Delhi District Court
M/S M P Electronics vs M/S Sarthak Electronics P Ltd on 29 March, 2025
IN THE COURT OF SH. AMIT BANSAL
DISTRICT JUDGE (COMMERCIAL COURT)-03
SOUTH-WEST DISTRICT, DWARKA COURTS, NEW DELHI.
CS (Comm) No. 05/2019
CNR No. DLSW01-001945-2019
M/s M. P. Electronics
Through its Prop. Sh. Parminder Pal Singh
S/o Sh. Charanjeet Singh
Having His Office at:
RZ-4A, Block S, Vishwas Park
Uttam Nagar, Delhi
Presently at:
RZ-5, First Floor, Block S
Vishwas Park, Uttam Nagar
Delhi-110059
...Plaintiff
VS.
M/s Sarthak Electronics Pvt. Ltd.
Through Its Authorized Representative
Sh. Rajiv Goyal
Having Its Office at:
17-A, Block A, Raja Puri
New Delhi-110059
Also At:
C-234, Block C-3, Janakpuri
New Delhi-110058
...Defendant
Date of institution : 08.02.2019
Date of final arguments : 27.03.2025
Date of decision : 29.03.2025
CS(COMM) 5/2019 M/s M. P. Electronics vs. M/s Sarthak Electronics Pvt. Ltd. Page No.1 of 28
JUDGMENT
1. The present suit was filed by the plaintiff against the defendant under Order XXXVII CPC with a prayer to pass a money decree of Rs. 91,45,219/- in favour of the plaintiff and against the defendant along with interest @ 18% p.a. from the date of filing of the suit till realization of the payment and costs of the suit.
2. The brief facts as mentioned in the plaint are that the plaintiff is doing business of electronics at the given address whereas the defendant is a Private Limited Company incorporated under the provisions of The Companies Act. The defendant is also having the same business of electronics and hence, the directors of the defendants were on visiting terms with plaintiff since 10-11 years and business terms since 11-12 years. The defendant used to purchase various electronics articles from plaintiff time to time as per requirement. The plaintiff was maintaining an account and prepared the bills of articles. It has been averred that the defendant made several payments through cheques to plaintiff against admitted liability, several payments were due towards the defendant and accordingly the business was running and going on. The defendant had run the business with the plaintiff till 04.05.2017 and by that time a liability of Rs. 91,45,219/- was due towards the defendant and thereafter the defendant had stopped the business with the plaintiff. Thereafter, the plaintiff approached the defendant several times and demanded his amount, however, the defendant avoided the plaintiff on different pretexts and in that regard several meetings were held between the plaintiff and the defendant. The plaintiff CS(COMM) 5/2019 M/s M. P. Electronics vs. M/s Sarthak Electronics Pvt. Ltd. Page No.2 of 28 approached respectable persons of the society and market and plaintiff along with those persons also approached the defendant to refund the money of the plaintiff. In the month of October, 2018, the defendant issued six cheques in favour of the plaintiff against the admitted liability, all the cheques were drawn on Canara Bank, Uttam Nagar Branch, New Delhi. The cheques no. 907579, 907580, 907581 and 907582 were amounting to Rs. 20 lakh each, cheque bearing no. 911973 was amounting to Rs. 10 lakh and cheque bearing no. 911974 was amounting to Rs. 1,45,219/-. All the cheques were dated 20.10.2018. All the said cheques were issued against admitted liability. After confirmation from the defendant, the plaintiff presented the said cheques for encashment into his account in City Union Bank Ltd., Branch Laxmi Nagar, Delhi, however, the cheques bearing no. 911974, 911973, 907579 and 907580 were returned unpaid with a reason of 'account closed' and the cheques bearing no. 907581 and 907582 were returned unpaid with the reason 'kindly contact drawer/drawee bank' vide returning memo dated 23.10.2018. The plaintiff enquired several times from the defendant about it and demanded payment but defendant did not make the payment to the plaintiff and tried to evade him on different pretexts. The defendant had issued the said cheques to the plaintiff however, the defendant neither updated its account nor maintained account for clearance of the said cheques, hence, the defendant has caused wrongful loss to the plaintiff and wrongful gain to itself by which it cheated the plaintiff. The defendant cheated the plaintiff in a planned manner with mala fide intention and after dishonour of the said cheques upon presentation, the defendant is under liability to refund the said amount to the plaintiff. The plaintiff issued legal notice dated 29.10.2018 to the defendant for legal action/civil CS(COMM) 5/2019 M/s M. P. Electronics vs. M/s Sarthak Electronics Pvt. Ltd. Page No.3 of 28 recovery. It was served on the defendant at available addresses but the defendant did not refund the amount to the plaintiff. The plaintiff has also preferred a criminal case against the defendant under Section 138 of Negotiable Instruments Act, 1881 before Karkardooma Courts, Delhi. The plaintiff thus prayed for a money decree of Rs. 91,45,219/- in its favour and against the defendant along with interest at the rate of 18% p.a. from the date of filing of the suit till realization of the payment and costs of the suit.
3. Summons for appearance under Order XXXVII CPC were issued and the defendant put its appearance in the matter. The order sheet dated 23.11.2019 would show that an application seeking issuance of summons for judgment was filed on behalf of the plaintiff and Ld. counsel for the defendant had accepted its service in the court on that day itself upon which the Ld.Predecessor of this court held to the effect that summons for judgment would be deemed to have been served and period of limitation for filing application seeking leave to defend would start from that date. The record would show that thereafter, defendant filed an application under Order XXXVII Rule 3(5) read with Section 151 CPC seeking leave to defend and contest the suit which was disposed of vide order dated 16.10.2023 by the Ld. Predecessor of this court by inter alia holding that it appeared that defendant had raised substantial defence and that it was entitled to unconditional leave to defend. The above said application moved by the defendant was allowed and the defendant was granted unconditional leave to defend.
