Delhi District Court
Ravinder Kumar Batra And Ors vs Rakesh Bansal And Ors on 30 April, 2026
IN THE COURT OF SH. DEVENDER KUMAR JANGALA,
DISTRICT JUDGE (COMMERCIAL COURT)-01,
NORTH WEST, ROHINI, NEW DELHI
CS (COMM) No.374/22
CNR NO.DLNW010106242018
1. Sh. Ravinder Kumar Batra
Proprietor, M/s Batra Velvet 55/1742,
Naiwalan Karol Bagh New Delhi-110005
2. M/s Batra Velvet Through its Proprietor
Sh. Ravinder Kumar Batra
55/1742, Naiwalan Karol Bagh
New Delhi-110005
Through its General Attorney
Mr. Sachin Arora
S/o Sh. Kashmiri Lal Arora,
R/o WZ 46/2, Third Floor,
Gali No.12 Krishna Puri,
Tilak Nagar, New Delhi-110018
...Plaintiff
Versus
1. Sh. Rakesh Bansal
Proprietor
M/s Bansal Sales Corporation
17/3 Central Market
Ashok Vihar, Delhi-110052
2. M/s Bansal Sales Corporation
Through its Proprietor
Sh. Rakesh Bansal
17/3 Central Market
Ashok Vihar, Delhi-110052
........Defendants
SUIT FOR RECOVERY OF RS.6,00,000/-(RUPEES SIX
Digitally
CSsigned
(Comm.) No374/22 Ravinder Kumar Batra and Anr. Vs. Rakesh Bansal and Anr. 1/38
by DEVENDER
DEVENDER KUMAR
KUMAR JANGALA
JANGALA Date:
2026.04.30
16:43:50 +0530
LAKHS ONLY) ALONGWITH PENDENTELITE AND
FUTURE INTEREST.
Date of institution of Suit : 29.09.2018
Date of hearing of final argument : 13.04.2026
Date of Judgment : 30.04.2026
JUDGMENT
1. The plaintiff filed the present suit under the provisions of order XXXVII CPC for recovery of Rs.6 lacs alongwith pendentelite and future interest, against the defendants.
2.1 Brief facts: The facts of the case in brief as per plaint are that the Plaintiff no. 1 is the proprietor of plaintiff no.2/firm and is engaged in the wholesale business of trading of non woven fabrics, U foam, manufacturing of car seat covers and other allied products. The present suit is being instituted through Mr. Sachin Arora being the general attorney of the proprietor of the plaintiff/firm.
2.2 It is stated that the Defendant No.1 is the proprietor of Defendant No.2/firm and is engaged in the retail business of trading of non woven fabric, tailoring accessories and other allied products. That the defendant no.1 being the proprietor of Defendant no.2/firm is liable for its day to day affairs.
2.3 It is stated that the defendants have been purchasing non woven fabrics from the Plaintiffs on credit from time to time vide bill no. 169 dated 07.05.2014 in the sum of Rs. 1,92,751/- (Rupees One Lakh Ninety Two Thousand Seven Hundred and Fifty One Only), bill no 170 dated 09.05.2014 in the sum of Rs. 1,43,509/- (Rupees One Lakh Forty Three Thousand Five Hundred and Nine Only) and vide CS (Comm.) No374/22 Ravinder Kumar Batra and Anr. Vs. Rakesh Bansal and Anr. 2/38 bill no. 171 dated 13.05.2014 in the sum of Rs 4,02,495/- (Rupees Four Lakhs Two Thousand Four Hundred and Ninety Five Only) having VAT TIN No. 07770221839. That the defendants returned some quantity of non woven fabric vide bill no. TI/0057/14-15 dated 07.02.2015 in the sum of Rs. 43,942/- (Rupees Forty Three Thousand Nine Hundred and Forty Two Only) and bill no. TI/0009/15-16 dated 20.06.2015 in the sum of Rs. 64,379/-(Rupees Sixty Four Thousand Three Hundred and Seventy Nine Only) supplied to them by the Plaintiffs.
2.4 It is stated that the plaintiff no.1 owing to the aforementioned business dealings, has been maintaining an open and running account in the name of the defendant no.2 in the regular course of business, which reflects an outstanding amount of Rs. 6,20,122/- (Rupees Six Lakhs Twenty Thousand One Hundred and Twenty Two Only) as on 05.12.2015 towards the purchase of goods by the Defendants from the Plaintiffs as well as purchase return made by the Defendants.
2.5 It is stated that in pursuance of the said goods being received by the defendants and in discharge of their legal liability, the Defendant no.1 on behalf of Defendant no.2 had issued a cheque bearing no. 021956, dated 07.12.2015 drawn on Karnataka Bank Limited, Shalimar Bagh New Delhi branch, in the sum of Rs. 6,00,000/-(Rupees Six Lacs Only), in favour of the Plaintiff no.2, with the assurance that the said cheque shall be duly honoured on presentation.
2.6 It is further stated that based on representations and CS (Comm.) No374/22 Ravinder Kumar Batra and Anr. Vs. Rakesh Bansal and Anr. 3/38 assurance of the defendant no.1, the plaintiff presented the aforesaid cheque bearing 021956 with its bankers, on 13.12.2015. However, the same was returned unpaid bankers for the reason 'Account Closed on 15.12.2015. That since then the Plaintiff no.1 made sincere efforts for the recovery of the amount of the said cheque by making personal visits and requests to the Defendant no.1. However, all the efforts turned futile and the Defendant no.1 has now bluntly refused to make the payment which is legally due to the plaintiffs.
2.7 It is stated that the deliberate dishonouring of the said cheque and the consequent non payment of the outstanding amount by the Defendants, reflects the malafide and fraudulent intentions of the Defendants.
2.8 It is stated that the plaintiffs sent a legal notice dated 31.12.2015 which was duly served upon the defendants but the defendants deliberately, willfully and intentionally failed to comply with the said notice. That the plaintiff also filed criminal complaint case under Section 138 of the Negotiable Instrument Act against the defendants for dishonour of cheque.
2.9 It is stated that the cause of action for filing of the present suit arose in favour of the Plaintiffs and against the Defendants when the Defendants purchased the non woven fabrics and other allied products from the Plaintiff No.2/Firm and the same were supplied to the Defendants. That the cause of action again arose when the cheque in question was issued by the Defendants in favour of the Plaintiff No.2 in discharge of their legal liability. That the cause of action again arose when the cheque in question was CS (Comm.) No374/22 Ravinder Kumar Batra and Anr. Vs. Rakesh Bansal and Anr. 4/38 dishonoured on 15.12.2015 and it again arose on 31.12.2015 when a legal notice to this effect was issued and served upon the Defendants. That the cause of action finally arose when the defendants failed to make the payments.
2.10 It is stated that this court has jurisdiction to entertain and try the present suit as the defendants made the purchases from the plaintiffs at Delhi. That the cheque in question was also issued by the defendants in favour of the Plaintiffs at Delhi. That the said cheque was also dishonoured at Delhi. That both the Plaintiffs and the Defendants work for gain at Delhi within the territorial jurisdiction of this Court.
2.11 With the aforesaid submissions, the plaintiff has instituted the present suit for recovery of Rs.6,00,000/- alongwith pendentelite and future interest @ 24% per annum from the date of filing of suit till actual realization against the defendants.
3. Vide order dated 29.09.2018, the summons for appearance under order XXXVII CPC were issued to the defendants. The defendants on being served put the appearance. Thereafter vide order dated 28.01.2019 the summons for judgment were issued to the defendants. The defendants on being served with the summons for judgment, filed the leave to defend application. Vide order dated 26.08.2021 the leave to defend application moved on behalf of defendants was allowed and the defendants were directed to file written statement within 30 days. The defendants filed written statement in terms of directions of the court.
