaintiff is entitled to recovery of Rs. 7,21,241/-( Rs. Seven Lakhs Twenty-One Thousand Two Hundred Forty-One Only) towards price of the goods supplied and outstanding from the defendant? OP plaintiff.
5. Whether the plaintiff is entitled to interest to the tune of Rs. 2,55,056/- which is calculated at the rate of 24 % per annum on the above mentioned amount as claimed by the plaintiff? OP plaintiff.
6. If the answer to the last two mentioned issues are in affirmative, whether the plaintiff is entitled to any interest? If yes, at what rate and for which period? OP Plaintiff.
7. Relief."
5. In support of its case, plaintiff examined its two partners as PW1 & PW2, namely, Mr. Sanjay Kumar Goel & Mr. Sanjay Bansal, respectively. Both of them tendered their evidence by way of affidavit which reiterates the averments of the plaint. Plaintiff relies upon the following documents:- Partnership Deed Ext.PW1/1; Copy of registration certificate of plaintiff's partnership firm Ext.PW1/2; GST Judgment dated 13.03.2024; CNR No. DLWT01-004797-2023; CS(COMM) No.436/2023; M/s Shriram Enterprises Vs. M/s Guarantors Infrastructure Pvt. Ltd. Page 4 of 27 5 Registration Certificate of plaintiff Ext.PW1/3; Master data of defendant's company Ext.PW1/4; the 14 invoices Ext.PW1/5 (1) to Ext.PW1/5 (14); ledger account qua the defendant Ext.PW1/6; Certificate u/s 65B of Indian Evidence Act Ext.PW1/7; Interest calculation sheet Ext.PW1/7A and; Copies of notice and tracking report Ext.PW1/8 and Ext.PW1/8A, respectively.
6. On the other hand, defendant examined only one witness, namely, Kuldeep Rana as DW1, who also tendered the evidence by way of affidavit Ext.DW1/A reiterating the averments of WS. The defendant has relied upon 3 documents Ext.PW1/D1- Ext.PW1/D3 (exhibited in the cross-examination of PW1). DW1 also relied upon resolution in its favour Ext.DW1/2. In the affidavit, the defendant also mentioned the ledger account maintained by the defendant qua the plaintiff as Ext.DW1/1, but the same being an electronic evidence qua which no certificate under Section 65B of the Indian Evidence Act was filed, it was de-exhibited and was given Mark DX-1. Therefore, there is no document Ext.DW1/1 proved from the side of the defendant.
7. I have heard Ld. Counsels for the plaintiff and defendant and I have also perused the written submissions filed by the defendant.
8. Issue wise findings are as follows:
9. Issue no.1 "Whether this Court has no territorial jurisdiction to try the suit? OP defendant."
Judgment dated 13.03.2024; CNR No. DLWT01-004797-2023; CS(COMM) No.436/2023; M/s Shriram Enterprises Vs. M/s Guarantors Infrastructure Pvt. Ltd. Page 5 of 27 6 9.1. Onus to prove this issue was on the defendant. The defendant claimed that this Court has no territorial jurisdiction as the goods were supplied at Gurugram.
9.2. On the other hand, it is the case of the plaintiff that the defendant purchased and received the goods and then transported the goods from the office of the plaintiff located at Rajouri Garden Delhi i.e. within the jurisdiction of this Court. It is so mentioned in para 10 of the plaint. 9.3. The plaintiff has proved 14 invoices Ext.PW1/5 (1 to 14) through which the goods were sent to the defendant. The defendant did not deny those invoices. Although in the written statement, the defendant tried to put a defence that the invoices do not bear signature of the representative of the defendant, but perusal of the affidavit of admission/denial filed by the defendant company along with written statement reveals that the defendant mischievously tried to not specifically admit or deny these invoices. Qua these invoices what is mentioned in the affidavit of admission/ denial is that because of illegible copies, the correctness of these invoices cannot be 'assumed' by the defendant or 'commented' by the defendant at that stage. 9.4. The WS was filed by the defendant along with affidavit of admission/ denial on 23.09.2023. Prior to it, the defendant was served with the summons for settlement of issues along with copies of plaint and documents on 18.07.2023 and also on 23.08.2023, through speed post and process server, respectively. The next date of hearing in the matter was 05.09.2023. On 05.09.2023, one counsel for the defendant appeared and filed vakalatnama and sought time to file WS. On Judgment dated 13.03.2024; CNR No. DLWT01-004797-2023; CS(COMM) No.436/2023; M/s Shriram Enterprises Vs. M/s Guarantors Infrastructure Pvt. Ltd. Page 6 of 27 7 05.09.2023 the defendant never pointed out to the Court that any document received from the plaintiff was illegible or deficient. No application for supply of any deficient or illegible copies was filed either. Thereafter the WS and affidavit of admission/ denial of documents was filed between the two dates of hearing. Thereafter, on 09.10.2023, again the counsel for defendant was present in the Court and on that day not only replication was filed by the plaintiff, but also issues were framed. Even on that day the defendant did not claim that there was any deficiency in the documents received by the defendant. 9.5. If there was any document illegible or deficient, more particularly invoices, the defendant ought to have informed the Court either orally or by way of an application seeking supply of those documents. On one hand, the defendant did not do it and on the other hand when the WS and affidavit of admission/ denial of documents was filed between the two dates of hearing, it was mentioned by the defendant in the affidavit that the documents were not legible and therefore, invoices cannot be commented upon. Perusal of the WS of the defendant company, holistically, does not indicate that the defendant was ever serious in denying these invoices.