4. The record would show that earlier the suit was filed against the defendants i.e. M/s Sarthak Electronics P. Ltd. and its CS(COMM) 5/2019 M/s M. P. Electronics vs. M/s Sarthak Electronics Pvt. Ltd. Page No.4 of 28 directors Sh. Rajiv Goyal and Smt. Rajni Goyal as defendant no. 1, defendant no. 2 and defendant no. 3 respectively. The record would show that defendant nos. 2 and 3 i.e. Sh. Rajiv Goyal and Smt. Rajni Goyal filed an application under Order 1 Rule 10 read with Section 151 CPC for deletion of their names from array of parties which was allowed by Ld. Predecessor of this court vide order dated 03.04.2023 and directed that the names of defendant nos. 2 and 3 be struck off from array of the parties.
5. The defendant filed written statement and inter alia submitted that the plaintiff has not come to the court with clean hands and has not placed on record the complete statement of Account/Ledger maintained by the plaintiff of the defendant. It was stated that as per the ledger/Statement of Account filed by the plaintiff from 01.04.2016, the opening balance was to the tune of Rs. 91,00,909/-, however, the plaintiff has failed to clarify as to how the said opening balance was arrived. It was stated that the plaintiff has manipulated the entries and opening balance in the said ledger/statement of accounts and shown the opening balance as Rs. 91,00,909/-, whereas, the plaintiff prior to filing of the present suit by way of email had forwarded the ledger to the plaintiff for the period 01.04.2015 to 31.03.2016 wherein the closing balance was shown as Rs. 52,75,909/- through email dated 23.09.2016 which was also disputed. It was stated that plaintiff has not placed on record a copy of even a single invoice towards the goods as alleged by the plaintiff to be supplied to the defendant which would show the opening balance of Rs. 91,00,909/- as on 01.04.2016 to be self contradictory. It was stated that the six cheques as mentioned in the plaint were not issued by defendant to the plaintiff towards liability CS(COMM) 5/2019 M/s M. P. Electronics vs. M/s Sarthak Electronics Pvt. Ltd. Page No.5 of 28 of outstanding dues, these were not issued on 18.10.2018, the date was filled by the plaintiff on its own along with the amount along with name in two cheques and the dates on all other remaining cheques were filled by the plaintiff on its own. It was stated that the cheques as alleged by the plaintiff to be issued by the defendant to the plaintiff was issued by the defendant somewhere in the year 2015 which were not returned by the plaintiff despite receiving the payment on the pretext that the cheques were washed out due to water logging in the basement in the godown of the plaintiff at Tilak Nagar. It was stated that the plaintiff has now used the said cheques for getting undue gain from the defendant. It was stated that copies of statement of accounts of defendant would show that several numbers of cheques were used in the year 2015 by the defendant. It was stated that the plaintiff has received much more payment from the defendant by way of cash and by way of RTGS and the plaintiff has also acknowledged of receiving the payment in cash by way of confirmation through email. It was stated that the plaintiff has also not placed/filed Certificate under Section 65B of the Indian Evidence Act in support of Statement of Account/Ledger maintained by the plaintiff although it is computer generated. It was stated that the plaintiff and the defendant were in the same business and it was plaintiff who used to visit the showroom of the defendant. It was further stated that the plaintiff used the premises of the defendant for running its business for almost a period of 6 years without paying a single penny towards rent for use and occupation charges. It was further stated that whatever payment was due has already been paid by the defendant to the plaintiff and rather the defendant has made the excess payment to the plaintiff as reflected in the Statement of Account maintained by the defendant. It was stated that the plaintiff CS(COMM) 5/2019 M/s M. P. Electronics vs. M/s Sarthak Electronics Pvt. Ltd. Page No.6 of 28 has not given the entry of the cash payment made by the defendant and the plaintiff has made entry towards interest. It was specifically denied that the plaintiff and the defendant had worked till 04.05.2017 or that there was a liability of Rs. 91,45,219/- against the defendant or that thereafter the defendant had stopped the business with the plaintiff. It was stated that the defendant closed its business on 04-05.11.2016. It was specifically denied that the plaintiff had arranged a meeting with the defendant in the month of October, 2018 and demanded its amount by showing amount details or that the defendant accordingly issued the cheques in question for a single date. The defendant submitted that the said cheques were not issued by it in favour of the plaintiff and the same were kept in the showroom of the defendant from where the plaintiff had taken the same in the year 2015 as all the series of the cheques were used by the defendant in the year 2015 and not in the year 2018. The defendant denied that the cheques were issued by it towards admitted liability and the same were presented for encashment which were returned unpaid as mentioned in the corresponding paragraph of the plaint. The defendant stated that it has made payment over and excess as clearly reflected in the Statement of Account maintained by the defendant and also forwarded by the plaintiff as the plaintiff had not given entry to the cash payment made by the defendant and the entry towards interest was credited by the plaintiff. The defendant submitted that it was the plaintiff who had cheated it by misusing the said cheques in question as for the period of almost 6-7 years, the plaintiff used the premises of the defendant for his business requirement without giving even a single penny. It was stated that the plaintiff issued a legal notice and the defendant neither made the payment nor gave any reply. It was CS(COMM) 5/2019 M/s M. P. Electronics vs. M/s Sarthak Electronics Pvt. Ltd. Page No.7 of 28 submitted that the plaintiff had issued a legal notice without any cause or action and since no amount was due and payable by the defendant to the plaintiff, the defendant neither issued any reply to false notice nor made any payment. It was stated the plaintiff has filed a criminal case against the defendant under Section 138 of the Negotiable Instruments Act, 1881 and the notices were issued . It was submitted that the said complaint was false and frivolous and rather it was the plaintiff who had cheated the plaintiff by misusing the said cheques as on the one hand plaintiff used the premises of the defendant for his business requirement without giving a single penny and further the defendant had made payment in excess, the plaintiff had not made entry for the cash payment and the entries towards interest were credited by the plaintiff. It was stated that the notice was served on the Janak Puri address of the defendant and not at Raja Puri address as the defendant had shut down its business in the month of December, 2016 and the plaintiff was also winding up its work from the said place of the defendant from where the plaintiff was also running its business. The defendant thus prayed that the present suit be dismissed.
