Delhi District Court
Do Best Infoway vs North Eastern Carrying Corporation Ltd on 27 May, 2025
IN THE COURT OF MS. ILLA RAWAT :
DISTRICT JUDGE (COMMERCIAL COURT)-03: (CENTRAL)
TIS HAZARI COURTS (EXTENSION BLOCK) : DELHI.
CS (COMM) No. 2260/2022
CNR No. DLCT01-013694-2022
In the matter of :-
M/S NORTH EASTERN CARRYING CORPORATION LTD.
Having its Corporate Office at:
9062/47, Ram Bagh Road,
Azad Market, Delhi-110 006. .....Plaintiff
Versus
1. M/S GOYAL IMPEX AND INDUSTRIES LTD.
Having its registered office at:-
1291, Sector C-1, Vasant Kunj, New Delhi-110 070.
2. M/S HLG TRADING
Space E, 3rd Floor, Surya Kiran,
92, The Mall Ludhiana,
Punjab-141001.
3. M/S DO BEST INFO WAY
Space E, 3rd Floor, Surya Kiran,
92, The Mall Ludhiana,
Punjab-141001.
4. MS. KANCHAN GOYAL
Director of Goyal Impex and Industries Ltd.
R/o 1291, Sector-C1, Vasant Kunj,
New Delhi-110 070.
(proceedings against defendant no.4 stands abated pursuant
to her death)
CS (COMM) No. 2260/2022 & COUNTER CLAIMS NO.9/23, 10/23 and 11/23 Page no. 1 of 46
Digitally signed
ILLA by ILLA RAWAT
Date:
RAWAT 2025.05.27
16:44:41 +0530
5. MR. HIRA LAL GOYAL
Director of Goyal Impex and Industries Ltd.
R/o 1291, Sector-C1, Vasant Kunj,
New Delhi-110 070.
6. MR. GAGAN GOYAL
Director of Goyal Impex and Industries Ltd.
R/o 1291, Sector-C1, Vasant Kunj,
New Delhi-110 070.
Also at:- 5/IV, The Mall,
Ludhiana, Punjab-141-1.
.....Defendants
AND
COUNTER CLAIM No. 11/2023
CNR No. DLCT01-002768-2023
In the matter of :-
Goyal Impex and Industries Limited
Through its Authorised Signatory Shri H.L. Goyoal
Having its office at
5/IV, The Mall
Ludhiana-141001. ....Counter Claimant/Defendant No.1
Versus
North Eastern Carrying Corporation Ltd.
Through its Principal Officer
Having its Office at
9062/47, Ram Bagh Road,
Azad Market, Delhi-110006. .....Defendant/Plaintiff
AND
CS (COMM) No. 2260/2022 & COUNTER CLAIMS NO.9/23, 10/23 and 11/23 Page no. 2 of 46
Digitally signed
ILLA by ILLA RAWAT
Date:
RAWAT 2025.05.27
16:44:54 +0530
COUNTER CLAIM No. 10/2023
CNR NO. DLCT01-002767-2023
In the matter of :-
HLG Trading
Through its Authorised Signatory Shri Gagan Goyal
Having its office at
Space-E, 3rd Floor,
Surya Kiran Building,
The Mall,
Ludhiana-141001. ....Counter Claimant/Defendant No.2
Versus
North Eastern Carrying Corporation Ltd.
Through its Principal Officer
Having its Office at
9062/47, Ram Bagh Road,
Azad Market, Delhi-110006. .....Defendant/Plaintiff
AND
COUNTER CLAIM No. 9/2023
CNR No. DLCT01-002766-2023
In the matter of :-
Do Best Infoway
Through its Authorised Signatory Shri Gagan Goyoal
Having its office at
HIG-3006, Phase-1, Dugri
Ludhiana-141001. ....Counter Claimant/Defendant No.3
CS (COMM) No. 2260/2022 & COUNTER CLAIMS NO.9/23, 10/23 and 11/23 Page no. 3 of 46
Digitally signed
ILLA by ILLA RAWAT
Date:
RAWAT 2025.05.27
16:45:02 +0530
Versus
North Eastern Carrying Corporation Ltd.
Through its Principal Officer
Having its Office at
9062/47, Ram Bagh Road,
Azad Market, Delhi-110006. .....Defendant/Plaintiff
Date of Institution : 26.09.2022 (Main suit)
: 20.02.2023 (Counter Claims)
Date on which Judgment reserved : 24.05.2025
Date on which judgment pronounced : 27.05.2025
SUIT FOR RECOVERY
AND
COUNTER CLAIMS
JUDGMENT
1. Vide this common judgment I shall dispose of the suit for recovery of Rs.9,77,408/- filed by plaintiff against the defendants as well as three separate counter claims filed by counter claimants/defendants no.1 to 3 against the plaintiff.
CS (COMM) 2260/22
2. Brief facts of the case as averred in the plaint are that plaintiff is a company incorporated under the provisions of Companies Act, 1956, having its office at 9062/47, Ram Bagh Road, Azad Market, Delhi. Sh. R.M. Srivastava, the Law Officer of the plaintiff company, has signed and verified the plaint and filed the suit on behalf of plaintiff company by virtue of Board CS (COMM) No. 2260/2022 & COUNTER CLAIMS NO.9/23, 10/23 and 11/23 Page no. 4 of 46 Digitally signed ILLA by ILLA RAWAT Date:
RAWAT 2025.05.27 16:45:09 +0530 Resolution dated 22.05.2020.
3. It is averred in the plaint that plaintiff is engaged in the business of transportation and carries goods of its clients from one place to other, upon their instructions, either by its own trucks/lorries or hires trucks/lorries from the open market.
4. The defendant no. 1 is stated to be a private limited company, engaged in the business of manufacturing gums, spices and seasonings. The defendants no. 2&3 are stated to be sister concerns of defendant no.1 and the defendants no.4 to 6 are its directors. The defendants no.2&3 are claimed to be owned and controlled by defendant no.1 company.
5. It is further averred that defendants no. 4 to 6 approached the plaintiff at its registered office for availing services of the plaintiff for transportation of its goods/materials from Chennai to different locations. The plaintiff company, at the behest of defendant no. 1, transported various consignments for defendants no.1 to 3, vide different consignments notes and raised invoices/freight bills. The details of various consignments of defendant no.1, defendant no. 2 and defendant no.3, are given separately, in tabular form, in para 5 of the plaint. It is stated that the said consignments were delivered at the desired locations as per specifications of the defendants.
6. It is further averred that despite the fact that the consignments were delivered at desired locations, as per specification of defendants, the defendants avoided making CS (COMM) No. 2260/2022 & COUNTER CLAIMS NO.9/23, 10/23 and 11/23 Page no. 5 of 46 Digitally signed ILLA by ILLA RAWAT Date:
RAWAT 2025.05.27 16:45:15 +0530 payment against the services provided by the plaintiff. As per the running account maintained by the plaintiff, a sum of Rs.9,77,408/- remains outstanding against defendants no.1 to 3 (i.e. Rs.7,62,124/- against defendant no.1, Rs.81,265/- against defendant no. 2 and Rs. 1,34,019/- against defendant no. 3). It is alleged that despite repeated visits to the offices of defendants no.1 to 3 as well as various requests, the defendants failed to pay outstanding amount to the plaintiff. Left with no alternative, plaintiff company issued legal notice dated 19.08.2019, to defendants, calling upon them to pay the outstanding amount. The defendants failed to clear the outstanding amount and/or to reply to the legal notice despite having received the same. The plaintiff also initiated pre-institution mediation proceedings, however, the defendants failed to appear despite service of the notices.
7. Thus aggrieved by the acts of defendants, plaintiff has filed the present suit praying that a decree in the sum of Rs.9,77,408/- be passed against the defendants alongwith pendant lite and future interest @ 12% per annum and the costs of the suit.
8. The defendants no. 1, 4,5&6 have contested the suit by filing a joint Written Statement. The defendants no. 2&3 have also filed their separate Written Statements.
9. In the Written Statement filed on behalf of defendants no. 1,4,5&6 the maintainability of plaintiff's suit has been challenged on the ground that the invoices relied upon by CS (COMM) No. 2260/2022 & COUNTER CLAIMS NO.9/23, 10/23 and 11/23 Page no. 6 of 46 Digitally signed ILLA by ILLA RAWAT Date:
RAWAT 2025.05.27 16:45:23 +0530 plaintiff are forged and fabricated by plaintiff and its officials to cause unlawful gain to themselves and unlawful loss to defendants as undisputedly GST came to be implemented w.e.f. 01.07.2017 whereas the invoices, on which plaintiff has raised its claims, are all of the year 2016, yet they find mention of GST number.
10. The maintainability of suit filed by the plaintiff has also been challenged on the ground that defendants no. 4 to 6 are neither necessary nor proper parties for adjudication of the present suit and that no relief can be claimed against the said defendants as they were merely Directors of the defendant no. 1 company and there is no legal, valid, binding or enforceable liability of defendants no. 4 to 6.