9.6. Also in the cross-examination of PW1 or PW2, these invoices have not been seriously disputed by the defendant. Rather the main defence of the defendant is that the goods received by the defendant were of poor quality and the plaintiff was informed about the quality. Out of the 14 invoices, 4 invoices Ext.PW1/5 (1, 4, 12 & 13) were specifically put by the plaintiff to DW1 in his cross-examination, to Judgment dated 13.03.2024; CNR No. DLWT01-004797-2023; CS(COMM) No.436/2023; M/s Shriram Enterprises Vs. M/s Guarantors Infrastructure Pvt. Ltd. Page 7 of 27 8 which DW1 replied that he cannot admit or deny whether the defendant company purchased goods under those invoices from the plaintiff.
9.7. Thus the invoices Ext.PW1/5 (1-14) are deemed to be admitted by the defendant. All these invoices contain a Clause that all disputes between the parties would be subject to Delhi jurisdiction only. 9.8. Ext.PW1/5 (1-6) reveals that these invoices are generated from the office of the plaintiff at Rajouri Garden. Goods were supplied at Faridabad office of the defendant. However, the invoices Ext.PW1/5 (7-14) reveals that these invoices were generated from the office of the plaintiff at Gurugram and the goods were supplied at Faridabad in Haryana. But interestingly, on all the 14 invoices, there is a clause mentioned that the dispute between the parties would be subject to Delhi jurisdiction only. So far as Ext.PW1/5 (1-6) are concerned, there is no difficulty in holding that the jurisdiction is of this Court as the invoices were generated from within the jurisdiction of this Court. 9.9. Regarding invoices Ext.PW1/5 (7-14), the invoices suggest that these invoices were generated from Gurugram office of the plaintiff. Under all the 14 invoices, the place of delivery of articles is Faridabad in Haryana. The plaintiff in its plaint specifically averred that the defendant placed purchase orders upon the plaintiff at the office of the plaintiff at Rajouri Garden and also the defendant collected the goods from the office of the plaintiff at Rajouri Garden Delhi and then those goods were transported by the defendants at its own cost.
Judgment dated 13.03.2024; CNR No. DLWT01-004797-2023; CS(COMM) No.436/2023; M/s Shriram Enterprises Vs. M/s Guarantors Infrastructure Pvt. Ltd. Page 8 of 27 9 9.10. When the plaintiff specifically averred that the goods were purchased by the defendant from the office of plaintiff at Delhi and orders used to be placed upon the plaintiff through mobile phone, personal visit or electronic modes and part of cause of action arose within the jurisdiction of Delhi, the above mentioned agreement regarding conferring exclusive jurisdiction upon Delhi Courts is a legal agreement between the parties. Law is well settled that where part of cause of action arises within jurisdiction of multiple Courts, the parties are free to agree to confer jurisdiction to one particular Court out of any of the Courts within the jurisdiction of which part of cause of action arises. Law is equally well settled that parties cannot confer jurisdiction to a Court within the jurisdiction of which no part of cause of action arises. But in the present case when part of cause of action arose within the jurisdiction of Delhi, the above mentioned agreement regarding conferring exclusive jurisdiction upon Delhi Courts is valid. 9.11. In its evidence, PW1 specifically mentioned in para 3 of the affidavit that it was the defendant who used to take goods from the office of the plaintiff to the destination of the goods at its own cost. It is so mentioned in the affidavit of PW1 as well as PW2. Neither in the cross-examination of PW1 nor in the cross-examination of PW2, the defendant ever challenged the fact that goods used to be collected and carried by the defendant from the office of the plaintiff at Rajouri Garden Delhi to the destination at its own cost. Nor the defendant led any evidence from its side to prove that no part of cause of action arose within the jurisdiction of this Court.
Judgment dated 13.03.2024; CNR No. DLWT01-004797-2023; CS(COMM) No.436/2023; M/s Shriram Enterprises Vs. M/s Guarantors Infrastructure Pvt. Ltd. Page 9 of 27 10 9.12. When goods were purchased by the defendant from the office of the plaintiff at Delhi and the goods were collected from there, indeed part of cause of action arose within the jurisdiction of this Court. In such circumstances, the existence of Clause to the effect "All disputes subject to 'Delhi' jurisdiction only", which is an agreement between the two sides conferring exclusive jurisdiction upon this Court, is perfectly valid. It is not a case where jurisdiction was exclusively conferred upon this Court without any part of cause of action arising within the jurisdiction of this Court.