6. As per record, the plaintiff has not filed any replication to the written statement of the defendant and vide order dated 19.12.2023, the Ld. Counsel for the plaintiff stated that the plaintiff did not want to file any replication.
7. As per record, from the pleadings of the parties, following issues were framed on 03.02.2024:
1. Whether the plaintiff is entitled to recover from the defendants, jointly and severally, a sum of Rs. 91,45,219/-
CS(COMM) 5/2019 M/s M. P. Electronics vs. M/s Sarthak Electronics Pvt. Ltd. Page No.8 of 28 (Rupees ninety one lakh forty five thousand two hundred nineteen only), as prayed in the plaint? OPP
2. If answer to issue no. 1 is in affirmative, whether the plaintiff is entitled to interest? If so, at what rate and for which period? OPP
3. Relief.
8. The plaintiff in order to prove its case has examined only one witness i.e. PW-1 Sh. Parminder Pal Singh, Proprietor of the plaintiff, who has tendered his evidence by way of affidavit as Ex. PW1/1. PW-1 in his affidavit Ex. PW1/1 has primarily deposed on the lines of the facts as mentioned in the plaint . He has also relied upon the following documents:
(i) Internet generated documents showing record of directorship of Sh. Rajiv Goel and Ms. Rajni Goel which is Mark A (Colly).
(ii) The copy of the Ledger Account of the defendant Sarthak Electronics P. Ltd. as maintained by the plaintiff as Mark B (Colly).
(iii) The copy of cheques bearing no. 911973, 911974, 907579, 907580, 907581 and 907582 issued by the director of Sarthak Electronics Pvt. Ltd. in favour of the plaintiff are Mark C (Colly) and their common Cheques Return Memo as Mark D (Colly).
(iv) Legal Notice dated 29.10.2018 issued to the defendant as Ex.
PW1/A.
(v) Certified copies of the complaint under Section 138/142 of Negotiable Instruments Act, 1872 as filed by the plaintiff against the defendant before the court of Ld. CMM (East), Karkardooma Courts, Delhi and the certified copy of order dated 06.12.2018 of Sh. Rakesh Kumar Rampuri, the then CS(COMM) 5/2019 M/s M. P. Electronics vs. M/s Sarthak Electronics Pvt. Ltd. Page No.9 of 28 Ld. MM, N.I.Act (East), KKD Courts in the CC No.5130/18 as Ex. PW1/B (Colly).
(vi) The Returned Envelopes of the Legal Notices sent to Sh.
Rajiv Goel, Director of the defendant and the defendant company at address 17A, Block A, Rajapuri, Opposite Sector-5, Dwarka, New Delhi as Ex. PW1/C (Colly).
(vii) Sending proof and tracking reports of Legal Notice to the defendant at Janakpuri address as Ex. PW1/D (Colly).
8.1 PW-1 during his cross examination inter-alia admitted that he had sent the e-mail dated 29.09.2015 Ex. PW1/D-1 to the defendant containing the attachment (Ledger Account) Ex.PW1/D-2. PW-1 further admitted that he had sent email dated 23.09.2016 Ex. PW1/D-3 to the defendant containing the attachments (Ledger Account) Ex. PW1/D-4.
9. The record would show that the defendant has examined Sh. Rajiv Goyal, its AR as DW-1 who has filed and tendered his evidence by way of affidavit as Ex. DW1/A. He deposed primarily on the lines of the facts as mentioned in the written statement. He relied upon the following documents:
(i) The extract from the Minutes of the Board Meeting of the defendant company dated 17.06.2017 as Mark A.
(ii) E-mail dated 23.09.2016 which is exhibited as Ex.DW1/2 in the affidavit is already exhibited in the testimony of PW1 as Ex. PW1/D3 and attachments (Ledger Account) as Ex.
PW1/D4.
(iii) The Bank Statement of defendant company Account No. 2379261000605 from 04.02.2015 till 28.08.2015 as Ex.DW1/3 (Colly).
CS(COMM) 5/2019 M/s M. P. Electronics vs. M/s Sarthak Electronics Pvt. Ltd. Page No.10 of 28
(iv) E-mail dated 16.04.2015 sent by plaintiff to the defendant as Ex.DW1/4 (Colly).
(v) E-mail dated 29.09.2015 sent by plaintiff to the defendant along with its attachment as already Ex.PW1/D1 and Ex. PW1/D2.
(vi) E-mail dated 11.12.2015 sent by plaintiff to the defendant as Ex.DW1/5 (Colly).
(vii) Certificate of DW1 under Section 65B of the Indian Evidence Act, 1872 as Ex.DW1/6 bearing his signatures at point X. 9.1 During the cross examination of DW1, the above said six cheques were proved as Ex. DW1/P1 (colly). The e-mail dated 11.06.2016 along with attachment as sent by plaintiff to defendant is Ex. DW1/P2 (colly). The 2nd attachment of e-mail dated 23.09.2016 is Ex. DW1/P3. The email dated 09.07.2016 and Sarthak Ledger Account are Ex. DW1/P4 (colly)[inadvertently mentioned as Ex. DW1/P1 (colly) in the evidence and it may be read as Ex. DW1/P4 (colly)].