11. Another objection as to suit of plaintiff being barred by limitation has also been taken. Referring to averments made in para 5 of the plaint, it is stated that as per plaintiff, last transaction is dated 22.11.2016 whereas the present suit was filed on 26.09.2022. It is thus stated that suit of plaintiff is barred U/o VII Rule 11(d) of CPC.
12. Next objection regarding maintainability of suit of plaintiff is on the ground of mis-joinder of parties. It is claimed that defendant no. 1 is a separate legal entity and similarly defendants no. 2&3 are also separate legal entities. Defendants no.1to3 have no concern with each other. There is, even otherwise, no privity of contract between plaintiff and defendants no. 1 to 3.
CS (COMM) No. 2260/2022 & COUNTER CLAIMS NO.9/23, 10/23 and 11/23 Page no. 7 of 46 Digitally signed ILLA by ILLA RAWAT Date:
RAWAT 2025.05.27 16:45:30 +0530
13. The fact that plaintiff failed to specify which of the invoices are due or payable and what amount from each invoice is pending and since when, has also been taken as a ground to challenge the suit of the plaintiff.
14. The defendants have further challenged the jurisdiction of Court to entertain the suit of the plaintiff inter alia on the ground that no part of cause of action had arisen within the jurisdiction of Court at Delhi to enable plaintiff to pursue the alleged claim at Delhi.
15. Further objections viz-a-viz plaintiff having concealed material facts, there being deficiency in services rendered by plaintiff and self contradictory pleadings in the plaint, have also been raised to challenge the suit of the plaintiff.
16. On merits, each and every averment made in the plaint has been controverted. It is denied that Sh. R.M. Srivastava is legally and validly authorized to pursue the plaint on behalf of plaintiff It is reiterated that all the three defendants i.e. defendants no. 1 to 3 are independent from each other and have different CIN, PAN, GST etc. and are carrying on business from different places and hence there is no privity of contract between plaintiff and defendants no. 1 to 3. It is further denied that defendants no. 4 to 6 approached plaintiff, on behalf of defendants no. 1 to 3, or that they represented that they wanted to avail the services of plaintiff for transportation of goods/material from Chennai to different locations. It is also denied that CS (COMM) No. 2260/2022 & COUNTER CLAIMS NO.9/23, 10/23 and 11/23 Page no. 8 of 46 Digitally signed ILLA by ILLA RAWAT Date:
RAWAT 2025.05.27 16:45:37 +0530 defendants no. 2 & 3 are sister concerns of defendant no.1 or that they are owned and controlled by defendant no.1 or that defendants no. 4 to 6 are responsible for the conduct of business of defendants no.2&3. Rest of the averments made in plaint have also been controverted on merits and it is prayed that the suit filed by plaintiff be dismissed.
17. Although defendant no.2&3 have filed their separate written statements, the grounds taken therein are identical to those taken by defendants no.1, 4 to 6 in their written statement and hence contents thereof have not been summarised separately herein.
18. The plaintiff filed joint replication to Written Statements filed by defendants no. 1,5&6, defendant no. 2 and defendant no. 3. It is denied that the invoices relied upon plaintiff are forged and fabricated. It is stated that after the start of GST regime, the software which was used was such that older invoices, if extracted, would be in such format only and hence there was mention of GST on invoices prior to 01.07.2017. No GST was charged by plaintiff from defendants on invoices prior to enforcement of GST regime. It is also denied that defendants no. 4 to 6 are neither necessary nor proper parties or that the suit of plaintiff is barred by limitation or that defendants no. 1 to 3 have no connection with each other. All the averments made in the plaint have been reiterated.
COUNTER CLAIM NO.11/2319. The defendant no.1/Goyal Impex and Industries Ltd.
CS (COMM) No. 2260/2022 & COUNTER CLAIMS NO.9/23, 10/23 and 11/23 Page no. 9 of 46 Digitally signed by ILLA RAWAT ILLA Date:
RAWAT 2025.05.27 16:45:46 +0530 has filed a counter claim against plaintiff/ M/s North Eastern Carrying Corporation Ltd. (defendant/respondent in counter claim) wherein it is averred that counter claimant is engaged in business of import and trading of Polyester knitted fabric, aluminium foil, polyester yarn and miscellaneous trading items from various countries. It is duly registered with GST department and is having IEC License and PAN number which are separate and distinct from M/s Do Best Infoway and HGL Trading who have been impleaded as defendants no.2 and 3 in the main suit.
20. It is further averred that upon assurances from the respondent/defendant, who is having its corporate office at 9062/47, Ram Bagh Road, Azad Market, Delhi-110006, about quality of its services, counter claimant placed order for transportation of its goods from Chennai to Ludhiana, on many occasions, from August 2016 to December 2016. The respondent/defendant, however, failed to provide services as assured by it. The goods imported by counter claimant used to arrive at Chennai and upon receiving information from CHA/Tripadam Logistics Pvt. Ltd. regarding their arrival as well as clearance from custom, counter claimant used to place order for their transportation with respondent/defendant. The respondent/defendant was under obligation to pick up goods from Chennai within a day or two of closing of order of transportation from counter claimant as any delay in picking up of goods would have resulted in levy of demurrage and retention charges thereupon. Though respondent/defendant was aware of practice followed in respect of goods imported by parties and requirement of custom, on many occasions, respondent/defendant CS (COMM) No. 2260/2022 & COUNTER CLAIMS NO.9/23, 10/23 and 11/23 Page no. 10 of 46 Digitally signed ILLA by ILLA RAWAT Date:
RAWAT 2025.05.27 16:45:54 +0530 failed to arrange for vehicle for transport for considerable period which extended to two months. The counter claimant was thus forced to make alternate transportation arrangement at last minute at extra cost and/or to suffer demurrage/detention charges for delay in picking up goods due to which it suffered heavy losses. The counter claimant has filed its ledger account statements, copies of invoices raised upon it by third parties and payments made by it to said parties and claim that it had suffered losses to the tune of Rs.18,84,007/- as detailed in para 4 of the counter claim. Despite repeated requests by counter claimant, respondent/defendant failed to pay the said amount and hence a decree in sum of Rs.18,84,007/- alongwith interest @ 18% per annum thereupon till realization has been prayed for by the counter claimant.COUNTER CLAIM NO.10/23
21. The defendant no.2/HLG Trading has filed a separate counter claim wherein it is averred that counter claimant is engaged in business of import and trading of Polyester knitted fabric, aluminium foil, polyester yarn and miscellaneous trading items from various countries. It is duly registered with GST department and is having IEC License and PAN number which are separate and distinct from M/s Goyal Impex and Industries and HGL Trading who have been impleaded as defendants no.1 and 3 in the main suit.
22. It is further averred that upon assurances from the respondent/defendant, who is having its corporate office at CS (COMM) No. 2260/2022 & COUNTER CLAIMS NO.9/23, 10/23 and 11/23 Page no. 11 of 46 Digitally signed by ILLA ILLA RAWAT Date:
RAWAT 2025.05.27 16:46:01 +0530 9062/47, Ram Bagh Road, Azad Market, Delhi-110006, about quality of its services, counter claimant placed order for transportation of its goods from Chennai to Ludhiana, on many occasions, from August 2016 to December 2016. The respondent/defendant, however, failed to provide services as assured by it. The goods imported by counter claimant used to arrive at Chennai and upon receiving information from CHA/Tripadam Logistics Pvt. Ltd. regarding their arrival as well as clearance from custom, counter claimant used to place order for their transportation with respondent/defendant. The respondent/defendant was under obligation to pick up goods from Chennai within a day or two of closing of order of transportation from counter claimant as any delay in picking up of goods would have resulted in levy of demurrage and retention charges thereupon. Though respondent/defendant was aware of practice followed in respect of goods imported by parties and requirement of custom, on many occasions respondent/defendant failed to arrange for vehicle for transport for considerable period which even extended to two months. The counter claimant was thus forced to make alternate transportation arrangement at last minute at extra cost and/or to suffer demurrage/detention charges for delay in picking up goods due to which it suffered heavy losses. The counter claimant has filed its ledger account statements, copies of invoices raised upon it by third parties and payments made by it to said parties and claim that it had suffered losses to the tune of Rs.7,79,438/- as detailed in para 3 of the counter claim. Despite repeated requests by counter claimant, respondent/defendant failed to pay the said amount and hence a CS (COMM) No. 2260/2022 & COUNTER CLAIMS NO.9/23, 10/23 and 11/23 Page no. 12 of 46 Digitally signed ILLA by ILLA RAWAT Date:
RAWAT 2025.05.27 16:46:08 +0530 decree in sum of Rs.7,79,438/- alongwith interest @ 18% per annum thereupon till realization has been prayed for by the counter claimant.COUNTER CLAIM NO.9/23
23. The defendant no.3/Do Best Infoway has filed a separate counter claim wherein it is averred that counter claimant is merely a brand name and not a separate legal entity. It is engaged in business of import and trading of Polyester knitted fabric, aluminium foil, polyester yarn and miscellaneous trading items from various countries. It is duly registered with GST department and is having IEC License and PAN number which are separate and distinct from M/s Goyal Impex and Industries and HLG Trading who have been impleaded as defendants no.1 and 2 in the main suit.