9.13. Therefore, not only qua Ext.PW1/5 (1-6), but also qua Ext.PW1/5 (7-
14), the existence of the exclusivity clause mentioned above as to territorial jurisdiction is sufficient for this Court to decide Issue no.1. in favour of the plaintiff and against the defendant. 9.14. Issue no.1 is, accordingly, decided against the defendant and in favour of the plaintiff.
10. Issue no.3 "Whether the suit is not maintainable for non-joinder of necessary parties as pleaded by the defendant? OP defendant."
10.1. The defendant claims that the suit is bad for non-joinder of Directors of the defendant company.
10.2. Law is well settled that a company is a juristic entity and company can sue or be sued in its name. Directors of the company do not owe any personal liability for the dues of the company towards third parties in business dealings of the company with third parties, except under the Judgment dated 13.03.2024; CNR No. DLWT01-004797-2023; CS(COMM) No.436/2023; M/s Shriram Enterprises Vs. M/s Guarantors Infrastructure Pvt. Ltd. Page 10 of 27 11 circumstances wherein the directors undertake indemnity or personal guarantee or there is malfeasance. In this regard one may rely upon the cases of Tristar Consultants v. Vcustomer Services India Pvt. Ltd., 2007 SCC OnLine Del 359; Gurmeet Satwant Singh and Others Versus Meera Gupta and Another 2019 SCC OnLine Del 9505 and; Anirban Roy v. Ram Kishan Gupta, 2017 SCC OnLine Del 12867.
10.3. In the present case, neither it is the case of the parties that the directors of the defendant company ever undertook any such guarantee or indemnity, nor is it even the case of the defendant that the directors ought to be held personally liable.
10.4. Therefore, the claim of the defendant company that the suit is bad for non-joinder of the directors, is untenable.
10.5. Issue no.3 is decided against the defendant and in favour of the plaintiff.
11. Issue no.2 Whether the goods supplied by the plaintiff to the defendant were of inferior quality and not as per the quality ordered for, and / or whether the plaintiff avoided to replace those sub-standard goods despite being informed by the defendant? OP defendant.
11.1. Onus to prove this issue was also on the defendant. A holistic reading of the written statement of the defendant indicates that the defendant took a feeble attempt to raise a defence that the quality of goods Judgment dated 13.03.2024; CNR No. DLWT01-004797-2023; CS(COMM) No.436/2023; M/s Shriram Enterprises Vs. M/s Guarantors Infrastructure Pvt. Ltd. Page 11 of 27 12 supplied by the plaintiff, qua part of the goods, was bad and despite being informed the plaintiff did not replace those goods. 11.2. There is not even a single document from the side of the defendant to the plaintiff, between the date of supply of material and till filing of the suit, under which the defendant ever informed the plaintiff about any quality issues regarding the goods supplied. The goods were supplied between 20.09.2019 till 31.01.2020.
11.3. Admittedly, the defendant also received a legal notice Ext.PW1/D3 from the plaintiff sometime in July 2022. It is apparent from the postal stamp affixed on the envelope which is annexed to the notice Ext.PW1/D3. This document Ext.PW1/D3 has been relied by none other than the defendant in this case during cross-examination of PW1. Therefore, this notice was received by the defendant in July 2022. It is not even the case of the defendant that the defendant ever gave reply to this notice.
11.4. Thus, neither before receipt of this notice, nor after receipt of this notice, any communication was sent by the defendant in writing to the plaintiff raising any issue about quality of goods. As per the case of the plaintiff, the defendant used to pick the goods from the office of the plaintiff and, therefore, it was the responsibility of the defendant to have inspected the goods at that time. If it is the case of the defendant that the defendant did not accept the goods at the office of the plaintiff or that the defendant did not get any opportunity to inspect the goods at the time of supply, the defendant ought to have inspected the goods within a reasonable time of its supply. Between September Judgment dated 13.03.2024; CNR No. DLWT01-004797-2023; CS(COMM) No.436/2023; M/s Shriram Enterprises Vs. M/s Guarantors Infrastructure Pvt. Ltd. Page 12 of 27 13 2019 to April 2022 and even thereafter, within a reasonable time, no such information about quality of goods was sent by the defendant to the plaintiff.
11.5. As per Section 41 of the Sale of Goods Act 1930, the defendant had a right to inspect the goods on delivery and report defects within a reasonable time of delivery. If not rejected within reasonable time, mandate of Section 42 of the Sale of Goods Act 1930 stipulates that the defendant would be deemed to have accepted the goods. In the present case, in absence of any proof that the defendant ever rejected the goods, the defendant fails to prove the fact that any of the goods supplied by the plaintiff was defective or was rejected by the defendant.