10. The defendant also summoned a witness i.e. Sh. Ajay Kumar, Scale - I Officer at Canara Bank, Branch at 259 A, Saheed Chandra Marg, New Delhi who was examined as DW2. He deposed that he was summoned to bring the relevant record of date of issuance of cheque book containing cheques bearing no. 911973, 911974, 907579, 907580, 907581 and 907982 for account bearing no. 2379261000605 in the name of Sarthak Electronics Pvt. Limited. He deposed that the said bank account was in the name of Sarthak Electronics Pvt. Limited, however it was lying closed since CS(COMM) 5/2019 M/s M. P. Electronics vs. M/s Sarthak Electronics Pvt. Ltd. Page No.11 of 28 15.03.2017. He further deposed that a query in that regard was raised before Head Office of Canara Bank at Bangaluru. He further deposed that as per answer, the cheque book containing 100 leaves from serial no. 907501 to 907600 was issued by the bank on 12.02.2015 in the name of Sarthak Electronics Pvt. Ltd. and further cheque book containing 100 leaves from serial no. 911901 to 912000 was issued by the bank on 19.05.2015 in the name of Sarthak Electronics Pvt. Ltd. and both the said cheque books were for the account 2379261000605. He in answer to a question deposed that it was a normal practice that once a request for closing of a bank account of a customer was received by the bank then the bank asks to produce the remaining cheque book and ATM card etc and thereafter destroy the said cheque book and ATM cards pertaining to that account while closing the said account, however, if a customer says he is not having the cheque book or ATM cards with him or was unable to produce it then in that case a noting is taken from the customer in that regard on the application and thereafter the remaining cheque books and ATM Cards etc are destroyed in the CBS (Core Banking System). DW2 deposed during his cross examination that after closing a bank account of a customer, the record of the previous transaction was normally kept for 10 years by the bank from the date the said transaction had occurred. He deposed that the account opening form and the accompanying documents are kept preserved by the bank for all times to come. He also deposed that a customer can issue a cheque at any time after a cheque book is issued to him by the bank. He deposed that a bank has no responsibility and liability if a customer issues a cheque even after closure of his bank account. He deposed that the record of a transaction of year 2015 might be available in the bank and from CS(COMM) 5/2019 M/s M. P. Electronics vs. M/s Sarthak Electronics Pvt. Ltd. Page No.12 of 28 'might be' he meant that record may be available or may not be available, however, it should be available till 10 years from the transaction date. DW2 could not say if after closing of bank account of Sarthak Electronics Pvt. Ltd., it was asked by the bank to produce the remaining cheque book and ATM Cards. He volunteered that only the employee posted at that time could tell about it.
11. I have heard the final arguments and perused the record.
12. My issue wise findings are as under:
Issue No. 1Whether the plaintiff is entitled to recover from the defendants, jointly and severally, a sum of Rs. 91,45,219/- (Rupees ninety one lakh forty five thousand two hundred nineteen only), as prayed in the plaint? OPP The said issue due to striking of names of defendant nos. 2 & 3 from the array of the parties may correctly be read as:
'Whether the plaintiff is entitled to recover from the defendant, a sum of Rs. 91,45,219/- (Rupees ninety one lakh forty five thousand two hundred nineteen only), as prayed in the plaint?' OPP 12.1 Ld. Counsel for the defendant has inter-alia argued that the suit of the plaintiff is absolutely unreliable as the plaintiff in the plaint or in the legal notice Ex.PW1/A or in the evidence by way of affidavit Ex.PW1/1 has nowhere mentioned about any friendly loan having been given by the plaintiff to the defendant, however, the plaintiff/PW1 during the cross-examination has admitted that he had also given friendly loan to the defendant company through cheques CS(COMM) 5/2019 M/s M. P. Electronics vs. M/s Sarthak Electronics Pvt. Ltd. Page No.13 of 28 and RTGS. Ld. Counsel for the defendant has submitted that it will not affect the case of the plaintiff.
12.2 In the said regard, the prayer clause of the plaint would show that the plaintiff is praying for a money decree of Rs.91,45,219/- against the defendant along with interest @ 18.00% per annum from the date of filing of the suit till the date of realization and costs. PW1, who is the proprietor of the plaintiff has inter-alia deposed in his cross-examination that the plaintiff is a proprietorship firm which was started by him as its proprietor in the year 2011. He has also deposed that the present suit has been filed for recovery of Rs. 91,45,219/-. PW1 was asked a question during his cross-examination as to what was the break up of the said amount of Rs. 91,45,219/- to which he replied that the said amount consisted of against the material supplied by the plaintiff to the defendant and also friendly loan given by him to the defendant through cheques and RTGS and that the cheques were handed over to Mr.Rajiv Goyal (DW1) i.e. the director of the defendant company. PW1 could not tell the amount of loan in the said suit amount of Rs. 91,45,219/- and also could not tell the amount against the material supplied by the plaintiff to the defendant in the said suit amount of Rs.91,45,219/-. PW1 admitted that he had sent the e-