24. It is further averred that upon assurances from the respondent/defendant, who is having its corporate office at 9062/47, Ram Bagh Road, Azad Market, Delhi-110006, about quality of its services, counter claimant placed order for transportation of its goods from Chennai to Ludhiana, on many occasions, from August 2016 to December 2016. The respondent/defendant, however, failed to provide services as assured by it. The goods imported by counter claimant used to arrive at Chennai and upon receiving information from CHA/Tripadam Logistics Pvt. Ltd. regarding their arrival as well as clearance from custom, counter claimant used to place order for their transportation with respondent/defendant. The CS (COMM) No. 2260/2022 & COUNTER CLAIMS NO.9/23, 10/23 and 11/23 Page no. 13 of 46 Digitally signed by ILLA ILLA RAWAT Date: RAWAT 2025.05.27 16:46:17 +0530 respondent/defendant was under obligation to pick up goods from Chennai within a day or two of closing of order of transportation from counter claimant as any delay in picking up of goods would have resulted in levy of demurrage and retention charges thereupon. Though respondent/defendant was aware of practice followed in respect of goods imported by parties and requirement of custom, on many occasions respondent/defendant failed to arrange for vehicle for transport for considerable period which even extended to two months. The counter claimant was thus forced to make alternate transportation arrangement at last minute at extra cost and/or to suffer demurrage/detention charges for delay in picking up goods due to which it suffered heavy losses. The counter claimant has filed its ledger account statements, copies of invoices raised upon it by third parties and payments made by it to said parties and claim that it had suffered losses to the tune of Rs.2,85,602/- as detailed in para 3 of the counter claim. Despite repeated requests by counter claimant, respondent/defendant failed to pay the said amount and hence a decree in sum of Rs.2,85,602/- alongwith interest @ 18% per annum thereupon till realization has been prayed for by the counter claimant.
25. The opportunity of plaintiff to file response/written statements to counter claims was closed vide order dated 26.02.2024 since counter claimant/plaintiff failed to file the same within stipulated period of 120 days from the date of accepting notice of the counter claim. Though plaintiff challenged the order dated 26.02.2024 before Hon'ble High Court of Delhi, the CS (COMM) No. 2260/2022 & COUNTER CLAIMS NO.9/23, 10/23 and 11/23 Page no. 14 of 46 Digitally signed by ILLA ILLA RAWAT Date:
RAWAT 2025.05.27 16:46:23 +0530 plaintiff was not successful in getting the order dated 26.02.2024 set aside and the petition filed by respondent/defendant was dismissed by Hon'ble High Court vide order dated 02.07.2024. No issues were thus framed in respect of the counter claims filed by defendants no.1 to 3.
26. The plaintiff as well as defendants filed their respective admission/denial on affidavits in the main suit.
27. From the pleadings of parties, following issues were framed in the main suit:-
1) Whether the suit of plaintiff is bad for joinder of defendants no. 4 to 6 as parties to the suit? (OPD)
2) Whether the suit of plaintiff is barred by limitation?
(OPD)
3) Whether the suit of plaintiff is bad for joinder of defendants no. 1, 2 and 3 as parties to a single suit? (OPD)
4) Whether the plaint has been signed and verified and suit filed through duly authorized person? (OPP)
5) Whether the plaintiff is entitled to decree for recovery of Rs. 7,62,124/- against the defendant no.1, as prayed for? (OPP)
6) Whether the plaintiff is entitled to decree for Rs.
81,265/- against the defendants no. 2, as prayed for? (OPP)
7) Whether the plaintiff is entitled to decree for Rs.1,34,019/- against the defendants no. 3, as prayed for? (OPP) CS (COMM) No. 2260/2022 & COUNTER CLAIMS NO.9/23, 10/23 and 11/23 Page no. 15 of 46 Digitally signed ILLA by ILLA RAWAT Date:
RAWAT 2025.05.27 16:46:32 +0530
8) Whether plaintiff is entitled to interest. If so, at what rate and for which period? (OPP)
9) Relief.
28. In order to prove its case, plaintiff has examined its AR/Sh. R.M.Srivastava, as PW1. He has reiterated the facts averred in the plaint in his affidavit, Ex.PW-1/A, and relied upon following documents:-
S.No. Details of documents Exhibit 1. Board Resolution Ex.PW1/1
2. Printout of invoices/freight bills issued to Ex.PW1/2 defendant no. 1 (colly)
3. Printout of invoices issued to defendant no. 2 on Ex.PW1/3 behest of defendant no. 1 (colly)
4. Printout of invoices issued to defendant no. 3 on Ex.PW1/4 behest of defendant no. 1 (colly)
5. Printout of ledger account of defendant no. 1 Ex.PW1/5
6. Printout of ledger account of defendant no. 2 Ex.PW1/6
7. Printout of ledger account of defendant no. 3 Ex.PW1/7
8. Certificate U/s 65-B Ex.PW1/8
9. Photocopy of legal notice dated 19.08.2019 Ex.PW-1/9 alongwith original postal receipts (colly)
10. Non-Starter Report issued by the Central District Ex. PW-1/10 Legal Authority dated 19.01.2021
29. During his cross-examination, PW1 deposed that he had joined plaintiff company as Law Officer in the year 2009 and was continuing to work at said post. He used to take care of legal matters on behalf of company which included follow up of legal matters etc. He was not a member of Board of Director of the company and did not participate in the board meetings of the company. Original minutes book of the company were not produced by him. The PW1 admitted that Board Resolution Ex.
CS (COMM) No. 2260/2022 & COUNTER CLAIMS NO.9/23, 10/23 and 11/23 Page no. 16 of 46 Digitally signed by ILLA RAWAT ILLA Date:
RAWAT 2025.05.27 16:46:40 +0530 PW-1/1 did not bear his signatures nor had he participated in the board meeting in which resolution Ex. PW-1/1 was passed. The PW1 denied that no Board Resolution dated 22.05.2020 was passed or that no such meeting was held on 22.05.2020 or that the resolution Ex. PW-1/1 was forged and fabricated.
The PW1 was unable to recall the period of the alleged transactions which were subject matter of the present suit. After refreshing his memory from Court record, with the permission of Court, PW1 deposed that they pertained to year 2016.
30. The PW1 affirmed that communications with defendants, for years 2017 and 2018, had not been placed on record by plaintiff. The PW1 also admitted that he had no personal knowledge regarding the said transactions about which he had deposed in para 3 to 9 of his affidavit Ex.PW1/A. He volunteered to state that his deposition was based on record of the company.
31. During his further cross-examination, PW1 admitted that invoices which were part of Ex. PW-1/2(colly), Ex. PW-1/3(colly) and Ex. PW-1/4(colly), did not bear signatures of respective defendants/employees of defendants. He was not aware if the original invoices/copy of invoices, which are part of Ex. PW-1/2(colly), Ex. PW-1/3(colly) and Ex. PW-1/4(colly), were dispatched to respective defendants or not.
32. When asked to specify the date on which printout of invoices, which are part of Ex. PW-1/2(colly), Ex. PW-1/3(colly) CS (COMM) No. 2260/2022 & COUNTER CLAIMS NO.9/23, 10/23 and 11/23 Page no. 17 of 46 Digitally signed ILLA by ILLA RAWAT Date:
RAWAT 2025.05.27 16:46:46 +0530 and Ex. PW-1/4(colly), were taken, the PW1 expressed his inability to do so but clarified that it was prior to filing of the present suit. He admitted that said invoices were blank at the space provided for 'prepared by' and 'checked by' and that they did not bear his signatures. The PW1 further admitted that GST came into being in the year 2017 and that invoices, which were part of Ex.PW-1/2 (colly), Ex.PW-1/3 (colly) and Ex.PW-1/4 (colly), had GST number of plaintiff as well as IGST and GST percentage of "0%" mentioned thereupon. He volunteered to state that after updation of the software of the company as and when printout of the old bills was taken, it found mention of the GST number of plaintiff as well as IGST and GST percentage of "0%". He admitted that there was no averment in the plaint in this regard.
33. During his further cross-examination, PW1 admitted that none of the freight bills (consignment notes), which are part of Ex. PW-1/2(colly), bore signatures of any of the defendants nor were they supported with any dispatch proof.
When asked to specify the date on which printout of ledger accounts, which are Ex. PW-1/5, Ex. PW-1/6 and Ex. PW-1/7, were taken, the PW1 expressed his inability to do so but clarified that it was prior to filing of the present suit.
34. The PW1 admitted that Ex. PW-1/5, Ex. PW-1/6 and Ex. PW-1/7, did not bear signatures of any of the defendants nor were they supported with any dispatch proof. He further admitted that except bill numbers and some payments and TDS entries, no other details were mentioned under the head 'particulars' in CS (COMM) No. 2260/2022 & COUNTER CLAIMS NO.9/23, 10/23 and 11/23 Page no. 18 of 46 Digitally signed ILLA by ILLA RAWAT Date:
RAWAT 2025.05.27 16:46:54 +0530 Ex.PW-1/5, Ex. PW-1/6 and Ex. PW-1/7.