CS (Comm.) No374/22 Ravinder Kumar Batra and Anr. Vs. Rakesh Bansal and Anr. 5/38 WRITTEN STATEMENT 4.1 In their written statement the defendants have raised various issues regarding maintainability of the suit. It is stated that the present suit is not maintainable either in law or on facts. That the defendants do not owe any amount to the plaintiff. That the claim of the plaintiff in the present suit based on the cheque amount from the defendant is not coherent with the statement of account (running account) as maintained by the plaintiff. That the record of the plaintiff itself shows that the claim of the plaintiff is not the legally recoverable from the defendant. Therefore the suit of the plaintiff is liable to be dismissed with exemplary cost.
4.2 It is stated that as per ledger statement of the plaintiff, the defendant has made the payment at regular intervals and the plaintiff has also purchased material/goods from the defendant and as per the account of the plaintiff, the amount to be recovered by way of the present suit is not, even with amount of the cheque and is much lesser.
4.3 It is stated that in the statement of account, the false entries have been made by the plaintiff at his own whims and volition in order to cause undeserving loss to the defendants. That the said entry is hypothetical in order to adjust the balance of statement and the same are unreasonable and untenable. That the plaintiff is not entitled for the cheque amount or Rs. 6,00,000/- from the defendants. That the plaintiff had no such dues as of the cheque amount and the plaintiff has deliberately presented the said cheque under the pretext of the balance dues and in order to manage with the statement of the running account, the plaintiff has shown the fake entries of the CS (Comm.) No374/22 Ravinder Kumar Batra and Anr. Vs. Rakesh Bansal and Anr. 6/38 amount to score and match with the cheque amount to cause undeserving loss to the defendant.
4.4 It is stated that the plaintiff has no cause of action against the defendant. That the plaintiff before filing the present case has filed complaint under section 138 of the Negotiable Instrument Act against the defendants of the amount of Rs. 6,00,000/- and the plaintiff however, has not stated that the present suit is either based on bills, statement of account or on the cheque. That there are no pending dues of such the amount of 6,00,000/- payable by the defendant.
4.5 That the last transaction so made as reflected in the statement of the ledger of the plaintiff was 20/06/2015 and thereafter there was no transaction made between the plaintiff and defendants. Therefore the suit of the plaintiff is barred by the limitation as the same was filed beyond the last transaction on 20/06/2015. That the plaintiff in order to cover up the limitation at its own volition made false entry of the interest showing on 05/12/2015 and to deposit the cheque which was not meant for the realization and even otherwise the plaintiff was never entitled to that amount and there is no cause arose from 05/12/2015 onwards in favour of the plaintiff.
4.6 It is stated that the case of plaintiff is not maintainable as neither of the bills and the amount of the cheque is the same. That the plaintiff is not certain as to the exact figure or amount he claimed from the defendant. Therefore the present suit of the plaintiff is liable to be rejected under Order 7 Rule 11 CPC.
CS (Comm.) No374/22 Ravinder Kumar Batra and Anr. Vs. Rakesh Bansal and Anr. 7/38 4.7 It is stated that the statement of account is a false piece of paper and does not reflect the true accounts as the returned material by the defendant to the plaintiff as stated in the plaint on the contrary the plaintiff has himself shown as the purchase from the defendant through bills dated 07/02/2015 and 20/06/2015. That the claim of the plaintiff of 24% interest from the defendant is sham and bogus in the absence of any contract or agreement.
4.8 It is stated that the recovery claimed by the plaintiff is based on Rs. 6,00,000/- reflected in the cheque, however the defendant has been contesting the complaint under section 138 of the Negotiable Instrument Act, 1881 refuting the claim of the plaintiff as the cheque was given as security way back in 2014 for the purpose of the security and defendant was making payments on regular intervals to the plaintiff. That there was no occasion for the plaintiff to deposit the said cheque for realization. That the statement of the account shows different balance amount than Rs. 6,00,000/- of the cheque which was undated and not for the purpose of realization.
4.9 It is stated that the plaintiff before the present suit has never handed over the statement of the running account of the defendant's firm which he claims to have maintained in the regular course of business. That there are discrepancies and miscalculation and the entries made are fabricated and concocted by the plaintiff in order to squeeze the amount from the defendant. The averments made on merits are denied. It is stated that the material facts have been concealed by the plaintiff. It is prayed that the suit may kindly be dismissed.
CS (Comm.) No374/22 Ravinder Kumar Batra and Anr. Vs. Rakesh Bansal and Anr. 8/38 REPLICATION
5. The plaintiffs filed a detailed replication to the written statement of defendants. The plaintiffs in the replication have reaffirmed their claim made in the suit and denied the averments of the defendants.
6. After completion of pleadings of parties, following issues were framed vide order dated 04.07.2022:-
1. Whether plaintiff is entitled to recover Rs.6,00,000/- from defendant.? O.P.P.
2. Whether plaintiff is entitled interest, if yes, at what rate and for which period?? O.P.P.
3. Whether suit is barred by limitation? O.P.D.
4. Relief?
7. After framing of issues, the matter was fixed for evidence of the parties.
PLAINTIFF EVIDENCE
8. In support of case of the plaintiff, the attorney of plaintiffs Sh. Sachin Arora examined himself as PW-1. He tendered tendered his evidence by way of affidavit Ex. PW1/A. In his affidavit Ex. PW1/A, the PW-1 has reiterated the averments made in the plaint and relied upon the following documents:-
1 Original Power of Attorney Ex. PW1/1 2 The certified copies of three bill No. 169, 170 and 171 Ex.
PW1/2 to Ex. PW1/4.
3 Copies of bills No. TI/0057/14-15 dated 07.02.2015 and CS (Comm.) No374/22 Ravinder Kumar Batra and Anr. Vs. Rakesh Bansal and Anr. 9/38 TI/0009/15-16 DATED 20.06.2015 Ex. PW1/5 and Ex. PW1/6.
4 Certified copy of statement of account Ex. PW1/7, 5 Copy of Bill dated 28.12.2013 Ex. PW1/8 (OSR), 6 Copy of statement of account for the period 01.04.2013 to 31.03.2014 Ex. PW1/9.
7. Computer generated copy of summary of sale/outward for the relevant period Ex. PW1/10,
8. Computer generated copy of summary of purchase/inward for the relevant period Ex. PW1/11, 9 Computer generated copy of summary of account as on 10.01.2014 Ex. PW1/12, 10 Computer generated copy of summary of account as on 31.05.2014 Ex. PW1/13, 11 Computer generated copy of summary of account as on 31.05.2015 Ex. PW1/14, 12 Certified copy of dishonored cheque and deposit slip Ex. PW1/15 and Ex. PW1/16,
13. Certified copy of cheque returning memos Ex. PW1/17,
14. Office copy of legal notice dated 31.12.2015 Ex. PW1/18,
15. Certified copies of postal receipts Ex. PW1/19 (COLLY)
16. Certified copy of Courier receipts Ex. PW1/20 (COLLY)
17. Certified copies of AD Cards Ex. PW1/21 and Ex. PW1/22,
18. Certified copies of tracking reports Ex. PW1/23 and Ex. PW1/24,
19. Certified copies of tracking report of courier Ex. PW1/25 and CS (Comm.) No374/22 Ravinder Kumar Batra and Anr. Vs. Rakesh Bansal and Anr. 10/38 Ex. PW1/26.