mail dated 29.09.2015 Ex. PW1/D-1 to the defendant containing the attachment (ledger account) Ex. PW1/D-2 which inter-alia mentioned an entry of 31.03.2015 regarding Sarthak Loan of Rs.45,09,000/-. PW1 did not know the outstanding amount pending against the defendant if the said amount of Rs.45,09,000/- was deducted. PW1 deposed that the said loan amount was given through RTGS and also through cheques on different occasions. He CS(COMM) 5/2019 M/s M. P. Electronics vs. M/s Sarthak Electronics Pvt. Ltd. Page No.14 of 28 denied the suggestion that no such loan was ever given by the plaintiff to the defendant or that therefore, he did not know about the details or the dates when the said loan was allegedly given to the defendant. He admitted that he had not filed on record any document to show that the defendant had asked for a loan from the plaintiff or that the plaintiff had extended any such loan to the defendant. He further deposed that he files Income Tax Returns, the said loans were mentioned in his Income Tax Returns, however, admitted that he had not filed or proved his Income Tax Returns on record. PW1 during his cross-examination inter-alia volunteered that the defendant had requested not to show the personal friendly loan amount in Ex.PW1/D-4 as he had to take another loans and FD from the bank whereas he had shown the said loan amounts in Mark B (Colly). PW1 further deposed that he had not placed any such document on record to show that the defendant had requested him not to show the personal friendly loan amount in Ex. PW1/D-4. PW1 during his cross-examination specifically admitted that there was no mention of any such friendly loan allegedly given by the plaintiff to the defendant either in the plaint or in the legal notice Ex.PW1/A or in the evidence by way of affidavit Ex. PW1/1 or any other document on judicial record. In that regard DW1 admitted in his cross-examination that the business transactions between the plaintiff and the defendant used to be on credit basis and a running account was being maintained in that regard. The e-mail dated 23.09.2016 is Ex.PW1/D3 and its second attachment is Ex.DW1/P3. DW1 admitted that he had also received the said attachment Ex.DW1/P3 along with the said e-mail Ex. PW1/D3. DW1 during his cross-examination was put a question that Ex. DW1/P3 reflected that total Rs.38,25,000/- were given as a friendly loan by the CS(COMM) 5/2019 M/s M. P. Electronics vs. M/s Sarthak Electronics Pvt. Ltd. Page No.15 of 28 plaintiff in the account of the defendant company to which DW1 replied that the plaintiff had never given him any such loan and the said ledger account Ex. DW1/P3 also did not pertain to the defendant company. He deposed that the name of the defendant company is Sarthak Electronics Pvt. Ltd. DW1 was further put a question that from 13.05.2015 till 23.02.2016, a friendly loan totalling Rs. 38,25,000/- as reflected in Ex. DW1/P3 was given by the plaintiff to the defendant in the account of Sarthak Electronics Pvt. Ltd. to which DW1 replied that he could not reply the said question without checking his record and that he could not bring the said record as it was very old of the year 2015-16. DW1 during his cross-examination volunteered that the last entry dated 31.03.2015 in Ex.PW1/D2 of Rs.45,09,000/- regarding Sarthak Loan was a wrong entry and despite orally informing the plaintiff, the plaintiff did not rectify the said wrong entry due to which the closing balance was coming as Rs. 57,68,542/-. He denied the suggestion that he had asked the plaintiff to remove the entry of Rs. 45,09,000/- shown as Sarthak Loan in Ex. PW1/D2 because he was finding it difficult to get the OD limits and loans from banks if a loan entry would be standing his name in the ledger account. He denied the suggestion that the ledger account which is part of Ex. DW1/P1 (Colly) also includes the loan given by the plaintiff to the defendant on different dates totalling Rs. 45,09,000/-. DW1 during his cross-examination was put a question that the plaintiff had transferred Rs. 12,20,000/- as a friendly loan in Canara Bank account of Sarthak Electronics i.e. his proprietorship concern on 28.08.2015 to which he replied that the said amount was transferred by the plaintiff, however, it was not transferred as a friendly loan but was part of business transactions. He denied the suggestion that the said payment of Rs. 12,20,000/- CS(COMM) 5/2019 M/s M. P. Electronics vs. M/s Sarthak Electronics Pvt. Ltd. Page No.16 of 28 was part payment towards the friendly loan to Sarthak Electronics. He also denied the suggestion that a friendly loan of Rs. 38,25,000/- was also given by plaintiff to Sarthak Electronics which is reflected in the ledger account Ex. DW1/P-3.
12.3 It is the case of the plaintiff and the plaintiff has to stand on its own legs. The onus to prove issue no. 1 is also on the plaintiff. Perusal of plaint or the legal notice dated 29.10.2018 Ex. PW1/A given by plaintiff to the defendant or the evidence by way of affidavit of PW1 i.e. Ex. PW1/1 would show that there is not even an iota of mention of any alleged friendly loan given by plaintiff to the defendant. It is pertinent to note and as discussed above, PW1 during his cross-examination has specifically admitted that there was no mention of any such friendly loan given by the plaintiff to the defendant either in the plaint or in the legal notice Ex. PW1/A or in the evidence by way of affidavit Ex. PW1/1 or any other document on judicial record. The first time the plaintiff mentioned this fact was in his cross-examination when he deposed that the break up of the suit amount of Rs. 91,45,219/- consisted of material supplied by the plaintiff to the defendant and also friendly loan given by the plaintiff to the defendant company through cheques and RTGS. The plaintiff during the examination in chief of PW1 has only sought to rely upon one ledger account of the defendant from 01.04.2016 to 31.03.2018 which is Mark B (Colly), however, as would be discussed in the next part of this judgment, not only Mark B (Colly) has not been proved by the plaintiff but is also completely unreliable. Further, perusal of Mark B (Colly) would also show that nowhere in it any entry with specific name of any allegedly friendly loan given by the plaintiff to the defendant has CS(COMM) 5/2019 M/s M. P. Electronics vs. M/s Sarthak Electronics Pvt. Ltd. Page No.17 of 28 been mentioned. Although, the attachment to e-mail Ex. PW1/D1 i.e. Ex. PW1/D2 mentions the entry dated 31.03.2015 of Sarthak Loan of Rs.45,09,000/-, however, it would be immaterial as firstly, as discussed above, it is not the case of the plaintiff even in the plaint that the plaintiff had extended any friendly loan to the defendant and secondly DW1 during his cross-examination has specifically volunteered that the last entry dated 31.03.2015 of Ex.PW1/D2 of Rs. 45,09,000/- regarding Sarthak Loan was a wrong entry and despite orally informing the