35. During his further cross-examination, PW1 admitted that defendant no.1 is a Limited Company. He further deposed that Defendant no.2 and 3 were sister concerns of defendant no.1 but was not aware if they were partnership firm or proprietorship concerns.
The PW1 admitted that no document had been placed on record to prove that defendants no.2 and 3 were sister concerns of defendant no.1. He admitted that defendants no.1 to 3 had separate PAN numbers and that they were separate legal entities and that alleged transactions with defendants no. 1 to 3 were separate from each other. He volunteered to state that the persons who were dealing on behalf of defendants no. 1 to 3 with plaintiff company were same and that the invoices were prepared as desired by them.
When asked to specify the names of the persons who were dealing on behalf of defendants no. 1 to 3 with the plaintiff company, the PW1 was unable to recall their names. The PW1 admitted that there was no averment in the plaint and his affidavit Ex. PW-1/A that there were same persons dealing on behalf of defendants no. 1 to 3 with plaintiff company. He denied that at no point of time there were any persons dealing jointly on behalf of defendants no. 1 to 3.
36. During his further cross-examination, PW1 admitted that plaintiff was maintaining separate ledger accounts of defendants no. 1,2&3 and that the alleged amount recoverable from each of the defendants no.1,2&3 was specified separately in CS (COMM) No. 2260/2022 & COUNTER CLAIMS NO.9/23, 10/23 and 11/23 Page no. 19 of 46 Digitally signed ILLA by ILLA RAWAT Date:
RAWAT 2025.05.27 16:47:01 +0530 the plaint. He further admitted that the alleged amount recoverable from defendants no. 2 and 3, was less than Rs.3,00,000/-. He denied that the alleged claim against defendants no. 2&3 had been clubbed with that of defendant no.1 only to make out pecuniary jurisdiction of this Court.
In the first instance, the PW1 was unable to admit or deny that supply of alleged goods was made from Chennai to Ludhiana, however, after refreshing his memory from the Court record he affirmed it to be correct. The PW1 admitted that he was unable to state what payment was made by each of defendants against each of the alleged transactions. He had no knowledge of delay, if any, and/or failure, if any, in each of the alleged transactions. He volunteered to state that no communication was received by the plaintiff company from any of the defendants no. 1 to 3, regarding failure and/or delay in delivery. The PW1 denied that plaintiff company had not filed entire record pertaining to alleged transactions with defendants no. 1 to 3, on Court record. The name of owners/directors of defendants no. 2 & 3 were not mentioned in the memo of parties appended to plaint.
37. The PW1 admitted that he never had any personal interaction with any of the defendants no. 1 to 3. He also admitted that ledger statement of the plaintiff company was maintained in accordance with the bills issued to defendants from time to time. The ledger statements placed on record were not audited by any Auditor of the plaintiff company. He clarified that he lacked knowledge if audited statement of account was required to be filed on Court record or not. He deposed that CS (COMM) No. 2260/2022 & COUNTER CLAIMS NO.9/23, 10/23 and 11/23 Page no. 20 of 46 Digitally signed ILLA by ILLA RAWAT Date:
RAWAT 2025.05.27 16:47:09 +0530 company had a Chartered Accountant. He admitted that the ledger accounts placed on record were not certified by Chartered Accountant. He further deposed that the plaintiff company did not have any transaction with defendants no. 4 to 6, in individual capacity.
The PW1 denied that Ex. PW-1/5 to Ex. PW-1/7 were forged and fabricated.
38. During his further cross-examination, PW1 deposed that Sh. Jitender Kumar Pandey looked after credit control of the plaintiff company. The affidavit U/s 65-B i.e. Ex. PW-1/8 had been issued by him. Sh. Jitender Kumar Pandey pursued the recovery of outstanding amount from the clients of plaintiff company and was not involved in alleged transactions with defendants no.1 to 3. He further deposed that Sh. Jitender Kumar Pandey had been employed with plaintiff company since last three years only. He admitted that he was unable to give details of the model of the computer and the printer from which the printouts of Ex. PW-1/2 (colly) to Ex. PW-1/7 were taken. The data was available on the server of the company and printout could be taken from any computer of the company. He was unable to give details of the server of the company or the printer from which printouts were taken for present case. He admitted that no purchase order and/or mail related to alleged transactions for which invoices Ex. PW-1/2(colly) to Ex. PW-1/4 (colly) were issued, had been placed on record.
39. During his further cross-examination, PW1 denied CS (COMM) No. 2260/2022 & COUNTER CLAIMS NO.9/23, 10/23 and 11/23 Page no. 21 of 46 Digitally signed ILLA by ILLA RAWAT Date:
RAWAT 2025.05.27 16:47:16 +0530 that he was not a duly authorized person of plaintiff company. He was aware that defendants no. 1 to 3 had filed counter-claims against the plaintiff company. He denied that the claim of the plaintiff company was barred by limitation or that defendants no. 1 to 3 did not have any dues payable to plaintiff company or that defendants were entitled to claim damages from plaintiff company for deficiency in service. He was not aware if there was any written agreement between the plaintiff company and defendants no. 1to3 with respect to price and/or interest payable on delayed payment. He denied that Court at Delhi did not have territorial jurisdiction to entertain suit of the plaintiff. He had no knowledge regarding third party service availed of by defendants no. 1to3. He denied that defendants no.2&3 were not the sister concerns of defendant no.1 or that they were separate and independent legal entities from defendant no.1 and each other.
He further denied that defendants no. 4 (since deceased), 5 & 6 were neither proper nor necessary parties or that defendant no. 1 was neither a Private Ltd. company nor was it engaged in manufacturing business of gums, spices and seasonings. He admitted that the record filed by the plaintiff company i.e. the invoices and ledger statements etc., had not been authored by him. He denied that no legal notice was ever tendered or served upon defendants no.1to3 or that contents of Ex. PW-1/2(colly) to Ex. PW-1/7 were incorrect.
40. No other witness was examined on behalf of plaintiff.
41. On 30.08.2024, counsels for parties requested that CS (COMM) No. 2260/2022 & COUNTER CLAIMS NO.9/23, 10/23 and 11/23 Page no. 22 of 46 Digitally signed by ILLA ILLA RAWAT Date:
RAWAT 2025.05.27
16:47:23
+0530
main suit bearing CS (COMM) No. 2260/22 as well as counter claims no.9/23, 10/23 and 11/23 be consolidated and they be permitted to lead common evidence. Since the statement of PW1/Sh.R.M. Srivastava had already been recorded in the main suit, it was directed that same would be read qua the counter claims as well. Although counter claimant had filed affidavit of CW1/Sh. Gagan Goyal in counter claims no.9/23 and 10/23 and affidavit of CW1/Sh.Hira Lal Goyal in counter claim no.11/23, the same was permitted to be withdrawn with liberty to defendants to file their affidavits, as defence witnesses, in main suit i.e. CS (COMM) No.2260/22. Subsequently, however, defendant closed its evidence in CS (COMM) No.2260/22 without examining any witness and made a request that the opportunity for DE be closed as defendants did not wish to lead any evidence in defence in the main suit. Simultaneous an application U/s 151 CPC was filed on behalf of counter claimants for de-consolidation of counter claims with the main suit.
42. In the application U/s 151 CPC, counter claimants have averred that they would be relying upon pleadings as well as documents as well as testimony of PW1 in the main suit. They do not wish to lead evidence in the main suit and hence would not be filing consolidated/ separate evidence affidavits of defense witnesses in the said suit. Accordingly, they prayed that main suit CS (COMM) No.2260/22 be de-consolidated with the counter claims and the counter claimants be permitted to lead their evidence in respective counter claims.
43. No reply was filed on behalf of plaintiff to CS (COMM) No. 2260/2022 & COUNTER CLAIMS NO.9/23, 10/23 and 11/23 Page no. 23 of 46 Digitally signed ILLA by ILLA RAWAT Date:
RAWAT 2025.05.27 16:47:29 +0530 application U/s 151 CPC filed on behalf of counter claimants, however, oral arguments were addressed.
44. It is noteworthy that the Hon'ble High Court in case of Aditya Birla Fashion and Retail Limited vs. Mrs. Saroj Tandon, CM (M) 459/2023 & CM APPL. 13679/2023, decided on 02.09.2024, has held as under :-
"57. In view of above said discussion, it clearly emerges out that process of pre-institution mediation is mandatory for every suit involving a commercial suit and no distinction can be drawn when it comes to a counter- claim involving a commercial dispute and not contemplating any urgent relief. As per the mandate of Patil Automation Private Ltd. (supra), any such suit, which has been filed without taking recourse of Section 12-A of Commercial Courts Act, needs to be rejected under Order VII Rule 11 CPC."
It was, however, clarified that as declared in case of Patil Automation Private Ltd. v. Rakheja Engineers Private Limited : 2022 SCC OnLine SC 1028, the cut-off date would be 20th August, 2022.