11.6. For ready reference, section 41 & 42 of the said Act reads as follows;
"41. Buyer's right of examining the goods.--(1) Where goods are delivered to the buyer which he has not previously examined, he is not deemed to have accepted them unless and until he has had a reasonable opportunity of examining them for the purpose of ascertaining whether they are in conformity with the contract. (2) Unless otherwise agreed, when the seller tenders delivery of goods to the buyer, he is bound, on request, to afford the buyer a reasonable opportunity of examining the goods for the purpose of ascertaining whether they are in conformity with the contract.
42. Acceptance.--The buyer is deemed to have accepted the goods when he intimates to the seller that he has accepted them, or when the goods have been delivered to him and he does any act in relation to them which is inconsistent with the ownership of the seller, or when, after the lapse of a reasonable time, he retains the goods without intimating to the seller that he has rejected them."
11.7. Since the defendant never intimated the plaintiff about rejection of goods and never returned the goods, the act of defendant of retaining Judgment dated 13.03.2024; CNR No. DLWT01-004797-2023; CS(COMM) No.436/2023; M/s Shriram Enterprises Vs. M/s Guarantors Infrastructure Pvt. Ltd. Page 13 of 27 14 the goods without intimating the plaintiff about rejection, tantamount to acceptance of goods by the defendant.
11.8. Accordingly, issue no.2 has to be decided against the defendant and in favour of the plaintiff. It is so decided.
12. Issue no.4 Whether the plaintiff is entitled to recovery of Rs.7,21,241/- (Rs. Seven Lakhs Twenty-One Thousand Two Hundred Forty-One Only) towards price of the goods supplied and outstanding from the defendant? OP plaintiff.
12.1. Onus to prove this issue was on the plaintiff.
13. An argument was raised on behalf of the defendant that the suit is not within limitation. Though in the written statement no such specific plea was taken yet it being a legal issue as to limitation, a defendant can always raise that issue even in absence of pleading in the written statement. Let it be examined first whether the suit is within limitation or not.
13.1. As mentioned above, the goods were supplied between 20.09.2019 to 31.01.2020. The suit has been filed on 03.06.2023. Plaintiff has proved ledger account Ext.PW1/6 which reveals that between November 2019 till April 2022 certain payments have been made by the defendant to the plaintiff. On 25.07.2020 a sum of ₹50,000/- and on 03.02.2022 a sum of ₹25,000/- was paid. DW1 also admitted that payment of ₹25,000/- and ₹50,000/-, respectively, were made to the plaintiff on 03.02.2022 and 25.07.2020, respectively. There are earlier payments also made in the year 2019. The effect of these payments Judgment dated 13.03.2024; CNR No. DLWT01-004797-2023; CS(COMM) No.436/2023; M/s Shriram Enterprises Vs. M/s Guarantors Infrastructure Pvt. Ltd. Page 14 of 27 15 extends the period of limitation in favour of the plaintiff. The payment dated 03.02.2022 of ₹25,000/- is within a period of 3 years from the date of supply of goods. It extended the period of limitation to further 3 years and within that period the present suit has been filed. Under section 19 of the Limitation Act 1963, where payment on account of a debt is made before the expiration of the prescribed period by the person liable to pay the debt or by his agent duly authorized in this behalf, a fresh period of limitation shall be computed from the time when the payment was made.
13.2. Besides it, as per the plaintiff the defendant even issued 3 cheques Ext.DW1/P1 to P3. These cheques are dated 21.01.2020, 25.01.2020 and 22.02.2020. The effect of these cheques would be extending the period of limitation for a further period of 3 years. Under section 18 of the Limitation Act 1963, where, before the expiration of the prescribed period for a suit or application in respect of any property or right, an acknowledgment of liability in respect of such property or right has been made in writing signed by the party against whom such property or right is claimed, or by any person through whom he derives his title or liability, a fresh period of limitation shall be computed from the time when the acknowledgment was so signed. It is now well settled that a signed cheque is a written acknowledgement. 13.3. DW1 admitted all these 3 cheques were issued by the defendant, as admitted in his cross-examination. It is another matter that the defendant claimed that these 3 cheques were given as security cheques. The said fact shall also be adverted to herein under as to Judgment dated 13.03.2024; CNR No. DLWT01-004797-2023; CS(COMM) No.436/2023; M/s Shriram Enterprises Vs. M/s Guarantors Infrastructure Pvt. Ltd. Page 15 of 27 16 whether the defendant succeeds in proving that the cheques were security cheques or given in discharge of liability, and for the reasons to follow it is held that the cheques were given in discharge of liability and not as security cheques. The issuance of those cheques extends the period of limitation in favour of the plaintiff.