plaintiff, the plaintiff did not rectify the said wrong entry due to which the closing balance was coming as Rs. 57,68,542/-. In that regard, it is further pertinent to note that as per Section 34 of the Indian Evidence Act, 1872 (which would be applicable to this case) although entries in the books of accounts including those maintained in an electronic form regularly kept in the course of business are relevant but such statements shall not alone be sufficient evidence to charge any person with liability. The said ledger account Ex. PW1/D2 was only stated to be sent by the plaintiff to the defendant along with e-mail dated 29.09.2015 Ex.PW1/D1, however, it is nowhere the case of the plaintiff that the defendant had acknowledged or agreed to the said ledger making him liable for it. Further, although DW1 in his cross-examination has admitted that he had received the attachment Ex.DW1/P3 (Sarthak Electronics - Loan - Ledger Account from 01.04.2015 to 31.03.2016) along with the e-mail dated 23.09.2016 Ex. PW1/D3, however, as mentioned above, DW1 in answer to a question has specifically deposed that the plaintiff had never given him any such loan (of Rs. 38,25,000/-) and the said ledger account also did not pertain to the defendant company. As discussed earlier, no reliance can also be placed on the said ledger account of loan - Ex.DW1/P3 CS(COMM) 5/2019 M/s M. P. Electronics vs. M/s Sarthak Electronics Pvt. Ltd. Page No.18 of 28 as the plaintiff has not even stated in his pleadings i.e. the plaint that he had given any loan to the defendant and secondly as per Section 34 of the Indian Evidence Act, 1872 the entries in the books of accounts shall not alone be sufficient evidence to charge any person with liability. The defendant has not acknowledged or agreed to the said ledger making him liable for it. In the said circumstances, the plaintiff has failed to prove that it had given any friendly loan to the defendant which would raise a strong doubt not only on the total amount of recovery of Rs. 91,45,219/- as mentioned in the prayer clause of the plaint but also on the entire case of the plaintiff.
12.4 Further, as mentioned above, the plaintiff through PW1 while tendering his evidence by way of affidavit Ex.PW1/1 had relied only upon copy of one ledger account of the defendant as maintained by the plaintiff which is Mark B (Colly). As per record, the plaintiff has failed to properly prove it as it seems to be photocopy of computer print out of the ledger record of the defendant from 01.04.2016 to 31.03.2018, however, no corresponding affidavit under Section 65B of Indian Evidence Act, 1872 regarding admissibility of electronic records has been filed along with it. It is pertinent to mention that the plaintiff subsequently filed a Certificate under Section 63 of Bhartiya Sakshya Adhiniyam, 2023, however, its perusal would show that it did not refer or mention about said ledger Mark B (Colly). It is further pertinent to note that PW1 during his cross-examination has inter-alia deposed that although invoices were raised by the plaintiff while supplying the material to the defendant, however, he had neither filed nor proved any such invoice on record. PW1 further deposed that the copy of the ledger account Mark B (Colly) is CS(COMM) 5/2019 M/s M. P. Electronics vs. M/s Sarthak Electronics Pvt. Ltd. Page No.19 of 28 perhaps from the year 2015 to year 2017 and admitted that he had not filed the complete ledger account on record. He surprisingly further deposed in his cross-examination in that regard that he had given the complete ledger account to his ld. Counsel, however, his ld. Counsel had not filed the complete ledger account on record. PW1 further admitted in his cross-examination that he had sent the e-mail dated 23.09.2016 Ex.PW1/D3 to the defendant containing the attachments (ledger account) Ex. PW1/D4 which mentioned the opening debit balance of the defendant as Rs. 57,68,542/-. PW1 admitted that in Ex.PW1/D4, the closing balance was mentioned as Rs.52,75,909/- as on 30.03.2016 as outstanding against the defendant. He admitted that in the ledger account Mark B (Colly), the opening balance as on 01.04.2016 had been shown as Rs.91,00,909/-. It raises a very strong doubt on the veracity of not only the ledger Mark B (Colly) but also the ledger Ex.PW1/D4. When the closing balance as on 30.03.2016 in Ex.PW1/D4 was mentioned as Rs. 52,75,909/- then the opening balance as on 01.04.2016 in Mark B (Colly) could not have been Rs. 91,00,909/-. PW1 has tried to explain through voluntarily statement that the defendant had requested not to show the personal friendly loan in Ex.PW1/D4 as he had to take another loans and FD from the bank whereas PW1 had shown the said loan amounts also in Mark B (Colly) and hence the balance of Rs. 91,00,909/- had been shown as opening balance as on 01.04.2016. This voluntary statement would, however, not benefit the plaintiff as PW1 has specifically deposed further in his cross-examination that he had not placed any such document on record to show that the defendant had requested him not to show the personal friendly loan amount in Ex. PW1/D4. Further, as already discussed above, PW1 also admitted in his cross- CS(COMM) 5/2019 M/s M. P. Electronics vs. M/s Sarthak Electronics Pvt. Ltd. Page No.20 of 28 examination that there is no mention of any friendly loan allegedly given by the plaintiff to the defendant either in the plaint or in the legal notice Ex.PW1/A or in the evidence by way of affidavit Ex. PW1/1 or any other document on judicial record. It would show that on the one hand the plaintiff has not properly proved the ledger account Mark B (Colly) and on the other hand the veracity of the ledger accounts Mark B (Colly) and Ex.PW1/D4 becomes highly doubtful. It is again pertinent to note that the defendant has nowhere admitted the correctness of the entries of the ledger account and it is a settled law that mere books of accounts shall not alone be sufficient evidence to charge any person with liability and the illustration to Section 34 of Indian Evidence Act, 1872 would show that the entries are relevant but are not sufficient, without other evidence, to prove the debt. It also raises a strong doubt on the entire case of the plaintiff.