45. In the instant case, the defendants no.1 to 3 have filed their counter claims on 20.02.2023, which is, much beyond the cut-off date of 20.08.2022 without taking recourse of Section 12A of the Commercial Courts Act, 2015 (hereinafter referred to as CC Act, 2015). Counsel for defendant/counter claimants has not filed any judgment wherein the above cited judgment has been set aside or a different view has been propounded. Accordingly, the counter claims filed by Goyal Impex and Industries Ltd/defendant no.1, HLG Trading/defendant no.2 and Do Best Infoway/defendant no.3 are not maintainable for want of CS (COMM) No. 2260/2022 & COUNTER CLAIMS NO.9/23, 10/23 and 11/23 Page no. 24 of 46 Digitally signed ILLA by ILLA RAWAT Date:
RAWAT 2025.05.27 16:47:35 +0530 compliance with mandatory provision of Section 12A of CC Act, 2015. Since the counter claims themselves are not maintainable, the applications U/s 151 CPC, filed on behalf of counter claimants, in each counter claim, are not maintainable and are hence dismissed alongwith the respective counter claims.
FINDINGS IN MAIN SUIT :-
46. As already observed in foregoing paragraphs, the defendants did not examine any witness in support of defence taken by them and opportunity for DE was closed on 13.01.2025 upon request/submissions made by counsel for defendants.
47. Arguments were addressed by Sh. Anand Prakash Dubey, Counsel for the plaintiff and Sh. Vikas Kakkar and Sh.Dalip Kumar Rana, counsels for defendants no.1 to 3, 5 and 6. Written submissions were also filed on behalf of defendants.
48. Counsel for plaintiff has argued on the lines of averments made in the plaint as well as evidence produced on record by the plaintiff. It is contended that plaintiff was approached by defendants no.4 to 6 for business purposes. The defendants no.4 to 6 assured plaintiff that they were involved in day to day dealings of defendants no.1 to 3 and that defendants no.2 and 3 are sister concerns of defendant no.1. Referring to ledger account of defendant no.1, at pages 2 to 5 of list of documents filed with the written statement of defendants no.1, 4 to 6, it is contended that the same reflects that several payments have been made on behalf of defendant no.2 by defendant no.1 CS (COMM) No. 2260/2022 & COUNTER CLAIMS NO.9/23, 10/23 and 11/23 Page no. 25 of 46 Digitally signed ILLA by ILLA RAWAT Date:
RAWAT 2025.05.27 16:47:41 +0530 and hence a conclusion can be drawn that defendant no.2 and 3 are sister concerns of defendant no.1. It is contended that no plausible defense has been put forth by defendants and hence the plaintiff is entitled to suit amount as prayed for.
49. It is further contended that though defendants have taken a plea that services rendered by plaintiff was not upto the mark, at no point of time, any communication and/or email was sent by defendants, to the plaintiff, that there was deficiency in the services provided by the plaintiff or that defendants had incurred additional expenses in hiring services of another agency for transportation of their goods/material and hence this plea, taken on behalf of defendants no.1 to 3, is not maintainable.
50. Per contra, counsel for defendants has contended that there is no concept of sister concerns under the Company Law. The defendant no.1 is not in the business of manufacturing gums, spices and seasonings but is in business of import and trading of Polyester knitted fabric, aluminium foil, polyester yarn and miscelleneous trading items from various countries. The fact that defendants no.1 to 3 are separate legal entities and that there is no relationship and/or joint business of defendants no.1 to 3 is amply clear from the fact that plaintiff has raised separate invoices against defendants no.1, 2 and 3. Even the details of said invoices are given separately by the plaintiff in the plaint. It is apparent from perusal of the invoices/figures, mentioned in the plaint, that value of amount alleged to be outstanding against defendants no.2 and 3 is less than Rs.3 lakh each and that plaintiff has clubbed together its claim against defendants no.1, 2 CS (COMM) No. 2260/2022 & COUNTER CLAIMS NO.9/23, 10/23 and 11/23 Page no. 26 of 46 Digitally signed ILLA by ILLA RAWAT Date:
RAWAT 2025.05.27 16:47:47 +0530 and 3 to somehow make out the jurisdiction of this Court. This conclusion is also fortified from averments made in para 7 of the plaint as plaintiff has given separate sum of money, which it claims is recoverable, from defendants no.1 to 3.
51. It is further contended that averments made in the plaint qua visits and demands made from defendants no.1 to 3 are also vague and do not stand justified.
52. It is then contended that suit of plaintiff is barred by limitation for plaintiff filed its suit in April, 2022 whereas all the bills relied upon by the plaintiff pertain to October-November, 2016. Last payment from defendant no.1 is stated to have been received on 05.05.2017 and hence the suit if plaintiff is barred by limitation. Contention that legal notice would give fresh lease of limitation for filing of suit to plaintiff is not sustainable.
53. It is then contended that plaintiff has failed to produce the copies of relevant documents like memorandum and article of association of plaintiff company, copies of alleged orders for transportation of goods, given by defendants no.1 to 3 without sufficient explanation for it. Since plaintiff has failed to place on record its Articles of Associations and Memorandum of Association it has failed to prove that it has office at Delhi or that Court at Delhi has jurisdiction to entertain the suit filed by plaintiff. No cause of action in the instant case had arisen within the jurisdiction of this Court and hence the suit of plaintiff is even otherwise barred on account of want of territorial CS (COMM) No. 2260/2022 & COUNTER CLAIMS NO.9/23, 10/23 and 11/23 Page no. 27 of 46 Digitally signed by ILLA RAWAT ILLA Date:
RAWAT 2025.05.27 16:47:54 +0530 jurisdiction.
54. As regards defendant no.4 (since deceased), 5 and 6, it is stated that they are merely the directors of defendant no.1 and have no personal liability. The fact that plaintiff failed to implead LRs of deceased defendant no.4 as parties to the suit only reaffirms this contention.
55. The authority of PW1/Sh.R.M. Srivastava to file the suit and to appear to depose on behalf of plaintiff is also disputed. It is stated that plaintiff failed to produce the original Minutes Book. The PW1/Sh.R.M. Srivastava otherwise had neither participated in the meeting wherein Resolution authorizing him was passed nor was signatory thereto and hence could not have proved Resolution Ex.PW1/1. Even otherwise, it is contended that PW1 has admitted that he does not have any personal knowledge regarding the transactions between the plaintiff and defendants and hence could not have deposed regarding the same. The printouts of the documents were neither taken out by him nor were they printed in his presence and hence the said printouts do not stand proved in accordance with law. The judgment in case of Anwar P.V. vs. P.K. Bhasheer, AIR 2015 SC 180 has been relied upon in support of this contentions.
56. It is then contended that no communication was exchanged between plaintiff and defendant between 2017 and 2018. The printouts of all the documents were obtained in the year 2022 and were not obtained in real time. There is mention of CS (COMM) No. 2260/2022 & COUNTER CLAIMS NO.9/23, 10/23 and 11/23 Page no. 28 of 46 Digitally signed ILLA by ILLA RAWAT Date:
RAWAT 2025.05.27 16:48:00 +0530 GST on the bills even though GST system of taxation came into force w.e.f. 01.07.2017, hence the invoices placed on record cannot be relied upon being forged and fabricated. Only other document relied upon by plaintiff is the ledger account statement which as per Section 34 of the Indian Evidence Act are not by itself sufficient to prove the plaintiff's claim against the defendants. It is accordingly prayed that suit filed by plaintiff be dismissed.
57. In rebuttal, counsel for plaintiff has contended that after GST regime came to be in force, the plaintiff had upgraded its software and as and when print out of old bills/invoices i.e. those prior to 01.07.2017 is taken there is a column of GST on the bill/invoice even though the amount deducted towards GST is shown to be "0". This is an issue which most of the business entities maintaining digital record are facing and it cannot be concluded merely by such a entry/column on bills/invoices that the same are forged and fabricated.
58. I have heard the learned Counsels for the parties and have also perused the record as well as written submissions and judgment filed on behalf of defendants and my findings on aforesaid issues are as under:-
ISSUE NO.1 Whether the suit of plaintiff is bad for joinder of defendants no.4 to 6 are parties to the suit? (OPD)
59. Onus of proving this issue was on defendants.
CS (COMM) No. 2260/2022 & COUNTER CLAIMS NO.9/23, 10/23 and 11/23 Page no. 29 of 46 Digitally signed by ILLA RAWAT ILLA Date: RAWAT 2025.05.27 16:48:06 +0530
Admittedly, defendants no.4 (since deceased), 5 and 6 are the directors of defendant no.1. The defendant no.4 was reported to have expired on 12.03.2023 and as no steps were taken by plaintiff to bring on record LRs of defendant no.4, the suit of plaintiff stands abated against defendant no.4.
60. Coming to defendants no.5 and 6 who are stated to be directors of defendant no.1, the law with regard to relationship between director and company and liability of director for payment of dues of a company is very clear. A company is a separate legal entity. A director in a company may be required to discharge particular function on behalf of the company but there is no universal rule that a director of a company is incharge of its everyday affairs. Depending on the facts and circumstances of the case and the nature of transactions between the parties, doctrine of "lifting of corporate veil" may be available to plaintiff, where it is permitted, by the statute or corporate structure.