20. Certificate u/s 65 B of Indian Evidence Act Ex. PW1/27.
9. PW-1 was cross-examined at length by Ld. Counsel for defendants. The detailed cross-examination of PW-1 is reproduced as under:-
"I am Graduate. I am associated with M/s Batra Velvet since 2004- 2005. The plaintiff deals in Rexine, non-woven fabrics etc. I have been looking after the business of plaintiff as a Free Lancer. I know everything in regard to the present case as well as complaint filed by the plaintiff against the defendant u/s 138 of N.I. Act pending before Tis Hazari Courts. I appeared as a witness on behalf of plaintiff in the above complaint case and had filed the affidavit in evidence. In my affidavit in complaint case, I have stated that I am working with M/s Batra Velvet as Marketing Executive. The meaning of Marketing Executive is showing the material in the Market. No letter has been issued by M/s Batra Velvet in my favour. There is no relationship of employee and employer between me and the plaintiff. I do not know the meaning of Free Lancer. Free Lancer means that I used to take the goods of plaintiff to other market also for selling. I am not associated with any other Firm or Concern as a Free Lancer. I cannot tell as to who introduced me to M/s Batra Velvet. I am working with several businessman in the Market such as Lallan Tiwari, Anil Tiwari, Ranjeet Pandey, Ashish Kumar Jain, Devender Yadav etc. as Free Lancer. I worked for M/s Batra Velvet till 2017 of supply of material to various parties including the defendant. I used to supply the material of plaintiff to various other parties and used to charge commission from the customers of other parties. The material used to be supplied either on Rickshaw or the party used to take delivery themselves. I was not authorized in writing by the plaintiff for procuring the order. It is correct that I have filed the present suit on behalf of plaintiff as Attorney and I am well conversant with the facts of the present suit as well as the above complaint case. I do not remember the names of the witnesses to POA. I do not remember whether it was registered or not. However, I signed in the Registrar of Notary Public in regard to POA. It is wrong to suggest that I did not sign on any Register. I have filed the present suit for recovery of the amount from defendant. The suit is with respect to the dues against the goods CS (Comm.) No374/22 Ravinder Kumar Batra and Anr. Vs. Rakesh Bansal and Anr. 11/38 supplied by plaintiff to defendant. My suit is in respect to four invoices, as far as I remember. It is correct that as per plaint's para no.4 bill No. 169 dated 07.05.2014, 170 dated 09.05.2014 and 171 dated 13.05.2014 are mentioned. If the goods are to be returned it will be against the bill. Certain goods were returned by defendant on 07.02.2015 and 20.06.2015 but plaintiff had not purchased the goods from defendant. I do not know whether during the period from 07.05.2014 to 13.05.2014 there was any other transaction with any other party or not. The plaintiff has been maintaining the accounts regarding to goods supplied. I do not know how many bill books are being maintained by plaintiff for per day transaction. The bill book contains three leafs for each bill. I have seen the bill books of plaintiff and I also issued some bills on behalf of the plaintiff. I have brought the bill book as per which I myself issued the bill to M/s Meher India dated 16.12.2013, M/s Nawal Dye and Impose dated 12.12.2013. 1 was orally authorized by plaintiff as a Free Lancer to issue bills on behalf of plaintiff. The bill books and other record remained in the custody of plaintiff. The bill book brought by me was given to me by plaintiff. However, there is no formal letter to this effect. I have also brought the original Bank Certificate provided to me by plaintiff for the purpose of evidence. I have not filed the document showing that the plaintiff is a Proprietorship concern.
I was authorized to prepare bills by the plaintiff. The authorization was oral. I was also authorize to sign the bills. I was not authorized to maintain the accounts as it was done by the Accountant. The bill used to be prepared regarding its quantity and rate etc. as per the rate settled between the parties. If plaintiff was in the office, he used to decide the rate and in his absence, I used to decide the rate. In the present case, I had decided on my own the rate of the goods supplied. The goods were supplied by the plaintiff as per the order. The goods were supplied from Karol Bagh in my presence. The quantity of the supplied goods is mentioned in the bill. The plaintiff has the office as well as the Godown in the same building in Karol Bagh at the relevant time.
I do not know whether the invoice contained the interest on account of non-payment within specified time. Attention of the witness is drawn towards the bill which does not contain any interest clause. It is correct that on bill Ex. PW1/4 it is mentioned 'paid'. The attention of the witness is drawn towards the document Ex. PW1/7 which mentions the credit amount of Rs. 1,43,509/- and Rs. 1,92,650/-. Ledger shows payment of Rs. One lac on 28.05.2014 and amount of Rs. 43942 dated 07.02.2015. Again, the amount of Rs. 50,000/- dated 05.05.2015 and again Rs. 64379/- dated 20.06.2015.
CS (Comm.) No374/22 Ravinder Kumar Batra and Anr. Vs. Rakesh Bansal and Anr. 12/38 I cannot say as to at what rate the interest has been charged in the ledger and for which period and at what amount. It is wrong to suggest that the entries in the ledger have been manipulated with regard to entry dated 05.12.2015 of Rs. 40569/-. It is wrong to suggest that the entry with respect to interest to even out the amount of cheque with respect to which the complaint u/s 138 NI Act is filed. It is wrong to suggest that the present case has also been filed with manipulation to the ledger. It is correct that no supply/sale purchase was made after 20.06.2015.
It is wrong to suggest that the defendant had given advance cheque of Rs. Six lac which was not matching with any supply made and the same was misused by the plaintiff. It is wrong to suggest that the complaint case u/s 138 NI Act is based on false facts. It is wrong to suggest that the defendant had made completed payment of all the supplies made to him. I tis wrong to suggest that the plaintiff has filed the present suit without any entitlement to the same. It is wrong to suggest that I have deposed falsely."
10. No other witness was examined on behalf of plaintiff and PE was closed vide statement/order dated 04.08.2023.
11. The perusal of the record reveals that the defendants despite repeated opportunities failed to examine any witness in defence. Vide detailed order dated 03.02.2025, the evidence of defendant was closed. Thereafter the defendant moved an application under order XVIII Rule 17 read with section 151 CPC which was allowed vide order dated 07.08.2025, subject to the cost of Rs.10,000/- and the evidence of defendant was directed to be recorded on Commission basis by Ms. Seema Sindhu, Advocate. The defendant failed to examine any witness before the Ld. Local Commissioner and vide order dated 12.11.2025 one more last and final opportunity was granted to the defendant subject to the cost of Rs.20,000/-. However, despite imposition of cost, the defendant had failed to examine any witness and vide CS (Comm.) No374/22 Ravinder Kumar Batra and Anr. Vs. Rakesh Bansal and Anr. 13/38 order dated 22.12.2025 this court was constrained to close the defendant evidence.
12. I have already heard the arguments at length advanced by Sh. S. C. Jain, Ld.counsel for plaintiff and Sh. Pradeep Bhasin, Ld.counsel for defendant. Written submissions on behalf of parties are also filed.
13. It is argued on behalf of plaintiff that the claim of the plaintiff is duly supported with the documentary evidence and nothing contrary has come on record during the examination of PW1. That the defendant has failed to enter into witness box or to lead any evidence and failed to prove the defence raised in the written statement. That in view of submissions made in the plaint and documents produced on record, the plaintiff is entitled for recovery of the alleged dues against the defendant.
14. On the other hand it is argued on behalf of defendants that the pleadings of plaintiff does not reflect the payments realized by the plaintiff from the defendant. That PW1 has admitted the receipt of payment of bill no.171. That the present suit is filed and presented in September 2018 whereas as per ledger of the plaintiff after 20/06/2015, there was no transaction between the plaintiffs and defendants. That the cause to the plaintiff was subsisted last on 19//06/2018 and there was no continued cause to plaintiff out of the transactions. That the plaintiff in order to extend the period of limitation had made false entry on 05/12/2015 in ledger to justify and match the cheque amount. That the present suit of the plaintiff is barred as per the provision of the section 3 of Limitation Act, 1963.
CS (Comm.) No374/22 Ravinder Kumar Batra and Anr. Vs. Rakesh Bansal and Anr. 14/38 (hereinafter referred to as "LA, 1963"). That the documents exhibited from Ex. PW1/8 to Ex. PW1/14 are not mentioned in the pleadings of the plaintiff. That PW1 has not brought the record which shows that he was authorized to prepare, sign and issue bills in the event he himself stated that he is free-lancer and he is not the agent and employee of the firm. That the PW1 has stated in his evidence that the present case is in respect of the four bills however the contents of the plaint reflects only three bills Ex. PW1/2 to Ex.PW1/4 and in no case the amount claimed in the present suit is same as per bills mentioned after acknowledging payments from the defendant. The plaint does not state about the payments made by the defendant to the plaintiff. It is prayed that in view of objections, the present suit may kindly be dismissed.