13. Ld. Counsel for the plaintiff has argued to the effect that the copy of cheques bearing no. 911973, 911974, 907579 to 907582 were issued by the director of the defendant in favour of the plaintiff which were dishonoured. The said cheques have been proved as Mark C (Colly) in the testimony of PW1 and are also Ex.DW1/P1 (Colly) in the testimony of DW1. He submitted that the total amount of these cheques is equivalent to suit amount i.e. Rs. 91,45,219/- and the said cheques were dishonoured on presentation vide common cheques return memo Mark D (Colly). He submitted that the presumptions under the Negotiable Instruments Act, 1881 would be applicable in favour of the plaintiff and against the defendant and the suit of the plaintiff be decreed. He further submitted that the plaintiff has also preferred a complaint CS(COMM) 5/2019 M/s M. P. Electronics vs. M/s Sarthak Electronics Pvt. Ltd. Page No.21 of 28 under Section 138/142 of the Negotiable Instruments Act, 1881 against the defendant which is Ex. PW1/B (Colly). Ld. Counsel for the defendant on the other hand submitted that the presumptions under the Negotiable Instruments Act, 1881 are rebuttable presumptions which have been successfully rebutted by the defendant since the plaintiff has utterly failed to prove its case. He further submitted that the plaintiff admittedly has not filed any invoice and the veracity of his ledger accounts is also doubtful and hence the plaintiff has failed to prove that the said cheques were issued against any liability. Both, ld. Counsel for the plaintiff and defendant also referred to the testimony of DW2 in that regard. Ld. Counsel for the defendant also referred to the bank statement of the defendant company of account no. 2379261000605 from 04.02.2015 till 28.08.2015 in that regard which has been proved as Ex. DW1/3 (Colly).
13.1. The above said cheques have been proved as Mark C (Colly) in the testimony of PW1 and Ex. DW1/P1 (Colly) during the cross-examination of DW1. As per record, all the said 6 cheques bear the same date i.e. 20.10.2018. The cheques no. 907579 to 907582 are of Rs. 20,00,000/- each, whereas cheque no. 911973 is of Rs. 10,00,000/- and cheque no. 911974 is of Rs.1,45,219/-. The common cheque returning memo of the said cheques is Mark D (Colly). It would show that reason of return of the cheque no. 907579 and 907580 was account closed, reason for return of cheques nos. 907581 and 907582 was kindly contact drawer/drawee bank and reason for return of cheques no. 911973 and 911974 was account closed. PW1 denied the suggestions during his cross- examination that no cheque was issued by the defendant to the CS(COMM) 5/2019 M/s M. P. Electronics vs. M/s Sarthak Electronics Pvt. Ltd. Page No.22 of 28 plaintiff in the year 2018 or that the above said cheques had been given by the defendant to the plaintiff in the year 2015 and at that time the said cheques were undated or that the defendant has no liability to pay any amount to the plaintiff. In that regard DW1 in his evidence by way of affidavit Ex. DW1/A has inter-alia deposed to the effect that submissions of the plaintiff that the said cheques were issued by the defendant on 18.10.2018 towards the liability of the outstanding dues was false and baseless. DW1 further deposed that the said cheques were not issued by the defendant to the plaintiff on the said date i.e. as mentioned by the plaintiff and the said date was filed by the plaintiff of its own along with the amount and name in 2 cheques and date on all the cheques was filled by the plaintiff on its own. DW1 further deposed that the said cheques were issued by the defendant somewhere in the year 2015 which were not returned by the plaintiff despite the fact of receiving the payment on the pretext that the said cheques were washed out due to water logging in the basement where the plaintiff maintained his godown at Tilak Nagar. DW1 in his cross-examination inter-alia deposed that he used to make payments to the plaintiff as well as received payment from the plaintiff from his Canara Bank account mentioned in Ex. DW1/3 and also through his HDFC account. He volunteered that cash transactions also used to take place in between the parties. DW1 during his cross-examination also inter-alia deposed that after going through the copy of said 6 cheques on record, he could say that the dates filled in the said 6 cheques was not filled by him. He deposed that the name and amount in cheques no. 907579, 907580, 907581 and 907582 were filled by him and all the said 6 cheques bear his signatures. He denied the suggestion that all the particulars and contents of the said 6 cheques were filled CS(COMM) 5/2019 M/s M. P. Electronics vs. M/s Sarthak Electronics Pvt. Ltd. Page No.23 of 28 by him. He denied the suggestion that as on 04.05.2017, the outstanding dues to be paid by him to the plaintiff was Rs.91,45,219/- or that he had issued the said 6 cheques in favour of the plaintiff for the said amount.
14. The Hon'ble Supreme Court of India in the case titled as Vijay vs. Laxman and Another, (2013) 3 Supreme Court Cases 86 has inter-alia held as follows:
"20. .............. We are not unmindful of the fact that there is a presumption that the issue of a cheque is for consideration. Sections 118 and 139 of the Negotiable Instruments Act make that abundantly clear. That presumption is, however, rebuttable in nature. What is most important is that the standard of proof required for rebutting any such presumption is not as high as that required of the prosecution. So long as the accused can make his version reasonably probable, the burden of rebutting the presumption would stand discharged. Whether or not it is so in a given case depends on the facts and circumstances of that case. It is trite that the courts can take into consideration the circumstances appearing in the evidence to determine whether the presumption should be held to be sufficiently rebutted. The legal position regarding the standard of proof required for rebutting a presentation is fairly well settled by a long line of decisions of this court.
21. In M.S.Narayana Menon vs. State of Kerala, while dealing with that aspect in a case under Section 138 of the Negotiable Instruments Act, 1881, this Court held that the presumptions under Sections 118 (a) and 139 of the Act are rebuttable and the standard of proof required for such rebuttable is preponderance of probabilities and not proof beyond reasonable doubt. .........."