13.4. Even otherwise, the period between 15.03.2020 to 28.02.2022 stood excluded from the period of limitation because of Covid 19 pandemic situation pursuant to directions of Hon'ble Supreme Court in the case of Cognizance for Extension of Limitation, in re, (2022) 3 SCC 117, 13.5. Therefore, this Court has no hesitation in holding that the suit of the plaintiff is within limitation.
14. It is also argued on behalf of the defendant that the defendant has proved one purchase order Ext.PW1/D1 in which the signature of PW2 is admitted by both the witnesses of the plaintiff and that in the said agreement there is an arbitration clause. Based on that arbitration clause, it is argued that this suit could not have been filed and actually the plaintiff ought to have resorted to arbitration proceedings. This argument is fallacious on two counts. 14.1. First is, that in terms of Section 8 of the Arbitration and Conciliation Act, 1996, the defendant was within his right to file an application thereunder in this Court before giving first statement on the substance of the dispute. Under Section 8, a party can file an application before submitting his first statement on the substance of the dispute and not later than the date for submitting such a statement. The defendant never resorted to any such remedy.
Judgment dated 13.03.2024; CNR No. DLWT01-004797-2023; CS(COMM) No.436/2023; M/s Shriram Enterprises Vs. M/s Guarantors Infrastructure Pvt. Ltd. Page 16 of 27 17 14.2. Reliance placed by the defendant upon the case of Madhu Sudan Sharma and Ors. Vs. Omaxe Ltd. 2023 SCC OnLine Del 7136, does not help the case of the defendant as the defendant did not resort to remedy available under Section 8 of the Arbitration Act. 14.3. Secondly, the agreement under Clause 15 of the Ext.PW1/D1 does not fall within the ambit of Section 7 of the Arbitration and Conciliation Act. What is provided in the said Clause is that 'in case any dispute arises between the parties, unless it is amicably settled, the same may be referred to Arbitration'. The said agreement is not an arbitration agreement within the definition of Section 7 of the said Act and therefore, even otherwise, the defendant could not have resorted Section 8 of the said Act. In this regard one may rely upon the case of Jagdish Chander v. Ramesh Chander, (2007) 5 SCC 719 and; K. K. Modi v. K.N. Modi, (1998) 3 SCC 573;
15. Turning to the question whether plaintiff is entitled to seek recovery of the above-mentioned amount of ₹7,21,241/- or not, as mentioned above, the invoices Ext.PW1/5 (1 to 14) are not disputed by the defendant. The total of these 14 invoices comes to Rs.13,96,277/-. In the written statement evasive reply was given qua those invoices. In the affidavit of admission/ denial filed by the defendant, the defendant deliberately evaded to specifically deny or admit these invoices. As mentioned above, in his affidavit of admission/denial, the defendant took a false ground of not having received legible copies. No such issue of illegible copies was ever raised by the defendant either orally Judgment dated 13.03.2024; CNR No. DLWT01-004797-2023; CS(COMM) No.436/2023; M/s Shriram Enterprises Vs. M/s Guarantors Infrastructure Pvt. Ltd. Page 17 of 27 18 or in writing before this Court right from the day when the defendant started appearing in this case till the stage of judgment. No application qua it was filed in the Court. No written intimation was sent by the defendant to the plaintiff qua it.
15.1. Out of the 14 invoices, 4 invoices Ext.PW1/5 (1,4,12 and 13) were specifically put by the plaintiff to DW1 in his cross-examination, to which DW1 replied that he cannot admit or deny whether the defendant company purchased goods under those invoices from the plaintiff. It was these 4 invoices regarding which the plaintiff even questioned the witness as to issuance of the three cheques Ext.DW1/P1-P3. The Cheques Ext.DW1/P1 & P2 are of the same amount as mentioned in invoices Ext.PW1/5 (12 & 13), respectively. The amount mentioned in cheque Ext.DW1/P3 equals to the invoice amount of the two invoices Ext.PW1/5 (1 & 4).
15.2. The defence, that these cheques were given to the plaintiff towards security, is only taken up by the defendant for the first time in his cross-examination when he was confronted with these 3 cheques. The defendant also never took such a plea in pleadings. It may also be mentioned here that the plaintiff claims that these cheques could never be presented for encashment because of Covid pandemic situation, but even the plaintiff never relied upon these cheques along with the plaint and these 3 cheques were put to DW1 for the first time in his cross- examination. Under Order 11 Rule 1(1)(c) of CPC, the plaintiff was within his right to put these cheques to the defendant's witnesses and non-filing of these cheques along with the plaint cannot go against the Judgment dated 13.03.2024; CNR No. DLWT01-004797-2023; CS(COMM) No.436/2023; M/s Shriram Enterprises Vs. M/s Guarantors Infrastructure Pvt. Ltd. Page 18 of 27 19 plaintiff. Precisely for that reason these cheques were allowed to be put to DW1 in his cross-examination.