61. The position with regard to lifting of corporate veil has been succinctly laid down by Hon'ble Supreme Court in case of Life Insurance Corporation Vs. Escorts Limited & Ors. (1986) 1 SCC 264 wherein it was observed:-
"90.... Generally and broadly speaking, we may say that the corporate veil may be lifted where a statute itself contemplates lifting the veil, or fraud or improper conduct is intended to be prevented, or a taxing statute or a beneficent statute is sought to be evaded or where associated companies are inextricably connected as to be, in reality, part of one concern. It is neither necessary nor desirable to enumerate the classes of cases where lifting the veil is permissible, since that must necessarily depend on the relevant statutory or other provisions, the object sought CS (COMM) No. 2260/2022 & COUNTER CLAIMS NO.9/23, 10/23 and 11/23 Page no. 30 of 46 Digitally signed ILLA by ILLA RAWAT Date:
RAWAT 2025.05.27 16:48:13 +0530 to be achieved, the impugned conduct, the involvement of the element of the public interest, the effect on parties who may be affected etc."
62. In case of Mukesh Hans & Another vs. Smt. Usha Bhasin & Ors. 2010 SCC OnLine Del 2776 , it was held that Directors are not personally liable for the acts of the Company and owe no contractual duty qua a third party. There are only two exceptions to this Rule viz. (a) if there is a personal guarantee, indemnity etc. and (b) if Director induces third party to act to his detriment by advancing loan to the Company and third party proves fraudulent misrepresentation.
63. Further in case of Balwant Rai Saluja vs. Air India Ltd. (2014) 9 SCC 407, it was held that :-
"71. Thus, on relying upon the aforesaid decisions, the doctrine of piercing the veil allows the Court to disregard the separate legal personality of a company and impose liability upon the persons exercising real control over the said company. However, this principle has been and should be applied in a restrictive manner, that is, only in scenarios wherein it is evident that the company was a mere camouflage or sham deliberately created by the persons exercising control over the said company for the purpose of avoiding liability. The intent of piercing the veil must be such that would seek to remedy a wrong done by the persons controlling the company. The application would thus depend upon the peculiar facts and circumstances of each case."
64. Further in case of Faith Mercantile Pvt. Ltd. vs. Simbhaoli Sugars Ltd. & Ors (supra), it was observed that :-
" 9. Hence, the directors of the company are agents, trustees or representatives of the company. Under Section 230 of the Indian Contract Act, unless an agent personally binds himself, an agent is not personally liable for the contracts entered by him on behalf of his principal. Similarly, personal liability of a director would only arise where he makes a false averment regarding the company CS (COMM) No. 2260/2022 & COUNTER CLAIMS NO.9/23, 10/23 and 11/23 Page no. 31 of 46 Digitally signed ILLA by ILLA RAWAT Date:
RAWAT 2025.05.27 16:48:21 +0530 and induces a third party to advance a loan/money to the company. It is only on proof of fraudulent misrepresentation that a director may be personally liable to a third party. In that case, there would not be a liability under the contract but it would be an action in tort."
65. It is to be borne in mind that doctrine of lifting of corporate veil is not available in every case of alleged liability against the company. It is only available in restricted cases and limited circumstances where it is permissible to do so under a statute or where the corporate structure has been instituted to perpetuated a fraud or is a camouflage, facade or sham to avoid liability or in case where effect has to be given to a beneficial legislation as has been held in the case of Sanuj Bathla & Anr. vs. Manu Maheshwari & Anr., C.R.P. 166/2018 & CM APPL.3237/2018 & 10441/2021 decided on 12 April, 2021 by Delhi High Court.
66. In order to lift the corporate veil, the averments in plaint are required to be examined at length to see the nature of allegations against the defendants no.5 to 6. From perusal of plaint, it is seen that there is no averment in the plaint that defendants no.5 to 6 had committed any kind of fraud upon plaintiff when they availed the services of the plaintiff on behalf of defendant no.1 to 3. Further it is not clear how defendants no.5 to 6 could have acted on behalf of defendants no.2 and 3 when nothing has been placed on record from which it can be ascertained that defendants no.5 and 6 were otherwise in any way connected with defendants no.2 and 3 in any capacity.
67. It is noteworthy that defendants have taken a CS (COMM) No. 2260/2022 & COUNTER CLAIMS NO.9/23, 10/23 and 11/23 Page no. 32 of 46 Digitally signed ILLA by ILLA RAWAT Date:
RAWAT 2025.05.27 16:48:28 +0530 specific objection in their written statements that defendants no.5 and 6 have been wrongly impleaded as parties to the suit and that they have no personal liability towards services availed of by defendant no.1 and are even otherwise not connected to functioning of defendants no.2 and 3.
Though a replication was filed on behalf of plaintiff, there is no specific response to this defence taken by defendants no.2 and 3. Even in the replication filed on behalf of plaintiff, it is stated that defendants no.4 to 6 were very much a party to business dealings and that it was pursuant to their personal commitments and inducements that plaintiff had given credit to defendants no.1 to 3. The alleged personal commitments and inducements, if any, by defendants no.4 to 6 could not be proved by plaintiff by leading cogent evidence. In complete contradiction to the pleadings in plaint, the PW1/R.M. Srivastava, during his cross-examination, admitted that plaintiff company did not have any transaction with defendants no.4 to defendant no.6 in their individual capacity.
68. In the facts and circumstances brought out from the averments made in the plaint and evidence adduced on record, the plaintiff cannot be permitted to thrust the alleged liability of defendants no.1 to 3 upon defendants no.5 and 6.
This issue is decided in favour of the defendants and against the plaintiff.
ISSUE No.2:-
Whether the suit of plaintiff is barred by limitation? (OPD)
69. Onus of proving this issue was on defendants. The CS (COMM) No. 2260/2022 & COUNTER CLAIMS NO.9/23, 10/23 and 11/23 Page no. 33 of 46 Digitally signed ILLA by ILLA RAWAT Date:
RAWAT 2025.05.27 16:48:34 +0530 defendants have asserted that every transactions/transportation/ invoice/bill is a separate contract/agreement having no concern with previous or later invoice/bill. The plaintiff has tried to mislead the Court but failed to specify which of the invoices, as detailed in para 5 of the plaint, is due and payable; how it is due and payable i.e. whether any sum of money has been received against a particular invoice and if any amount remains balance, since when the said amount is pending; what services were rendered against each invoice and whether the services rendered by plaintiff were without any delay and/or damage. Thus the suit of plaintiff is barred by limitation.
Per contra, counsel for plaintiff contended that plaintiff was maintaining a mutual running account of each of the defendants no.1, 2 and 3 and that last payment was received from defendant no.1 on 05.05.2017, from defendant no.2 on 11.08.2017 and defendant no.3 on 11.08.2017. Further the plaintiff had got issued a legal notice on 19.08.2019 against defendants and had also spent period from 10.11.2020 to 27.02.2021 in pre-institution mediation proceedings and hence the suit of plaintiff has been filed well within the prescribed period of limitation of three years.
70. After careful perusal of ledger statement, Ex.PW1/3 to Ex.PW1/5, the contention that the same reflect that parties had mutual running account is liable to be rejected. There were no reciprocal demands between the parties. An open account between two or more parties is one which contains items between parties from which balance due to one of them can be ascertained CS (COMM) No. 2260/2022 & COUNTER CLAIMS NO.9/23, 10/23 and 11/23 Page no. 34 of 46 Digitally signed ILLA by ILLA RAWAT Date:
RAWAT 2025.05.27 16:48:41 +0530 to be running, unsettled or unclosed. There must be transactions on each side creating independent obligations on the other for an account to be mutual. Transactions which merely create obligations on one side, those on the other being merely complete or partial discharge of sub obligations, cannot be termed to be mutual.
71. In the present case, plaintiff has failed to prove that there were mutual transactions between the parties. At best, the ledger statements, Ex.PW1/3 to Ex.PW1/5, can be considered as statements of non-mutual running accounts of defendants no.1 to
3. Since the services rendered by plaintiff were that of transportation and carriage of goods, the payment of each invoice issued by plaintiff to recover freight charges would have become due from the date the invoice was raised and the period of limitation available to plaintiff would be three years for each individual invoice, as per Article 113 of the Limitation Act. I am supported in my view by judgments in case of Hindustan Forest Company vs. Lal Chand, AIR (SC) 1349, SKF India Ltd. vs. Banarasi Lal Madan, MANU/MH/0005/2024, Manish Garg vs. East India Udyog Ltd. (2001) 3 AD (Del) 493 and Discover Prints India Pvt. Ltd. vs. Ashu Chemicals RFA No.756/2006 dated 10.01.2012.
72. As per averments made in the plaint and details of invoices of each of defendants no.1 to 3 given in para 5 of the plaint, the plaintiff had raised various invoices upon defendant no.1 between the period from 12.08.2016 to 22.11.2016. The plaintiff further raised invoices from 21.08.2016 to 15.11.2016 CS (COMM) No. 2260/2022 & COUNTER CLAIMS NO.9/23, 10/23 and 11/23 Page no. 35 of 46 Digitally signed ILLA by ILLA RAWAT Date:
RAWAT 2025.05.27 16:48:48 +0530 upon defendant no.2 and 22.09.2016 to 26.10.2016 upon defendant no.3. As contended on behalf of defendants, plaintiff has not specified which of the invoices, as detailed by it in para 5 of the plaint, were due and payable and what amount it had received against each of the said invoices and whether any amount was due and payable against a particular invoice and if so, portion thereof. When the date(s) of issuance of all the invoices, as detailed by plaintiff in para 5 of the plaint, are considered the only conclusion that can be drawn, after perusal thereof, is that plaintiff is not entitled to claim any sum of money qua the said invoices as they all are barred by limitation.