15. I have considered the submissions made by Ld.counsel for plaintiffs and perused the entire material on record.
16. It may be relevant now to consider the law pertaining to discharge of burden of proof of the issues as relevant and applicable to the Civil Jurisdiction. In the binding authority of the Hon'ble Supreme Court of India, in M/s. Gian Chand & Brothers and Another v. Rattan Lal @ Rattan Singh: [2013] 3 S.C.R. 601; it has been laid down:-
1.3. It is well settled principle of law that a person who asserts a particular fact is required to affirmatively establish it. The burden of proving the facts rests on the party who substantially asserts the affirmative issues and not the party who denies it but the said principle may not be universal in its application and there may be an exception thereto.
CS (Comm.) No374/22 Ravinder Kumar Batra and Anr. Vs. Rakesh Bansal and Anr. 15/38
17. The various aspects of proving the facts of a case and exceptions, if any, have been duly considered by Hon'ble Supreme Court of India in Anil Rishi vs Gurbaksh Singh in Appeal (civil) 2413 of 2006 on 2 May, 2006, wherein the binding legal position has been reinforced as under :-
"Pleading is not evidence, far less proof. Issues are raised on the basis of the pleadings. Indisputably, the relationship between the parties itself would be an issue. The suit will fail if both the parties do not adduce any evidence, in view of Section 102 of the Evidence Act. Thus, ordinarily, the burden of proof would be on the party who asserts the affirmative of the issue and it rests, after evidence is gone into, upon the party against whom, at the time the question arises, judgment would be given, if no further evidence were to be adduced by either side."
It has been further laid down (supra) :-
"A distinction exists between a burden of proof and onus of proof. The right to begin follows onus probandi. It assumes importance in the early stage of a case. The question of onus of proof has greater force, where the question is which party is to begin. Burden of proof is used in three ways : (i) to indicate the duty of bringing forward evidence in support of a proposition at the beginning or later; (ii) to make that of establishing a proposition as against all counter evidence; and (iii) an indiscriminate use in which it may mean either or both of the others. The elementary rule is Section 101 is inflexible. In terms of Section 102 the initial onus is always on the plaintiff and if he discharges that onus and makes out a case which entitles him to a relief, the onus shifts to the defendant to prove those circumstances, if any, which would disentitle the plaintiff to the same.".
18. After careful perusal of the record and law of land, my issue wise findings are as under:
ISSUE NO. 33. Whether suit is barred by limitation? O.P.D.
19. It is necessary to first decide Issue No. 3 regarding limitation as it goes to the root of the maintainability of the suit. The CS (Comm.) No374/22 Ravinder Kumar Batra and Anr. Vs. Rakesh Bansal and Anr. 16/38 law of limitation is not a mere technicality but a substantive and salutary principle of law designed to ensure legal certainty. As the Hon'ble Supreme Court of India held in Popat and Kotecha Property v. State Bank of India Staff Association, decided on 29.08.2005,, reported as (2005) 7 SCC 510:
"Bar of limitation does not obstruct the execution. It bars the remedy. (See V. Subba Rao and Ors. v. Secretary to Govt. Panchayat Raj and Rural Development, Govt. of A.P. and Ors. (1996 (7) SCC 626.) Rules of limitation are not meant to destroy the rights of parties. They are meant to see that parties do not resort to dilatory tactics, but seek their remedy promptly. The object of providing a legal remedy is to repair the damage caused by reason of legal injury. The law of limitation fixes a life-span for such legal remedy for the redress of the legal injury so suffered. Time is precious and wasted time would never revisit. During the efflux of time, newer causes would sprout up necessitating newer persons to seek legal remedy by approaching the courts. So, a life-span must be fixed for each remedy. Unending period for launching the remedy may lead to unending uncertainty and consequential anarchy. The law of limitation is thus founded on public policy. It is enshrined in the maxim interest reipublicae ut sit finis litium (it is for the general welfare that a period be put to litigation). The idea is that every legal remedy must be kept alive for legislatively fixed period of time. (See N. Balakrishanan v. M. Krishna Murthy (1998 (7) SCC 123)."
20. Thus, the law of limitation does not extinguish the underlying right, it merely restricts the enforceability of the remedy through courts after the prescribed period. Its purpose is not to defeat legitimate claims, but to ensure that parties act with reasonable diligence and do not indulge in unnecessary delay. The legal system provides remedies to redress injuries, but such remedies cannot be kept open indefinitely. Thus, limitation law is grounded in considerations of public policy, encapsulated in the maxim interest republicae ut sit finis litium, meaning that it is in the interest of the State that litigation must come to an end. The legislative intent is to CS (Comm.) No374/22 Ravinder Kumar Batra and Anr. Vs. Rakesh Bansal and Anr. 17/38 ensure that every legal remedy is pursued within a fixed and reasonable time.
21. The central controversy in the present issue is the applicable period of limitation and the starting point of the cause of action. The present suit has been filed by the plaintiff for recovery of Rs.6,00,000/- on the basis of a dishonoured cheque bearing No.021956, dated 07.12.2015, drawn on Karnataka Bank Limited, Shalimar Bagh, New Delhi, which was presented by the plaintiff on 13.12.2015 and was returned unpaid on 15.12.2015 for the reason 'Account Closed'. A legal notice was served upon the defendants on 31.12.2015. The present suit was filed on 29.09.2018. The defendant has contended that the suit is barred by limitation on the ground that the last transaction in the running account was on 20.06.2015, and that the present suit, filed on 29.09.2018, is beyond three years from that date.
22. The first and foremost question to be examined is the applicable Article of limitation and the starting point of the cause of action. The plaintiff has simultaneously pleaded two distinct causes of action, the underlying commercial transactions reflected in the running account, showing an outstanding balance of Rs.6,20,122/- as on 05.12.2015; and another, the dishonour of the cheque on 15.12.2015 in the sum of Rs.6,00,000/-. The suit has been brought under Order XXXVII CPC, which is the summary procedure for suits on negotiable instruments and written contracts. The cheque, which is a negotiable instrument within the meaning of the Negotiable Instruments Act, 1881, forms the primary basis of the suit. For a suit founded on a dishonoured cheque, the cause of action arises on the CS (Comm.) No374/22 Ravinder Kumar Batra and Anr. Vs. Rakesh Bansal and Anr. 18/38 date of dishonour.
23. The applicable article of limitation for the present suit is Article 18 of the First Schedule to the LA, 1963, which prescribes a period of three years for a suit upon a bill of exchange or promissory note, running from the date on which the bill or note was presented for payment and dishonoured. The cheque in question was dishonoured on 15.12.2015. The period of three years therefrom expired on 15.12.2018. The present suit was filed on 29.09.2018, which is clearly within the period of three years from the date of dishonour. The Hon'ble High Court of Delhi in Technical Construction Company v. Engineering Project (India) Limited, decided on 15th March, 2024, reported as 2024 SCC OnLine Del 1924 discussed in detail on aspect of written acknowledgement vis-a- vis Section 18 of the LA, 1963 while relying upon the celebrated decision of Hon'ble Supreme Court in Food Corporation of India v. Assam State Cooperative Marketing & Consumer Federation Ltd, decided on 26.10.2004, reported as (2004) 12 SCC 360. The relevant paragraphs of the Technical Construction (supra) are extracted hereinbelow:
"22. Section 18 of the Limitation Act, reads:
(1) Where, before the expiration of the prescribed period for a suit or application in respect of any property or right, an acknowledgment of liability in respect of such property or right has been made in writing signed by the party against whom such property or right is claimed, or by any person through whom he derives his title or liability, a fresh period of limitation shall be computed from the time when the acknowledgment was so signed.
(2) Where the writing containing the acknowledgment is undated, oral evidence may be given of the time when it was signed; but subject to the provisions of the Indian Evidence Act, 1872 (1 of 1872), oral evidence of its contents shall not be received.
Explanation.-For the purposes of this section,--
CS (Comm.) No374/22 Ravinder Kumar Batra and Anr. Vs. Rakesh Bansal and Anr. 19/38
(a) an acknowledgment may be sufficient though it omits to specify the exact nature of the property or right, or avers that the time for payment, delivery, performance or enjoyment has not yet come or is accompanied by a refusal to pay, deliver, perform or permit to enjoy, or is coupled with a claim to set off, or is addressed to a person other than a person entitled to the property or right,
(b) the word "signed" means signed either personally or by an agent duly authorised in this behalf, and
(c) an application for the execution of a decree or order shall not be deemed to be an application in respect of any property or right.
