Delhi District Court
Vikas Kumar Vishnoi vs Siddh Chemiplast Pvt Ltd on 13 May, 2026
CS (Comm) No.31/2022: Vikas Kumar Vihsnoi, Proprietor M/s Innovative Solutions V/s Siddh
Chemiplast Pvt. Limited: DOD: 13.05.2026
IN THE COURT OF VINOD YADAV:
DISTRICT JUDGE (COMMERCIAL COURT)-02:
NORTH-WEST DISTRICT: ROHINI COURTS: NEW DELHI
CNR No.DLNW01-000188-2022
Civil Suit (Comm.) No.31/2022
In the matter of:
Vikas Kumar Vishnoi (Sole Proprietor),
M/s Innovative Solutions,
Ground Floor, Khasra No.154/44, Extended Lal Dora,
Village Pooth Khurd,
Delhi-110039.
.....Plaintiff
(Through Shri Manish Singhal, Advocate)
Versus
Siddh Chemiplast Private Limited,
B-53, Lawrence Road Industrial Area,
Delhi-110053.
Through Its Managing Director/Directors/Principal
E.Mail: [email protected]
.....Defendant
(Through Shri Vineet Chadha, Shri Rajesh Samanotra,
Shri Ginish Kumar and Shri Varun Gupta, Advocates)
Date of Institution of Suit : 10.01.2022
Date of transfer to this Court : 04.09.2023
Date of hearing final arguments : 02.05.2026
Date of judgment : 13.05.2026
Digitally signed
VINOD by VINOD
YADAV
YADAV Date:
2026.05.13
16:56:15 +0530
Page 1 of 49
CS (Comm) No.31/2022: Vikas Kumar Vihsnoi, Proprietor M/s Innovative Solutions V/s Siddh
Chemiplast Pvt. Limited: DOD: 13.05.2026
SUIT FOR RECOVERY OF Rs.31,53,723/- (Rupees Thirty One Lakhs Fifty
Three Thousand And Seven Hundred Twenty Three Only) ALONGWITH
PENDENTELITE AND FUTURE INTEREST
13.05.2026
JUDGMENT
Plaintiff's case:
1. The plaintiff claims himself to be the proprietor of firm M/s Innovative Solutions, which is engaged in the business of trading and selling of "chemical for industrial use" like Calcium Carbonate, which is one of the ingredients used to manufacture plastic compounds. The plaintiff has a valid GST registration in Delhi State as well as Central Excise registration in the name of his firm.
2. Defendant is a private limited company, which is stated to be engaged in the business of manufacturing and selling of "plastic compounds" with Shri Neeraj Kumar Jain and Ms.Shikha Jain as its Directors.
3. As per the case set up by the plaintiff, in the month of January' 2014, the defendant through its Director Shri Neeraj Kumar Jain and other representatives approached him seeking supply of "chemicals for industrial use" on credit basis. It was represented by the aforesaid Director of defendant that they required the said goods/chemical for further processing and to use the same as an input chemical for generating final product, i.e plastic compound "Filler Master Batches". The other Page 2 of 49 CS (Comm) No.31/2022: Vikas Kumar Vihsnoi, Proprietor M/s Innovative Solutions V/s Siddh Chemiplast Pvt. Limited: DOD: 13.05.2026 ingredients of said chemical compound being Pewax, Zinc Stearate, Paraffin oil, antioxidant as well as some polymers and additives. It was agreed between the parties that payment(s) in respect of the supplied goods would be made by the defendant within 30 days of the receipt of goods by it. After mutual discussion between the parties, the plaintiff started supplying goods to the defendant against issuance of sale invoices and in turn the defendant also issued C-forms to the plaintiff from time to time.
The defendant knew the plaintiff prior to the year 2014 as a Sales Manager of some other company, but later on plaintiff started his own trading.
4. The plaintiff supplied the said material from January' 2014 till July' 2015 through various Invoices. Some of the material was supplied by the plaintiff on the asking of defendant after obtaining from M/s Bajaj Printers & Packers (hereinafter referred to as "Bajaj").
5. The material was supplied by the plaintiff to the defendant at the godown of defendant in Tijara, District Alwar, Rajasthan for which the defendant duly issued C-Forms for the relevant years and as such, the supply of material is admitted in the matter. The plaintiff had been maintaining a running ledger account in the name of defendant in which on account payment was being made by the defendant. The last payment of Rs.50,000/- (Rupees Fifty Thousand Only) in the said account was received by the plaintiff from the defendant on 09.05.2017, thereby leaving a balance of Rs.20,47,872.50 P. Page 3 of 49 CS (Comm) No.31/2022: Vikas Kumar Vihsnoi, Proprietor M/s Innovative Solutions V/s Siddh Chemiplast Pvt. Limited: DOD: 13.05.2026
6. The plaintiff demanded the outstanding amount from the defendant through various WhatsApp messages as well as E.Mails, but to no avail. On one hand, the defendant kept on seeking time to make payment of the outstanding amount and on the other hand after almost two years of the last payment, the defendant on 30.08.2019 sent a letter to the plaintiff, inter alia demanding a sum of Rs.9,22,669/- (Rupees Nine Lakhs Twenty Two Thousand Six Hundred Sixty Nine Only) and for the first time raised the issue of defect in goods. This letter was also followed by legal notice dated 05.09.2019, sent by the defendant to the plaintiff, inter alia for the first time setting out two Debit Notes, first dated 21.03.2017 (for a sum of Rs.15,00,000/-) and another dated 03.04.2018 (for a sum of Rs.18,56,317/-).