15.3. The defence that these cheques were given in security to the plaintiff is apparently false for the reasons that these 3 cheques are not of continuing cheque numbers. The cheque number of these 3 cheques are "003935", "005021" & "004067", respectively Ext.DW1/P1 to P3. The cheque Ext.PW1/P1 & P3 are of one account, whereas Ext.DW1/P2 is from another account of the defendant. 15.4. Had these cheques been given in security, the defendant would have given either one consolidated cheque for a particular consolidated amount or a blank cheque. There was no reason for the defendant to have issued 3 different cheques from different cheque series and that too from two different banks. In case the defendant was required to give security, the said purpose would have been served by giving one cheque only.
15.5. No such plea of giving security was taken by the defendant ever either in the written statement or in reply to the legal notice received from the plaintiff Ext.PW1/D3. Thus the defence of the defendant that the cheques were given in security is apparently false. It leaves no doubt with the Court to hold that these 3 cheques were issued by the defendant against liability under invoices Ext.PW1/5 (1, 4, 12 & 13). 15.6. There was no occasion for the defendant to have issued cheques against those invoices for equal amount of the amount due under those invoices, if there was any issue from the side of the defendant as to non-receipt of goods or as to quality of goods. As mentioned above, Judgment dated 13.03.2024; CNR No. DLWT01-004797-2023; CS(COMM) No.436/2023; M/s Shriram Enterprises Vs. M/s Guarantors Infrastructure Pvt. Ltd. Page 19 of 27 20 the defendant gave evasive reply in its written statement about invoices and also about receipt of goods.
15.7. When the defendant has failed to establish its defence that it did not receive the goods or that the goods supplied were not up to the standard, the only inference which can be drawn is that the defendant did receive material against the above-mentioned invoices as per the quality agreed.
15.8. In Ext.PW1/6, i.e. the ledger account proved by the plaintiff, the plaintiff has reflected the payments received from the defendant. The defendant never disputed those entries regarding making payments to the plaintiff. As per ledger account Ext.PW1/6, a sum of ₹7,21,241/- is due from the defendant to the plaintiff. As mentioned above, the total of 14 invoices in question comes to ₹13,96,277/-. The plaintiff proved the ledger account running into two pages collectively Ext.PW1/6. They are at page no.35 & 36 of the paper book. It reveals that the ledger at page no.35 pertains to the supplies made by the plaintiff from its Gurugram office, whereas, the ledger at page no.36 pertains to the supplies made by the plaintiff from its Delhi address. 15.9. The ledger at page no.36 reveals that so far as the invoices proved in the present case are concerned they are mentioned from 21.01.2020 till 31.01.2020. Otherwise this ledger at page no.36 is for the period 01.10.2019 till 31.01.2020. Between 21.01.2020 till 31.01.2020, under the 6 invoices Ext.PW1/5 (1-6) goods worth ₹2,67,825/- were supplied by the plaintiff to the defendant. During this period a sum of ₹35,872/- was received from the defendant on 21.01.2020. Prior to 21.01.2020 Judgment dated 13.03.2024; CNR No. DLWT01-004797-2023; CS(COMM) No.436/2023; M/s Shriram Enterprises Vs. M/s Guarantors Infrastructure Pvt. Ltd. Page 20 of 27 21 certain other invoices are also mentioned in the ledger and also certain other payments were received and are mentioned, but since the plaintiff has not proved the invoices prior to 21.01.2020 and has proved the invoices only between 21.01.2020 till 31.01.2020, therefore this Court is not concerned with the earlier invoices and the earlier payments received. This ledger also reveals that on 31.01.2020 & 01.04.2022 a sum of ₹86,152/- & ₹2,79,295/- were transferred by the plaintiff from this ledger to the ledger at page no.35 pertaining to the supplies made from Gurugram. Out of the 6 invoices under which goods were supplied to the defendant as mentioned in the ledger at page no.36 for a total amount of ₹2,67,825/-, a sum of ₹35,872/- was received by the plaintiff from the defendant leaving a balance of ₹2,31,953/-.
15.10. On the other hand, the ledger at page no.35 pertaining to the goods supplied from Gurugram office reveals that between 20.09.2019 till 14.01.2020, under 8 invoices Ext.PW1/5 (7-14), goods worth ₹11,28,452/- were supplied by the plaintiff to the defendant. In this ledger at page no.35 the plaintiff has debited the two amounts of ₹86,152/- and ₹2,79,295/-, which were transferred from the ledger at page no.36 on the above-mentioned dates. As per this ledger at page no.35, between 20.09.2019 till 03.02.2022 a total of sum of ₹7,72,658/- was received from the defendant, leaving a balance of ₹3,55,794/-.