23. The above-mentioned provision clearly provides that if there is an express acknowledgement of liability in writing by the opposite party, a fresh period of limitation shall be computed from the time when acknowledgement was signed. The same has also been laid down by the Supreme Court in Food Corporation of India (supra), wherein it was held that that to amount to an acknowledgement of liability within the meaning of Section 18 of the Limitation Act, it need not be accompanied by a promise to pay either expressly or even by implication. The relevant paragraphs of the said judgment are set out below:
"14. According to Section 18 of the Limitation Act, an acknowledgement of liability made in writing in respect of any right claimed by the opposite party and signed by the party against whom such right is claimed made before the expiration of the prescribed period for a suit in respect of such right has the effect of commencing a fresh period of limitation from the date on which the acknowledgement was so signed. It is well settled that to amount to an acknowledgement of liability within the meaning of Section 18 of the Limitation Act, it need not be accompanied by a promise to pay either expressly or even by implication.
15. The statement providing foundation for a plea of acknowledgement must relate to a present subsisting liability, though the exact nature or the specific character of the said liability may not be indicated in words. The words used in the acknowledgement must indicate the existence of jural relationship between the parties such as that of debtor and creditor. The intention to attempt such jural relationship must be apparent. However, such intention can be inferred by implication from the nature of the admission and need not be expressed in words. A clear statement containing acknowledgement of liability can imply the intention to admit jural relationship of debtor and creditor. Though oral evidence in lieu of or making a departure from the statement sought to be relied on as acknowledgement is excluded but surrounding circumstances can always be considered. Courts generally lean in favour of a liberal construction of such statements though an acknowledgement shall not be inferred where there is no CS (Comm.) No374/22 Ravinder Kumar Batra and Anr. Vs. Rakesh Bansal and Anr. 20/38 admission so as to fasten liability on the maker of the statement by an involved or far-fetched process of reasoning. So long as the statement amounts to an admission, acknowledging the jural relationship and existence of liability, it is immaterial that the admission is accompanied by an assertion that nothing would be found due from the person making the admission or that on an account being taken something may be found due and payable to the person making the acknowledgement by the person to whom the statement is made."
24. Thus, it can be said that if there is an express written acknowledgment of liability by the defendant, a fresh period of limitation shall start from the time when such acknowledgment was signed. While strongly relying upon Food Corporation of India (supra), the Hon'ble High Court of Delhi in Technical Construction (supra) said that within the meaning of Section 18 of the LA, 1963, it need not be accompanied by a promise to pay either expressly or even by neccessary implication. The statement which provides foundation for a plea of acknowledgement must relate to a present subsisting liability, though the liability may not be indicated in words. The words as used in the acknowledgment must show that there is an existing jural relationship between the parties which can be implied by a clear statement containing acknowledgement of liability. Courts generally apply a liberal construction method of statutory interpretation in ascertaining whether an acknowledgement of debt results in extension of limitation under Section 18 of the LA, 1963.
25. The Court shall also discuss current judicial position with respect to part payment and its effect on limitation expressly provided under Section 19 of the LA, 1963. The Hon'ble Supreme Court of India in Shanti Conductors (P) Ltd. v. Assam SEB, decided on 18.12.2019, reported as (2020) 2 SCC 677 discussed in detail while excerpting Section 19 of the LA, 1963. The relevant CS (Comm.) No374/22 Ravinder Kumar Batra and Anr. Vs. Rakesh Bansal and Anr. 21/38 portion is provided as follows:
"12. Section 19 of the Limitation Act is as follows:
"19. Effect of payment on account of debt or of interest on legacy.--Where payment on account of a debt or of interest on a legacy is made before the expiration of the prescribed period by the person liable to pay the debt or legacy or by his agent duly authorised in this behalf, a fresh period of limitation shall be computed from the time when the payment was made:
Provided that, save in the case of payment of interest made before the 1st day of January, 1928, an acknowledgment of the payment appears in the handwriting of, or in a writing signed by, the person making the payment.
Explanation.--For the purposes of this section--
(a) where mortgaged land is in the possession of the mortgagee, the receipt of the rent or produce of such land shall be deemed to be a payment;
(b) "debt" does not include money payable under a decree or order of a court."
15. Order 7 Rule 6 uses the words "the plaint shall show the ground upon which exemption from such law is claimed". The exemption provided under Sections 4 to 20 of the Limitation Act, 1963 are based on certain facts and events. Section 19, with which we are concerned, provides for a fresh period of limitation, which is founded on certain facts i.e. (i) whether payment on account of debt or of interest on legacy is made before the expiration of the prescribed period by the person liable to pay the debt or legacy, (ii) an acknowledgment of the payment appears in the handwriting of, or in a writing signed by, the person making the payment.
16. We may notice the judgment of this Court dealing with Section 20 of the Limitation Act, 1908, which was akin to present Section 19 of the Limitation Act, 1963. In Sant Lal Mahton v. Kamla Prasad, AIR 1951 SC 477, this Court held that for applicability of Section 20 of the Limitation Act, 1908, two conditions were essential that the payment must be CS (Comm.) No374/22 Ravinder Kumar Batra and Anr. Vs. Rakesh Bansal and Anr. 22/38 made within the prescribed period of limitation and it must be acknowledged by some form of writing either in the handwriting of the payer himself or signed by him. This Court further held that for claiming benefit of exemption under Section 20, there has to be pleading and proof. In paras 9 and 10, the following has been laid down : (AIR p. 479) "9. It would be clear, we think, from the language of Section 20, Limitation Act, that to attract its operations two conditions are essential : first, the payment must be made within the prescribed period of limitation and secondly, it must be acknowledged by some form of writing either in the handwriting of the payer himself or signed by him. We agree with the Subordinate Judge that it is the payment which really extends the period of limitation under Section 20, Limitation Act; but the payment has got to be proved in a particular way and for reason of policy the legislature insists on a written or signed acknowledgment as the only proof of payment and excludes oral testimony. Unless, therefore, there is acknowledgment in the required form, the payment by itself is of no avail. The Subordinate Judge, however, is right in holding that while the section requires that the payment should be made within the period of limitation, it does not require that the acknowledgment should also be made within that period. To interpret the proviso in that way would be to import into it certain words which do not occur there. This is the view taken by almost all the High Courts in India and to us it seems to be a proper view to take. (See Mohd. Moizuddin Mia v. Nalini Bala Devi [Mohd. Moizuddin Mia v. Nalini Bala Devi, 1937 SCC OnLine Cal 20 : AIR 1937 Cal 284 : ILR (1937) 2 Cal 137] ; Lal Singh v. Gulab Rai [Lal Singh v. Gulab Rai, 1932 SCC OnLine All 265 : ILR (1933) 55 All 280] , Venkata Subbhu v. Appu Sundaram [Venkata Subbhu v. Appu Sundaram, ILR (1894) 17 Mad 92] , Ram Prasad Babu v. Mohan Lal Babu [Ram Prasad Babu v. Mohan Lal Babu, 1922 SCC OnLine MP 10 : AIR 1923 Nag 117] and Vishwanath Raghunath Kale v. Mahadeo Rajaram Saraf [Vishwanath Raghunath Kale v. Mahadeo Rajaram Saraf, 1933 SCC OnLine Bom 3 : ILR (1933) 57 Bom 453] .)
10. ... If the plaintiff's right of action is apparently barred under the statute of limitation, Order 7 Rule 6, Civil Procedure Code makes it his duty to state specifically in the plaint the grounds of exemption allowed by the Limitation Act, upon CS (Comm.) No374/22 Ravinder Kumar Batra and Anr. Vs. Rakesh Bansal and Anr. 23/38 which he relies to exclude its operation; and if the plaintiff has got to allege in his plaint the facts which entitle him to exemption, obviously these facts must be in existence at or before the time when the plaint is filed; facts which come into existence after the filing of the plaint cannot be called in aid to revive a right of action which was dead at the date of the suit. To claim exemption under Section 20, Limitation Act the plaintiff must be in a position to allege and prove not only that there was payment of interest on a debt or part- payment of the principal, but that such payment had been acknowledged in writing in the manner contemplated by that section."