73. The plea taken by counsel for plaintiff that limitation for filing the suit is to be computed from 19.08.2019, the date on which plaintiff got issued a legal notice against defendant, is not sustainable. Counsel for plaintiff has also taken a plea that the plaintiff would be entitled to extension of period of limitation from 15.03.2020 to 28.02.2022 as well as exclusion of period from 10.11.2020 to 27.02.2021 spent by plaintiff in the process of pre-institution mediation proceedings. This contention is also not sustainable as the period of limitation available to plaintiff to prefer claim in respect of each and every invoice, as detailed in para 5 of the plaint, expired before commencement of excluded period which was prescribed in Suo Moto Writ Petition (Civil) of 3/2020. Further since the pre-litigation mediation proceedings were initiated by plaintiff after expiry of the prescribed period of limitation the plaintiff is not entitled to take any benefit of exclusion of period spent by plaintiff in the said proceedings. The plaintiff had filed suit on 26.09.2022, after CS (COMM) No. 2260/2022 & COUNTER CLAIMS NO.9/23, 10/23 and 11/23 Page no. 36 of 46 Digitally signed ILLA by ILLA RAWAT Date:
RAWAT 2025.05.27 16:48:55 +0530 lapse of considerable time when the period of limitation prescribed therefor expired, and hence the suit of plaintiff is hopelessly barred by limitation. This issue is decided against the plaintiff and in favour of the defendants.
ISSUE NO. 3:-
Whether the suit of plaintiff is bad for joinder of defendants no. 1, 2 and 3 as parties to a single suit? (OPD)
74. Onus of proving this issue was on defendant. Admittedly plaintiff has not placed on record any documents to prove that defendants no.2 and 3 are sister concerns of defendant no.1. This fact was also admitted by PW1/Sh. R.M.Srivastava during his cross-examination for it clearly brings out that defendants no.1 to 3 have separate PAN numbers and are separate legal entities and that all the transactions in question, with defendants no.1 to 3, were separate from each other.
75. From averments made in the plaint as well as testimony of PW1, it appears that plaintiff presumed that defendants no.2 and 3 were sister concerns of defendant no.1 on ostensible representation by defendants no.5 and 6 (as stated in plaint) and some persons, who were dealing, on behalf of defendants no.1 to 3 with plaintiff company (as deposed by PW1). It is not clear either from averments made in the plaint or deposition of PW1 what was the nature of alleged representations. The PW1 failed to specify names of alleged persons who represented to plaintiff that defendants no.2 and 3 were sister concerns of defendant no.1. The plaintiff appears to CS (COMM) No. 2260/2022 & COUNTER CLAIMS NO.9/23, 10/23 and 11/23 Page no. 37 of 46 Digitally signed ILLA by ILLA RAWAT Date:
RAWAT 2025.05.27 16:49:01 +0530 have drawn conclusion, that defendants no.2 and 3 are sister concerns of defendant no.1, out of thin air without any cogent basis for the same.
76. Even otherwise, as submitted by counsel for defendants, plaintiff was maintaining separate ledger account of defendants no.1, 2 and 3 and the amount recoverable from each of said defendants is given separately in the plaint. Although counsel for plaintiff attempted to justify that there were some entries in the ledger account of defendant no.1, which reflected that defendant no.1 had made some payments on behalf of defendant no.2 to third parties, no such conclusion can be drawn from perusal of the ledger account in question. If at all it only reflects that defendant no.1 had made some payments to defendant no.2 but nothing has been placed on record by plaintiff from which it can be concluded that said payments were made by defendant no.1 to third parties on behalf of defendant no.2.
77. After careful perusal of all the documents placed on record by plaintiff as well as testimony of PW1, it can be safely concluded that plaintiff has failed to prove that defendants no.2 and 3 are the sister concerns of defendant no.1 and hence the suit of plaintiff is bad for joinder of defendants no.1, 2 and 3 in a single suit. Even otherwise the amount plaintiff seeks to claim from defendants no.2 and 3 is less than Rs.3 lakh and hence claim of these two defendants, if filed separately, would not have been maintainable in this Court. It appears that plaintiff has clubbed together alleged claims against defendants no.1, 2 and 3 to somehow make out pecuniary jurisdiction of this Court to CS (COMM) No. 2260/2022 & COUNTER CLAIMS NO.9/23, 10/23 and 11/23 Page no. 38 of 46 Digitally signed ILLA by ILLA RAWAT Date:
RAWAT 2025.05.27 16:49:08 +0530 proceed with suit for recovery against defendants no.2 and 3.
This issue is accordingly decided in favour of the defendants and against the plaintiff.
ISSUE No.4:-
Whether the plaint has been signed and verified and suit filed through duly authorized person? (OPP)
78. Onus of proving this issue was on plaintiff. The present suit has been signed, verified and instituted through Sh. R.M. Srivastava, Law Officer/ Authorised Signatory of the plaintiff company who subsequently appeared to depose as PW1 on behalf of the plaintiff company.
79. In order to substantiate that Sh. R.M. Srivastava, Law Officer of plaintiff, was duly authorized on behalf of plaintiff company to sign and verify the plaint and to institute the suit on behalf of plaintiff company, the plaintiff has relied upon Ex.PW1/1 i.e. Board Resolution, passed in meeting of Board of Directors of plaintiff company held on 22.05.2020, in favour of Sh. R.M. Srivastava. This document placed on record by plaintiff clearly bring out the fact that Sh.R.M. Srivastava, Law Officer of the plaintiff company, was duly authorized to sign and verify the plaint and to institute the suit on behalf of the plaintiff company. He is also a competent witness to depose on behalf of the company.
80. Counsel for defendants has contended that plaintiff failed to produce the original Minutes Book. As PW1/Sh.R.M. CS (COMM) No. 2260/2022 & COUNTER CLAIMS NO.9/23, 10/23 and 11/23 Page no. 39 of 46 Digitally signed ILLA by ILLA RAWAT Date:
RAWAT 2025.05.27 16:49:15 +0530 Srivastava otherwise had neither participated in the meeting wherein Resolution authorizing him was passed nor was signatory thereto and hence Resolution Ex.PW1/1 does not stand proved and the plaintiff has failed to discharge the onus of proving that the plaint was signed and verified and suit was instituted by a duly authorized person on its behalf and further failed to prove authority of PW1/Sh.R.M. Srivastava to depose on behalf of plaintiff.
81. It has been held by Hon'ble Supreme Court in case of United Bank of India vs. Naresh Kumar & Ors., 1996 (6) SCC 600; AIR 1997 SC 3 as under:-
"In case like the present where suits are instituted or defended on behalf of a public corporation, public interest should not be permitted to be defeated on a mere technicality. Procedural defects which do not go to the root of the matter should not be permitted to defeat a just cause. There is sufficient power in the Courts, under the Code of Civil Procedure, to ensure that injustice is not done to any party who has a just case. As far as possible a substantive right should not be allowed to be defeated on account of a procedural irregularity which is curable.
It cannot be disputed that a company like the appellant can sue and be sued in its own name. Under Order 6 Rule 14 of the Code of Civil Procedure a pleading is required to be signed by the party and its pleader, if any. As a company is a juristic entity it is obvious that some person has to sign the pleadings on behalf of the company. Order 29 Rule 1 of the Code of Civil Procedure, therefore, provides that in a suit by against a corporation the Secretary or any Director or other Principal officer of the corporation who is able to depose to the facts of the case might sign and verify on behalf of the company. Reading Order 6 Rule 14 together with Order 29 Rule 1 of the Code of Civil Procedure it would appear that even in the absence of any formal letter of authority or power of attorney having been executed a person referred to in Rule 1 of Order 29 can, by virtue of the office which he holds, sign and verify the pleadings on behalf of the corporation. In addition thereto CS (COMM) No. 2260/2022 & COUNTER CLAIMS NO.9/23, 10/23 and 11/23 Page no. 40 of 46 Digitally signed by ILLA RAWAT ILLA Date:
RAWAT 2025.05.27 16:49:21 +0530 and de hors Order 29 Rule 1 of the Code of Civil Procedure, as a company is a juristic entity, it can duly authorise any person to sign the plaint or the written statement on its behalf and this would be regarded as sufficient compliance with the provisions of Order 6 Rule 14 of the Code of Civil Procedure. A person may be expressly authorised to sign the pleadings on behalf of the company, for example by the Board of Directors passing a resolution to that effect or by a power of attorney being executed in favour of any individual. In absence thereof and in cases where pleadings have been signed by one of it's officers a Corporation can ratify the said action of it's officer in signing the pleadings. Such ratification can be express or implied. The Court can, on the basis of the evidence on record, and after taking all the circumstances of the case, specially with regard to the conduct of the trial, come to the conclusion that the corporation had ratified the act of signing of the pleading by it's officer."