15.11. Thus, under the 14 invoices in question a sum of ₹5,87,747/-
remains balance to be paid by the defendant to the plaintiff Judgment dated 13.03.2024; CNR No. DLWT01-004797-2023; CS(COMM) No.436/2023; M/s Shriram Enterprises Vs. M/s Guarantors Infrastructure Pvt. Ltd. Page 21 of 27 22 (₹2,31,953/- as per ledger at page no.36 and ₹3,55,794/- as per ledger at page no.35).
15.12. As against it, despite there being business relations between the defendant and the plaintiff, the defendant did not prove its own ledger. The defendant did file on record one ledger claiming that it is pertaining to the plaintiff, but he never proved that document. It being an electronic evidence having been processed and generated through the computer, Certificate under Section 65B of the Evidence Act was necessary to be filed, but the defendant did not do it. Therefore, that document was never exhibited in the evidence.
15.13. It is argued on behalf of the defendant that the defendant received a notice Ext.PW1/D3 which is undated and which was received in July 2022, whereas the plaintiff has filed on record another notice which is also undated and which is Ext.PW1/8. It is argued that in both those notices sent by the plaintiff to the defendant, the amount claimed by the plaintiff substantially differs. In the notice Ext.PW1/D3, the amount claimed by the plaintiff is ₹4,41,946/- as principal amount plus interest of ₹21,214/- totaling ₹4,63,160/-. Whereas in the notice Ext.PW1/8 relied in the present suit, the amount mentioned by the plaintiff is ₹7,21,241/-. Ext.PW1/8 is also not a happily drafted document. Para 6 of the said notice leaves one in complete confusion as to what is the principal amount and what is the total amount sought by the plaintiff from the defendant. Nevertheless, the said fact does not make any impact on the decision of this Court.
Judgment dated 13.03.2024; CNR No. DLWT01-004797-2023; CS(COMM) No.436/2023; M/s Shriram Enterprises Vs. M/s Guarantors Infrastructure Pvt. Ltd. Page 22 of 27 23 15.14. It would however be important to clarify here that along with Ext.PW1/8 (notice relied by the plaintiff), the plaintiff also filed on record one tracking report Ext.PW1/8A in order to establish its case that this notice was delivered upon the defendant. But the postal receipt no. ED139580961IN, which is mentioned on Ext.PW1/8A, is in fact tallying with the envelope in which another notice Ext.PW1/D3 was received by the defendant. Therefore, this tracking report Ext.PW1/8A actually pertains to Ext.PW1/D3 and not Ext.PW1/8. There is no postal receipt filed by the plaintiff to show that Ext.PW1/8 demanding ₹7,21,241/- was ever sent to the defendant. 15.15. But then in a suit for recovery it is not mandatory for a plaintiff to have sent legal notice to the defendant before instituting the suit. It would also not make any difference even when the plaintiff sent notice Ext.PW1/D3 with a lesser demanded amount than the suit amount. What is to be seen by this Court is as to whether in the suit, the plaintiff succeeds in proving that the suit amount is actually due from the defendant.
15.16. For the same reason, the argument raised by the defendant that even in the pre-litigation mediation application, ExPW1/D2, the amount claimed from the defendant was totaling only ₹4,63,160/- i.e. principal of ₹4,41,946/- with interest of ₹21,214/-, does not make any difference. Admittedly, the pre-litigation mediation between the parties remained unsuccessful and a non-starter. Therefore, it does not lie in the mouth of the defendant to claim that had the plaintiff mentioned the suit amount of ₹7,21,241/-, the defendant may have Judgment dated 13.03.2024; CNR No. DLWT01-004797-2023; CS(COMM) No.436/2023; M/s Shriram Enterprises Vs. M/s Guarantors Infrastructure Pvt. Ltd. Page 23 of 27 24 settled the matter. When the defendant could not or did not settle the pre-litigation mediation for a lesser amount of ₹4,63,160/-, there is no question that the defendant would have settled higher amount of dues. 15.17. Therefore, it does not make any impact on the decision of this Court that in the earlier notice sent by the plaintiff and in the pre-litigation mediation, only a sum of ₹4,41,946/- as principal amount was demanded by the plaintiff.
15.18. The plaintiff has also proved its registration Ext.PW1/2 as it is a registered partnership firm.
15.19. Perusal of cross-examination of DW1 reveals that DW1 stated that the defendant used to purchase goods from the plaintiff. Although the defendant tried to qualify that statement claiming that goods were purchased only for Delhi office of the defendant and not for Gurugram office of the defendant, but in subsequent breath DW1 also claimed that if there was any material purchased for Delhi office, regarding it ledger was maintained at Delhi office and if in case goods were purchased for Gurugram office, ledger was maintained at Haryana office. The defendant also admitted that defendant used to make payment to the plaintiff from its bank sometimes from Gurugram, sometimes from Delhi. These facts coupled with the fact that the defendant never seriously disputed the invoices, enables the Court to hold that the defendant received goods under the above-mentioned invoices.