(Emphasis supplied)
26. Thus, the Hon'ble Supreme Court in Shanti Conductors (supra) while relying upon Sant Lal Mahton v. Kamla Prasad, decided on 17.10.1951, reported as AIR 1951 SC 477, gave two essentials for a part payment to come under Section 19 of the LA, 1963 which are as follows:
(i) whether payment on account of debt or of interest on legacy is made before the expiration of the prescribed period by the person liable to pay the debt or legacy,
(ii) an acknowledgment of the payment appears in the handwriting of, or in a writing signed by, the person making the payment.
27. The Hon'ble Supreme Court in Shanti Conductors (supra) while relying upon Sant Lal (supra) held that the part payment for extension of limitation is to be proved in only by a written or signed acknowledgment and not by oral testimony. Unless there is a written acknowledgment in the required form, the payment by itself is of no avail.
28. Hence, in view of Section 19 of LA, 1963, the new limitation period begins from the time of payment for a debt or CS (Comm.) No374/22 Ravinder Kumar Batra and Anr. Vs. Rakesh Bansal and Anr. 24/38 interest on a legacy only if the payment is made before the original period expired. The payment is required to be made by the person liable to pay or duly authorised agent. A plaintiff can claim exemption only when there was a payment of interest on a debt or part-payment of the principle along with an acknowledgment in writing by the person making the payment.
29. The defendant's contention that the suit should be treated purely as a suit on the running account, with limitation running from 20.06.2015, cannot be accepted for the following reasons. First, the dishonour of the cheque on 15.12.2015 constitutes an independent and fresh cause of action under the law of negotiable instruments, and the limitation for such a cause of action runs from the date of dishonour under Article 18 of the LA, 1963. Second, the cheque issued on 07.12.2015 constitutes a written acknowledgment under Section 18 of the LA, 1963, signed by the defendant within the original period of limitation, giving rise to a fresh period of three years. Third, even if the defendant's contention that the last transaction was on 20.06.2015 is accepted, the three-year period would have expired on 20.06.2018, and the cheque dated 07.12.2015, being issued and signed by the defendant within that period is a valid acknowledgment that commences a fresh period of limitation. The suit filed on 29.09.2018 is well within this fresh period.
30. The issuance of a cheque carries an unconditional representation of the subsisting debt and constitutes sufficient acknowledgment under the law of limitation under Section 18 of the LA, 1963. The cheque dated 07.12.2015 was issued by the defendant within the original period of limitation running from the date of the last transaction, i.e., 20.06.2015 to 20.06.2018. The issuance and signing of the cheque constitutes a written acknowledgment within CS (Comm.) No374/22 Ravinder Kumar Batra and Anr. Vs. Rakesh Bansal and Anr. 25/38 Section 18 of the LA, 1963, and the suit filed on 29.09.2018 is within three years of such acknowledgment.
31. In view of the foregoing discussion, this Court holds that the present suit is not barred by limitation. The cause of action for the present suit arose on 15.12.2015 i.e. the date of dishonour of the cheque. Three years therefrom expired on 15.12.2018. The suit was filed on 29.09.2018, which is well within the period of limitation. Independently, the cheque dated 07.12.2015 constitutes a valid written acknowledgment of liability under Section 18 of the LA, 1963, and even computing the fresh period of three years from 07.12.2015, the suit filed on 29.09.2018 is within limitation. The defendant's contention that the suit is barred by limitation is therefore rejected.
Accordingly, Issue No. 3 is decided in favour of the Plaintiff and against the Defendant.
ISSUE NO. 11. Whether plaintiff is entitled to recover Rs.6,00,000/- from defendant.? O.P.P.
32. The onus to prove the present issue is on the Plaintiff. The Hon'ble Supreme Court in Chowdamma (D) by LR and Another Versus Venkatappa (D) by LRs and Another, decided on 25.08.2025, reported as 2025 LiveLaw (SC) 838 explained and observed on the basic principles of burden of proof as well as onus of proof while taking help from the landmark case of Addagada Raghavamma and Anr. v. Addagada Chenchamma and Anr, reported as 1963 SCC OnLine SC 37. The relevant para of CS (Comm.) No374/22 Ravinder Kumar Batra and Anr. Vs. Rakesh Bansal and Anr. 26/38 Chowdamma (supra) citing Raghavamma (supra) is reproduced as under for ready reference:
"BURDEN OF PROOF AND ONUS OF PROOF ...
1. Also, in Addagada Raghavamma and Anr. v.
Addagada Chenchamma and Anr,, this Court observed as follows:
"12. ... There is an essential distinction between burden of proof and onus of proof : burden of proof lies upon the person who has to prove a fact and it never shifts, but the onus of proof shifts. ...Such considerations, having regard to the circumstances of a particular case, may shift the onus of proof. Such a shifting of onus is a continuous process in the evaluation of evidence. ..."
33. The burden of proving Issue No. 1 lies on the Plaintiffs. As per the law of the land, as affirmed by the Hon'ble Supreme Court in Anil Rishi vs. Gurbaksh Singh (supra), Raghavamma (supra), and Chowdamma (supra), the onus to prove is upon the plaintiffs and if the plaintiffs discharges that onus and makes out a case to entitle them to the relief asserted, in these circumstances, the onus shifts upon the Defendants to prove such circumstances which may disentitle the plaintiffs to the relief claimed.
34. The plaintiff has sought recovery of Rs.6,00,000/- on the basis of the dishonoured cheque bearing No.021956 dated 07.12.2015. The plaintiff has also relied upon the underlying commercial transactions between the parties, reflected in the running account maintained by the plaintiff, to establish the subsisting liability of the defendant.
35. The Plaintiff has relied upon the certified copies of Bill No.169 dated 07.05.2014, Bill No.170 dated 09.05.2014 and Bill No.171 dated 13.05.2014 Ex.PW1/2 to Ex.PW1/4; copies of return bills CS (Comm.) No374/22 Ravinder Kumar Batra and Anr. Vs. Rakesh Bansal and Anr. 27/38 No.TI/0057/14-15 dated 07.02.2015 and TI/0009/15-16 dated 20.06.2015 Ex.PW1/5 and Ex.PW1/6; certified copy of statement of account Ex.PW1/7; certified copy of dishonoured cheque and deposit slip Ex.PW1/15 and Ex.PW1/16; certified copy of cheque returning memo Ex.PW1/17 and Certificate u/s 65B of the Indian Evidence Act Ex.PW1/27.
36. Before examining the evidentiary value of the documents, it is necessary to note the critical and uncontroverted factual position emerging from the record. The defendant, despite being granted repeated opportunities by this Court, failed to examine any witness in defence. The evidence of the defendant was closed vide order dated 03.02.2025. Even after the defendant moved an application under Order XVIII Rule 17 read with Section 151 CPC, which was allowed subject to costs of Rs.10,000/-, and evidence was directed to be recorded before a Local Commissioner, the defendant failed to appear before the Ld. Local Commissioner. Despite a further opportunity granted subject to costs of Rs.20,000/-, the defendant failed to examine any witness, and the defendant's evidence was ultimately closed vide order dated 22.12.2025. The defendant has thus entirely failed to lead any evidence in support of the defence raised in the written statement..
37. As per the principle of best evidence and the doctrine of adverse inference embodied under Section 114 of the Indian Evidence Act, 1872, the court can presume certain facts on the basis of normal human conduct and business practices. Illustration (g) thereto provides that the Court may presume that evidence which could be and is not produced would, if produced, be unfavourable to the CS (Comm.) No374/22 Ravinder Kumar Batra and Anr. Vs. Rakesh Bansal and Anr. 28/38 person who withholds it. The said provision recognizes that when a party, despite being in a position to lead the best and most direct evidence on a material issue, fails to do so without reasonable explanation, the Court is entitled to draw an adverse inference against such party. This principle has been reiterated and retained under the Bharatiya Sakshya Adhiniyam, 2023, where Section 119 illustration
(g) corresponds to the earlier Section 114 Illustration (g) and continues to allow courts to draw adverse inferences in similar circumstances.