CS(COMM) 5/2019 M/s M. P. Electronics vs. M/s Sarthak Electronics Pvt. Ltd. Page No.24 of 28 It is thus evident that it is a settled law that the presumptions under Section 118(a) and 139 of the Negotiable Instruments Act, 1881 are rebuttable and the standard of proof required for such rebuttable is preponderance of probabilities and not proof beyond reasonable doubt.
15. The testimony of DW2 in detail has already been recorded above. The above said cheques Ex.DW1/P1 (Colly) would show that these were issued on account no. 2379261000605 of Canara Bank, Branch Uttam Nagar, New Delhi. As mentioned above, all the said 6 cheques bear the date 20.10.2018. DW2 has specifically deposed to the effect that the said account was in the name of Sarthak Electronics Pvt. Limited, however, it was lying closed since 15.03.2017. DW2 also deposed to the effect that the cheque book containing 100 leaves from serial no. 907501 to 907600 was issued by the bank on 12.02.2015 in the name of Sarthak Electronics Pvt. Ltd. and further cheque book containing 100 leaves from serial no. 911901 to 912000 was issued by the bank on 19.05.2015 in the name of Sarthak Electronics Pvt. Ltd. for the above said account. He also deposed to the effect that it was a normal practice that once a request for closing of a bank account of a customer was received by the bank then the bank asks to produce the remaining cheque book and ATM Cards etc. and thereafter destroys the said cheque book and ATM Cards pertaining to that account while closing the said account, however, if a customer says that he is not having the cheque book of ATM Cards with him or is unable to produce it then in that case a noting is taken from a customer in that regard on the application and thereafter the remaining cheque books and ATM Cards etc. are destroyed in the CS(COMM) 5/2019 M/s M. P. Electronics vs. M/s Sarthak Electronics Pvt. Ltd. Page No.25 of 28 CBS (Core Banking System). He also inter-alia deposed in his cross-examination to the effect that a bank has no responsibility and liability if a customer issues a cheque even after closure of his bank account. It is thus evident from the testimony of DW2 and the record that the cheque books containing the said 6 cheques were issued to Sarthak Electronics Pvt. Ltd. in February and May, 2015 for the above said bank account, however, the said bank account was lying closed since 15.03.2017. The said 6 cheques, however, bear the subsequent date of 20.10.2018. The testimony of DW2 further shows that as a normal practice the bank would have asked the defendant to produce the remaining cheque book and ATM Cards at the time of receiving request for closing of a bank account and would have destroyed the said cheque books pertaining to the said account while closing the said account or a noting would have been taken from the defendant if the cheque book would not have been produced and thereafter the remaining cheque books and ATM Cards would have been destroyed in Core Banking System. DW2 could not say if after closing of bank account of defendant, it was asked by the bank to produce the remaining cheque book and ATM Cards. The said testimony of DW2 would lead credence to the testimony of DW1 as mentioned in the evidence by way of affidavit Ex.DW1/A to the effect that the said cheques were issued by the defendant to the plaintiff somewhere in the year 2015 which were not returned by the plaintiff despite the fact of receiving the payment. Moreover, the paragraph no. 7 of the legal notice dated 29.10.2018 Ex.PW1/A as sent by the plaintiff to the defendant would inter-alia show that it has been mentioned to the effect that in the month of October, 2018, the defendant issued said 6 cheques after plaintiff showing him the account details against admitted CS(COMM) 5/2019 M/s M. P. Electronics vs. M/s Sarthak Electronics Pvt. Ltd. Page No.26 of 28 liability, however, as already discussed above, the plaintiff has failed to prove its case and the veracity of ledgers/account details of the plaintiff is also very doubtful. As already further discussed above, PW1 during his cross-examination has deposed that the said amount of Rs. 91,45,219/- also included friendly loan, however, has admitted that there is no mention of any such friendly loan allegedly given by the plaintiff to the defendant either in the plaint or the legal notice Ex.PW1/A or in the evidence by way of affidavit Ex. PW1/1 or any other document on judicial record. These facts along with the above said discussion raise a very strong doubt on the above said amount of Rs. 91,45,219/- to be the admitted liability. In the said circumstances, the defendant has successfully rebutted the presumptions under Section 118 and 139 of the Negotiable Instruments Act, 1881 beyond preponderance of probabilities.
16. In view of above said discussion, it is held that the plaintiff has failed to prove the issue no. 1 to the effect that it is entitled to recover from the defendant a sum of Rs. 91,45,219/-, as prayed in the plaint. Issue no. 1 is accordingly decided in favour of the defendant and against the plaintiff.
17. Issue No. 2If answer to issue no. 1 is in affirmative, whether the plaintiff is entitled to interest? If so, at what rate and for which period? OPP As issue no. 1 has been decided against the plaintiff, hence it is held that plaintiff is not entitled to any interest. The plaintiff has thus failed to prove the issue no. 2 which is decided in favour of the defendant and against the plaintiff.
CS(COMM) 5/2019 M/s M. P. Electronics vs. M/s Sarthak Electronics Pvt. Ltd. Page No.27 of 28
18. Issue No. 3.
Relief In view of my above said discussion, it is held that the plaintiff has failed to prove its case against the defendant. The suit of the plaintiff is thus dismissed.
19. Parties to bear their own costs.
20. File be consigned to the record room.
Digitally
signed by
AMIT
AMIT BANSAL
Announced in open Court BANSAL Date:
2025.03.29
16:42:00
on 29.03.2025 +0530
(Amit Bansal)
District Judge (Commercial Court)-03
South-West, Dwarka Courts, New Delhi
29.03.2025
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