82. The judgment in case of United Bank of India (supra) was further followed in case titled as IFCI Venture Capital Funds Ltd. vs. Santosh Khosla & Ors., RFA No.80/2004 decided on 22.02.2012 by Hon'ble High Court of Delhi.
83. In view of documents, Ex.PW1/1, as well as judgment in case of United Bank of India (supra) it is held that plaintiff has discharged the onus of proving that the plaint has been signed and verified and the suit has been filed through a competent person. Further plaintiff has succeeded in proving that PW1/Sh.R.M. Srivastava was competent to depose on behalf of company though evidentiary value of his testimony is not of much advantage to plaintiff company for want of personal knowledge of PW1/Sh.R.M. Srivastava regarding transaction of plaintiff with defendants no.1, 2 and 3. This issue is decided in favour of the plaintiff and against the defendant.
CS (COMM) No. 2260/2022 & COUNTER CLAIMS NO.9/23, 10/23 and 11/23 Page no. 41 of 46 Digitally signed ILLA by ILLA RAWAT Date:
RAWAT 2025.05.27 16:49:28 +0530 ISSUE NO. 5 Whether the plaintiff is entitled to decree for recovery of Rs. 7,62,124/- against the defendant no.1, as prayed for? (OPP) AND ISSUE NO. 6 Whether the plaintiff is entitled to decree for Rs. 81,265/- against the defendants no. 2, as prayed for? (OPP) AND ISSUE No.7:-
Whether the plaintiff is entitled to decree for Rs.1,34,019/- against the defendants no. 3, as prayed for? (OPP)
84. All these issues are being taken up together as they are inter connected.
The onus of proving these issues were on plaintiff. The plaintiff has examined Sh. R.M. Srivastava, its Law Officer as PW1 to prove its case. The testimony of PW1/Sh. R.M. Srivastava has been referred to at length in foregoing paragraphs.
85. The PW-1/Sh. R.M.Srivastava has exhibited certificate U/s 65B of Indian Evidence Act, issued by Sh. Jitendra Kumar Pandey, Credit Control Manager of plaintiff, as Ex. PW-1/8 but in his deposition he was silent on aspect how he could identify signatures of Sh. Jitendra Kumar Pandey thereupon. The details of server of the plaintiff company as well as that of printer from which printouts were taken is not given in Ex.PW1/8. Thus Ex.PW-1/8 does not stand proved in accordance with law and consequently documents Ex. PW-1/2 (Colly) to CS (COMM) No. 2260/2022 & COUNTER CLAIMS NO.9/23, 10/23 and 11/23 Page no. 42 of 46 Digitally signed ILLA by ILLA RAWAT Date:
RAWAT 2025.05.27 16:49:34 +0530 Ex.PW1/4 (Colly) i.e. printout of invoices and ledger accounts of defendants no.1 to 3, Ex.PW-1/5 to Ex.PW1/7, also do not stand proved in accordance with law.
86. The Hon'ble Supreme Court in case of "Anwar P.V. Vs. P. K. Bhasheer, Air 2015 SC 180 has delved upon admissibility of printouts of the documents by observing as under:-
"13. Any documentary evidence by way of an electronic record under the Evidence Act, in view of Sections 59 and 65A, can be proved only in accordance with the procedure prescribed under Section 65B of the Evidence Act. Section 65B deals with the admissibility of the electronic record. The purpose of these provisions is to sanctify secondary evidence in electronic form, generated by a computer. It may be noted that Section starts with a non obstante clause. Thus, notwithstanding anything contained in the Evidence Act, any information contained in an electronic record which is printed on a paper, stored, recorded or copied in optical or magnetic media produced by a computer shall be deemed to be a document only if the conditions mentioned under sub-Section (2) are satisfied, without further proof or production of the original. The very admissibility of such a document, i.e., electronic record which is called as computer output, depends on the satisfaction of the four conditions under Section 65B(2)."
"14. Under Section 65B(4) of the Evidence Act, if it is desired to give a statement in any proceedings pertaining to an electronic record, it is permissible provided the following conditions are satisfied:
(a) There must be a certificate which identifies the electronic record containing the statement;
(b) The certificate must describe the manner in which the electronic record was produced;
(c) The certificate must furnish the particulars of the device involved in the production of that record;
(d) The certificate must deal with the applicable conditions mentioned under Section 65B(2) of the Evidence Act; and
(e) The certificate must be signed by a person occupying a CS (COMM) No. 2260/2022 & COUNTER CLAIMS NO.9/23, 10/23 and 11/23 Page no. 43 of 46 Digitally signed by ILLA ILLA RAWAT Date:
RAWAT 2025.05.27 16:49:42 +0530 responsible official position in relation to the operation of the relevant device.
87. When affidavit/certificate Ex. PW-1/8 is perused in the light of aforesaid judgment, it is seen that none of the material ingredients required for proving the electronic evidence relied upon by the plaintiff, are met with. Hence plaintiff cannot be permitted to rely upon Ex. PW-1/2 to Ex.PW1/7.
88. Admittedly invoices Ex.PW1/2 (Colly) to Ex.PW1/4 (colly) do not bear signatures of respective defendants/employees of defendants. There is nothing on record from which it can be ascertained that original invoices/copy of invoices Ex.PW1/2 (colly) to Ex.PW1/4 (Colly) were even dispatched to any of the defendants. Further, PW1/Sh.R.M. Srivastava does not have any personal knowledge of transaction between plaintiff and each of defendants and was even otherwise not maintaining accounts of plaintiff company. Thus the print outs of invoices/bills and ledger statement, Ex.PW1/2 to Ex.PW1/7, filed by plaintiff, being in the nature of secondary evidence are not admissible in evidence and have no sanctity in absence of proper certificate, compliant with conditions mentioned under sub-section 2 of Section 65B of the Act.
89. Even otherwise, perusal of affidavit/certificate Ex.PW1/8 reveals that same has been signed by Sh. Jitendra Kumar Pandey who had joined plaintiff company only about three years ago. Since this witness was not working with plaintiff company, when business transactions between the plaintiff and CS (COMM) No. 2260/2022 & COUNTER CLAIMS NO.9/23, 10/23 and 11/23 Page no. 44 of 46 Digitally signed ILLA by ILLA RAWAT Date:
RAWAT 2025.05.27 16:49:49 +0530 the defendants took place, his knowledge would also be based on the record of the company. Though nothing has been placed on record by the plaintiff from which it can be ascertained as to what was the nature of work which he was discharging, during the course of his employment, for the plaintiff company but apparently he was not maintaining accounts. Thus the affidavit/certificate, Ex.PW1/8, issued by him also does not satisfy the requirement of Section 65B of IE Act.
90. Although defendants have also taken objection with respect to territorial jurisdiction of the court to entertain the suit of plaintiff the said ground of challenge is not maintainable for defendants in their counter claims admit that plaintiff has its corporate office at 9062/47, Ram Bagh Road, Azad Market, Delhi-110006. Though in the written statements defendants have challenged the claim of plaintiff on several grounds including the fact that orders for transportation were placed at corporate office of plaintiff, from counter claims it appears that defendants no.1 to 3 had placed some orders with plaintiff during period from August 2016 to December 2016. The place/office of plaintiff where said orders were placed has not been specified and hence it is presumed that orders were placed at corporate office of plaintiff.
91. The nutshell of foregoing discussion is that the plaintiff has failed to prove its entitlement to the claimed amount on merits and is thus not entitled to decree for recovery of suit amount against the defendants no.1 to 3, as prayed for. This CS (COMM) No. 2260/2022 & COUNTER CLAIMS NO.9/23, 10/23 and 11/23 Page no. 45 of 46 Digitally signed ILLA by ILLA RAWAT Date:
RAWAT 2025.05.27 16:49:54 +0530 issue is also decided against the plaintiff and in favour of defendant.
ISSUE No.4 :-
Whether the plaintiff is entitled to interest, if any, if so,at what rate and for which period? (OPP)
92. Since it has been held while deciding issue no.3 that plaintiff is not entitled to claim any amount from defendants no.1 to 3, the question of it being entitled to interest also does not arise. This issue is also decided against the plaintiff.
R E L I E F:-
93. In view of the findings on forgoing issues, it is held that plaintiff is not entitled to any relief in the present suit and the suit filed by plaintiff is dismissed.
Further, the counter claims filed by counter claimants/defendants no.1 to 3 are also dismissed for want of compliance of provisions of Section 12A of the Commercial Courts Act. Parties left to bear their respective costs.
File be consigned to record room after due compliance. Digitally signed ILLA by ILLA RAWAT Date:
Announced in the open Court RAWAT 2025.05.27 16:50:02 +0530 on 27th May, 2025.
(ILLA RAWAT) District Judge Commercial Court-03 Central District, THC, Delhi.
CS (COMM) No. 2260/2022 & COUNTER CLAIMS NO.9/23, 10/23 and 11/23 Page no. 46 of 46