38. In Iswar Bhai C. Patel vs. Harihar Behera, (1999) 3 SCC 457, the Hon'ble Supreme Court observed on adverse inference for not entering into the witness box while referring to Section 114 of the Indian Evidence Act, 1872. The relevant portion is excerpted as follows:
"17.....Having not entered into the witness box and having not presented himself for cross examination, an adverse presumption has to be drawn against him on the basis of the principles contained in Illustration
(g) of Section 114 of the Evidence Act, 1872."
39. The Hon'ble Supreme Court in Chowdamma (supra) also observed on adverse inference for not entering into the witness box without any account. The relevant paras are provided below:
"53. This inference is inescapable. This is not a case of medical inability but of deliberate silence. In civil proceedings, particularly where the facts lie exclusively within the personal knowledge of the party, the refusal to enter the witness box carries grave evidentiary consequences.
54. This principle is neither novel nor uncertain. This Court in Vidhyadhar v. Manikrao and Anr., (1999) 3 SCC 573 held thus:
CS (Comm.) No374/22 Ravinder Kumar Batra and Anr. Vs. Rakesh Bansal and Anr. 29/38 "17. Where a party to the suit does not appear in the witness box and states his own case on oath and does not offer himself to be cross-examined by the other side, a presumption would arise that the case set up by him is not correct .... "
40. The defendant in the present case, despite being granted repeated opportunities by this Court, failed to enter the witness box and lead any evidence in support of the defence raised in the written statement. The defendant's evidence was closed vide order dated 03.02.2025. Even after the defendant moved an application under Order XVIII Rule 17 read with Section 151 CPC, which was allowed subject to costs of Rs.10,000/-, and evidence was directed to be recorded before a Local Commissioner, the defendant failed to appear. Despite a further opportunity granted subject to costs of Rs.20,000/-, the defendant again failed to examine any witness, and the defendant's evidence was ultimately closed vide order dated 22.12.2025. The defence raised in the written statement that the cheque was given as a security cheque, that all dues had been paid, and that the entries in the ledger Ex.PW1/7 are fabricated are all matters lying exclusively within the personal knowledge of the defendant. These are not abstract legal contentions but specific factual claims which could only be established by the defendant stepping into the witness box and subjecting himself to cross- examination. The deliberate and unexplained failure to do so cannot be treated as a mere procedural lapse; it carries grave evidentiary consequences.
41. As observed by the Iswar Bhai C. Patel (supra) and Chowdamma (supra) an adverse presumption has to be drawn against him on the basis of the principles contained in Illustration (g) CS (Comm.) No374/22 Ravinder Kumar Batra and Anr. Vs. Rakesh Bansal and Anr. 30/38 of Section 114 of the Evidence Act, 1872. The legal position remains unchanged under the Bharatiya Sakshya Adhiniyam, 2023, Section 119 Illustration (g) thereof being the direct successor to Section 114 Illustration (g) of the Indian Evidence Act, 1872, and continuing to permit Courts to draw adverse inferences in like circumstances. Accordingly, this Court draws a strong adverse inference against the defendant, and the defence of security cheque, full payment, and fabricated ledger entries stands wholly unsubstantiated and must be rejected.
42. Turning now to the evidence adduced by the plaintiff, the three invoices Ex.PW1/2 to Ex. PW 1/4 establish the supplies made by the plaintiff to the defendant. The total of the three invoices comes to Rs.7,38,755/-. Against this, the plaintiff has accounted for returns made by the defendant vide Ex.PW1/5 to Ex. PW1/6 and payments as reflected in the statement of account Ex.PW1/7, including payment of Rs.1,00,000/- on 28.05.2014 and Rs.50,000/- on 05.05.2015. The statement of account Ex.PW1/7 thus reflects the outstanding balance after crediting all payments and returns.
43. The defendant has argued that the endorsement 'paid' on Ex.PW1/4 (Bill No.171) shows that the said bill has been fully paid. PW-1 acknowledged this endorsement in cross-examination but stated that it was wrong to suggest that the defendant had completed payment of all supplies. It is pertinent to note that even if the entire amount of Bill No.171 of Rs.4,02,495/- is treated as paid, the aggregate outstanding from Bills No.169 and 170 of Rs.1,92,751/- + Rs.1,43,509/- = Rs.3,36,260/- still exists. After adjusting the returns of Rs.43,942/- and Rs.64,379/- totaling to Rs.1,08,321/- and the CS (Comm.) No374/22 Ravinder Kumar Batra and Anr. Vs. Rakesh Bansal and Anr. 31/38 established payment of Rs.1,50,000/- against these two bills, the outstanding principal exceeds the amounts paid. The statement of account Ex.PW1/7 accurately reflects these transactions and the outstanding balance. The cheque for Rs.6,00,000/- was issued precisely in discharge of this running liability.
44 . The dishonoured cheque Ex.PW1/15, the deposit slip Ex.PW1/16, and the cheque returning memo Ex.PW1/17 have been duly proved by PW-1. These documents conclusively establish that the cheque bearing No.021956 dated 07.12.2015 for Rs.6,00,000/- drawn by Defendant No.1 on Karnataka Bank Limited, Shalimar Bagh, was presented for payment on 13.12.2015 and was returned dishonoured on 15.12.2015 with the endorsement 'Account Closed'. The legal notice dated 31.12.2015 Ex.PW1/18, along with the postal receipts Ex.PW1/19 (Colly.), courier receipts Ex.PW1/20 (COLLY), AD cards Ex.PW1/21 and Ex.PW1/22 and tracking reports Ex.PW1/23 to Ex.PW1/26 have also been proved on record and establish that the legal notice was duly served upon the defendants.
45. It is now necessary to consider the evidentiary value of the statement of account Ex.PW1/7 under Section 34 of the Indian Evidence Act, 1872, which provides that entries in books of account regularly kept in the course of business are relevant whenever they refer to a matter into which the Court has to inquire, but such statements shall not alone be sufficient evidence to charge any person with liability. However, in the present case, the entries in the statement of account are not the sole evidence. The statement of account is corroborated by the three original invoices Ex.PW1/2 to Ex.PW1/4; the two return bills Ex.PW1/5 and Ex.PW1/6; the CS (Comm.) No374/22 Ravinder Kumar Batra and Anr. Vs. Rakesh Bansal and Anr. 32/38 dishonoured cheque itself Ex.PW1/15, which is an independent document bearing the signature of the defendant acknowledging the liability; the cheque returning memo Ex.PW1/17; and the legal notice and proof of service Ex.PW1/18 to Ex.PW1/26. The case is thus not one where the plaintiff relies solely on a self-serving ledger. There is ample independent corroboration.
46. The certified copies of the bills and cheque are admissible in evidence. The Power of Attorney Ex.PW1/1 authorises Mr. Sachin Arora to institute and prosecute the present suit. PW-1 deposed that he signed before the Notary Public and the Registrar of Notary Public in this regard. While PW-1 has acted as a freelancer for the plaintiff, he has been specifically authorised through the Power of Attorney to institute and prosecute the present suit, and his evidence as attorney is legally admissible.
47. The defendant's plea that the cheque was an undated security cheque is not only unproved, it is contradicted by the documentary evidence on record. The cheque Ex.PW1/15 is dated 07.12.2015. It is not undated. The amount of Rs.6,00,000/- mentioned in the cheque is in discharge of a specific and quantified liability arising from the running account. The defendant's assertion that the cheque was meant only as security and not for realization has not been proved by any evidence. The defendant did not enter the witness box to support this plea. No document, no correspondence, no prior understanding, and no oral evidence has been led to establish that the cheque was given as security. In the absence of such proof, the cheque must be treated as having been issued in discharge of a legal liability, as specifically stated by the plaintiff.
CS (Comm.) No374/22 Ravinder Kumar Batra and Anr. Vs. Rakesh Bansal and Anr. 33/38
48. In view of the foregoing discussion, this Court finds that the plaintiff has successfully discharged the burden of proof on Issue No.