15.20. In the present case, the plaintiff succeeds in proving that against the above-mentioned invoices, after adjusting the payments made Judgment dated 13.03.2024; CNR No. DLWT01-004797-2023; CS(COMM) No.436/2023; M/s Shriram Enterprises Vs. M/s Guarantors Infrastructure Pvt. Ltd. Page 24 of 27 25 by the defendant, a sum of ₹5,87,747/- is due as mentioned in paragraph no.15.11 of this judgment.
15.21. The argument of the defendant that pre-litigation mediation was not done by the plaintiff, which proceeds on the ground that there is a difference of amount claimed before the pre-litigation mediation centre and in the suit, has to be rejected for the simple reason that when the defendant did not settle the matter for a lesser amount, the fate of pre-litigation mediation would have been same even if the suit amount was mentioned therein. Mere difference of amount in the pre-litigation mediation application and in the suit, does not, in any manner, makes it a case of non-compliance of Section 12A of the Commercial Courts Act 2015.
15.22. The sum and substance of the above-discussion is that the plaintiff succeeds in proving that the plaintiff is entitled to recovery of sum of ₹5,87,747/- from the defendant against the price of goods supplied. 15.23. Issue no.4 is, accordingly, decided in favour of the plaintiff and against the defendant, but to the effect that the plaintiff is entitled to recover only ₹5,87,747/- from the defendant against the price of goods supplied and not ₹7,21,241/-.
16. Issue no.5 & 6
5. Whether the plaintiff is entitled to interest to the tune of Rs.2,55,056/- which is calculated at the rate of 24 % per annum on the above mentioned amount as claimed by the plaintiff?OP plaintiff.
Judgment dated 13.03.2024; CNR No. DLWT01-004797-2023; CS(COMM) No.436/2023; M/s Shriram Enterprises Vs. M/s Guarantors Infrastructure Pvt. Ltd. Page 25 of 27 26
6. If the answer to the last two mentioned issues are in affirmative, whether the plaintiff is entitled to any interest? If yes, at what rate and for which period? OP Plaintiff.
16.1. The plaintiff has demanded interest @24% per annum based on the fact that on the invoices, a term exist that the said interest would be charged in case of default. However, the said interest demanded is exorbitant.
16.2. In the case of Cimmco Limited Versus Pramod Krishna Agrawal 2019 SCC OnLine Del 7289, it is held as follows;
"3. .........Hon'ble Supreme Court has now mandated that lower rates of interest be granted and therefore the pre-suit and also the pendente lite and future interest is liable to be reduced by this Court. Reliance is placed upon the judgments in the cases of Rajendra Construction Co. v. Maharashtra Housing & Area Development Authority, (2005) 6 SCC 678, McDermott International Inc. v. Burn Standard Co. Ltd., (2006) 11 SCC 181, Rajasthan State Road Transport Corporation v. Indag Rubber Ltd., (2006) 7 SCC 700, Krishna Bhagya Jala Nigam Ltd. v. G. Harischandra, (2007) 2 SCC 720 & State of Rajasthan v. Ferro Concrete Construction Pvt. Ltd. (2009) 3 Arb. LR 140 (SC)."
16.3. In the considered opinion of this Court, in the given facts and circumstances and keeping in view the prevalent rate of interest, it would meet the needs of justice that the plaintiff is granted interest @9% per annum from the date of last invoice i.e. 31.01.2020 till the date of realization.
16.4. Issue no. 5 & 6 are, accordingly, decided in favour of the plaintiff and against the defendant.
Judgment dated 13.03.2024; CNR No. DLWT01-004797-2023; CS(COMM) No.436/2023; M/s Shriram Enterprises Vs. M/s Guarantors Infrastructure Pvt. Ltd. Page 26 of 27 27
17. Relief 17.1. Accordingly, the suit of the plaintiff is decreed for a sum of ₹5,87,747/- (₹Five Lakh Eighty-Seven Thousand Seven Hundred and Forty-Seven) with Simple interest @ 9% per annum from the date of last invoice i.e. 31.01.2020 till the date of realization. Plaintiff shall also be entitled to the cost of the suit. 17.2. Decree sheet be prepared accordingly. A copy of the judgment be supplied to the plaintiff as well as the defendant through electronic modes in compliance of Order 20 Rule 1(1) of CPC. File be consigned to the record room.
Announced in the open Court on 13th March, 2024 Digitally signed DIG by DIG VINAY SINGH VINAY Date:
SINGH 2024.03.13 14:10:42 +0530 (DIG VINAY SINGH) District Judge (Commercial Court)-03 West / Tis Hazari / Delhi (m) Judgment dated 13.03.2024; CNR No. DLWT01-004797-2023; CS(COMM) No.436/2023; M/s Shriram Enterprises Vs. M/s Guarantors Infrastructure Pvt. Ltd. Page 27 of 27