1. The plaintiff has proved, through cogent and corroborated documentary evidence, that non-woven fabrics were supplied by the plaintiff to the defendant vide Bills No.169, 170 and 171, the defendant returned certain goods vide return bills dated 07.02.2015 and 20.06.2015, the outstanding balance after accounting for all returns and payments was reflected in the statement of account, the defendant issued a cheque for Rs.6,00,000/- in discharge of the outstanding liability, the said cheque was dishonoured on 15.12.2015 with the endorsement 'Account Closed'. The defendant has led no evidence in rebuttal. The plaintiff is therefore entitled to recover Rs.6,00,000/- from the defendant.
Accordingly, Issue No. 1 is decided in favour of the plaintiff and against the defendant.
ISSUE NO. 22. Whether plaintiff is entitled interest, if yes, at what rate and for which period? O.P.P.
49. The onus to prove the present issue is upon the plaintiff. The plaintiff seeks interest @ 24% per annum on the principal amount from the date of filing of the present suit till the date of its actual realisation. However, PW-1 in cross-examination admitted that the invoices/bills do not contain any interest clause. The defendant has denied any contractual agreement for interest at 24% per annum.
50. Under Section 34 CPC, pendente lite and future interest can be awarded only on the principal sum adjudged. Post-suit interest cannot be awarded on the interest component of a decretal amount. The CS (Comm.) No374/22 Ravinder Kumar Batra and Anr. Vs. Rakesh Bansal and Anr. 34/38 ancient Rule of Damdupat prevalent in Hindu common law, recognised by the Hon'ble Supreme Court provides that the interest recoverable at any one time cannot exceed the principal amount. This rule acts as a check on the accumulation of interest beyond equitable limits. It is a fundamental principle that the right to claim compound interest must be founded on a contract expressly stipulating compound interest or on a usage/custom of trade. The Hon'ble Supreme Court in M/s D. Khosla and Company vs. Union of India, decided on 07.08.2024, reported as 2024 INSC 587 while observing on the term interest on interest or compound interest under Section 3(3) of the Interest Act, 1978 held that the courts are not empowered to grant compound interest unless specifically provided in a contract or a statute. The Court observed that:
"17. Section 34 of the CPC provides that where the decree is for payment of money, the court may order interest at such rate as the court deems reasonable to be paid on the principal sum adjudged. Again, the reading of the aforesaid Sub-Section (1) of Section 34 CPC would reveal that the interest is payable on the principal sum adjudged and not on interest part of the award.
18. The Interest Act, 1978 vide Sub-Section (3) of Section 3 specifically lays down that nothing in Section 3 which permits the court to award interest shall empower the court to award interest upon interest. It means that ordinarily the courts are not entitled to award interest upon interest unless specifically provided either under any statute or under the terms and conditions of the contract
19. In Oil and Natural Gas Commission vs. M.C. Clelland Engineers S.A., (1999) 4 SCC 327, which was also a case under the Act, this Court observed that there cannot be any doubt that the Arbitrators have power to grant interest akin to Section 34 CPC and it is clear that interest is not permissible upon interest awarded but only upon the claim made. In the aforesaid case, the claim made was in two parts, and in the second part, interest on delayed payment was also claimed. In CS (Comm.) No374/22 Ravinder Kumar Batra and Anr. Vs. Rakesh Bansal and Anr. 35/38 that situation, the court held that the interest awarded would form part of the damages or compensation for delayed payment and would become part of the principal amount and thus, in that circumstances, Arbitrator has the power to grant interest on interest which partakes the compensation awarded.
20. In State of Haryana and Others vs. S.L. Arora and Company, (2010) 3 SCC 690, it was observed that interest, unless otherwise specified, refers to simple interest and that interest is payable only on principal amount and not on any accrued interest. It was further held that the compound interest can be awarded if there is a specific provision under the statute or in the contract for compounding of interest but no general discretion lies with the courts or tribunals to award compound interest or interest upon interest.
21. In Hyder Consulting (UK) Limited vs. Governor, State of Orissa, (2015) 2 SCC 189, this Court was dealing with Section 31(7) of the Arbitration and Conciliation Act, 1996, wherein for the purposes of payment of post-award interest, the phrase 'sum directed to be paid by award' was used and it was held that it includes the pre-award interest and, therefore, post- award interest is payable on the sum awarded which includes pre-award interest. However, a distinction was made between Section 31(7) which simply uses the word 'sum' and Section 34 CPC wherein the phrase 'on principal sum adjudged' has been used. The departure in the use of the language in the two provisions was held to be of great significance which clearly showed that the term 'sum' under Section 31(7) refers to aggregate amount of the award and the pre-award interest whereas 'principal sum adjudged' under Section 34 CPC refers only to the amount awarded.
22. The case of UHL Power Company Limited vs. State of Himachal Pradesh, (2022) 4 SCC 116, is again in relation to interpretation of Section 31(7) of the Arbitration and Conciliation Act, 1996, wherein the principal laid down in Hyder Consulting (UK) Limited (supra) has been accepted.
23. In the light of the above legal provisions and the case law on the subject, it is evident that ordinarily courts are not supposed to grant interest on interest except where it has been specifically provided under the statute or where there is specific stipulation to that effect under the terms and conditions of the contract. There is no dispute as to the CS (Comm.) No374/22 Ravinder Kumar Batra and Anr. Vs. Rakesh Bansal and Anr. 36/38 power of the courts to award interest on interest or compound interest in a given case subject to the power conferred under the statutes or under the terms and conditions of the contract but where no such power is conferred ordinarily, the courts do not award interest on interest."
(Emphasis supplied)
51. Thus, The Hon'ble Supreme Court in D. Khosla (supra) while referring to Oil and Natural Gas Commission v. M.C. Clelland Engineers S.A., (1999) 4 SCC 327, State of Haryana v. S.L. Arora and Company, (2010) 3 SCC 690, and Hyder Consulting (UK) Limited v. Governor, State of Orissa, (2015) 2 SCC 189, observed that held that interest is payable only on the principal amount and that compound interest or interest upon interest can be awarded only where there is a specific statutory provision or an express contractual stipulation to that effect. In the absence of any such provision or stipulation in the present case, this Court is not empowered to award interest upon interest, and accordingly, the pendente lite and future interest shall be calculated only on the principal sum adjudged and not on any pre-suit interest component.
52. Coming back to the facts of the present case, the invoices Ex.PW1/2 to Ex.PW1/4 do not contain any interest clause whatsoever, as admitted by PW-1 in cross-examination. There is accordingly no contractual or documentary basis for the claimed rate of 24% per annum. The transaction is admittedly commercial in nature and the principal amount of Rs.6,00,000/- has been withheld by the Defendant. The Plaintiff has been deprived of its legitimate dues. In these circumstances, this Court deems it just and equitable to award interest @ 9% per annum on the principal amount of Rs.6,00,000/- from the date of filing of the suit i.e. 29.09.2018 till CS (Comm.) No374/22 Ravinder Kumar Batra and Anr. Vs. Rakesh Bansal and Anr. 37/38 realisation.
Issue No.2 is accordingly decided partly in favour of the plaintiff and against the defendant.
ISSUE NO. 44. Relief?
52. In view of the findings on Issues No. 1, 2, and 3, a decree is passed for recovery of the principal sum of Rs.6,00,000/- (Rupees Six Lakhs Only) in favour of the plaintiffs, Sh. Ravinder Kumar Batra & M/s Batra Velvet, and against the defendants, Sh. Rakesh Bansal & M/s Bansal Sales Corporation. The plaintiffs shall be also entitled to pendente lite and future interest @ 9% per annum on the said principal amount of Rs.6,00,000/- from the date of filing the suit till the date of its actual realization. The plaintiffs are also entitled to the costs of the suit.
Decree sheet be drawn accordingly.
File be consigned to the record room after due compliance.
Announced in the open Court today on this 30th day of April, 2026 (DEVENDER KUMAR JANGALA) District Judge (Commercial Court)-01 North-West/Rohini/New Delhi.
30.04.2026 CS (Comm.) No374/22 Ravinder Kumar Batra and Anr. Vs. Rakesh Bansal and Anr. 38/38