7. Considering the aforesaid conduct of defendant, the plaintiff approached the North-West District Legal Services Authority invoking pre- institution mediation in terms of Section 12-A of Commercial Courts Act, 2015, however, the same did not materialize. Accordingly, Certificate of Non-Starter Report dated 10.12.2019 was issued in the matter.
8. As such, the plaintiff has filed the instant suit, inter alia seeking recovery of a sum of Rs.31,53,723/- (Rupees Thirty One Lakhs Fifty Three Thousand Seven Hundred Twenty Three Only) (which includes principal amount of Rs.20,47,872/- + interest quotient @ Rs.11,05,851/-) alongwith pendentelite and future interest @ 18% per annum from the date of filing of suit till realization thereof.
Page 4 of 49CS (Comm) No.31/2022: Vikas Kumar Vihsnoi, Proprietor M/s Innovative Solutions V/s Siddh Chemiplast Pvt. Limited: DOD: 13.05.2026 Defendant's case:
9. (i) After getting served with the summons, the defendant filed written statement, inter alia raising the defence that the goods/material supplied by the plaintiff was of inferior quality, as a consequence whereof the end product of the defendant got spoiled and as such, it suffered huge losses. It was further stated that the defendant was constrained to raise Debit Notes against the plaintiff which were not accounted for.
(ii) The defendant stated that there was an outstanding liability towards the plaintiff in the matter for a sum of Rs.9,22,669/- (Rupees Nine Lakhs Twenty Two Thousand Six Hundred Sixty Nine Only).
(iii) It was contended that present suit had been filed by the plaintiff, only as a counterblast to the aforesaid Debit Notes, letters and notice issued by the defendant and with the only motive to pressurize the defendant to withdraw its claim against the plaintiff.
(iv) The defendant admitted having made part-payments of Rs.6,00,000/- and Rs.50,000/- to the plaintiff. With regard to aforesaid payment of Rs.50,000/- having been made by the defendant to the plaintiff on 09.05.2019, same has been termed to be a "friendly loan" advanced to the plaintiff.
10. It is, however, admitted position on record that no counter- claim has been filed in the matter. Further, there is no Chemical Analysis Report showing that the end product of the defendant got spoiled on account of supply of defective material by the plaintiff. There are no complaint(s) from the third parties being the customers of the defendant.
Page 5 of 49CS (Comm) No.31/2022: Vikas Kumar Vihsnoi, Proprietor M/s Innovative Solutions V/s Siddh Chemiplast Pvt. Limited: DOD: 13.05.2026
11. Replication to the written statement was filed by the plaintiff, inter alia denying the Debit Notes and reiterating the averments made in the plaint.
12. With these pleadings of the parties, vide order dated 15.03.2024, following issues were settled for trial in the matter:
Issues:
(i) Whether the defendant had issued Debit Notes dated 30.03.2016, 21.03.2017, 27.03.2018, 03.04.2018, 07.01.2019 and 11.05.2019 to the plaintiff and if so, its effect? OPD.
(ii) Whether the plaintiff is entitled to decree of the suit amount, as prayed for? OPP.
(iii) If answer to aforesaid issue is in affirmative, whether the plaintiff is entitled to interest thereupon. If so, at what rate and for what period? OPP.
(iv) Relief.
13. Pursuant to framing of issues, vide order dated 15.03.2024 itself, Shri Naveen Tayal, Advocate, was appointed as "Local Commissioner" to record evidence in the matter.
Plaintiff's evidence:
14. (a) In order to discharge the onus of proving issues put upon it, plaintiff/Shri Vikas Kumar Vishnoi examined himself as PW-1, who in his evidence by way of Affidavit Ex.PW1/A has reiterated the averments made in the plaint and referred to the following documents:
(i) Copy of Registration Certificate (Form GST REG-06), issued Page 6 of 49 CS (Comm) No.31/2022: Vikas Kumar Vihsnoi, Proprietor M/s Innovative Solutions V/s Siddh Chemiplast Pvt. Limited: DOD: 13.05.2026 by Government of India in respect of firm M/s Innovative Solutions as Ex.PW1/1 (Colly);
(ii) Copy of Central Excise Registration Certificate (Form RC), issued by Department of Revenue, Ministry of Finance in respect of M/s Innovative Solutions as Ex.PW1/2 (Colly);
(iii) VAT Registration details of the plaintiff firm as Ex.PW1/3 (Colly);
(iv) Copies of Sales Invoices in relation to the goods sold by the plaintiff to the defendant on various occasions as Ex.PW1/4 (OSR) to Ex.PW1/81 (OSR) (from page 48 to 125 of the documents filed by the plaintiff);
NB: Since plaintiff could not produce original of Invoice No.1, dated 23.01.2014, for a sum of Rs.1,075/-, same was marked by learned Local Commissioner as Mark A (inadvertently written as Ex.PW1/6 in the Affdavit by way of evidence of PW-1).
(v) Copies of Sales Tax Forms (C-Forms), issued by the defendant in favour of plaintiff as Ex.PW1/82 (OSR) to Ex.PW1/88 (OSR) (from pages 126 to 141 of the documents filed by plaintiff);
(vi) Copies of ledger account, maintained by the plaintiff in respect of the business transactions done with the defendant for the period w.e.f 01.01.2014 to 31.03.2017; 01.04.2017 to 31.03.2019, as Ex.PW1/89 to Ex.PW1/93 respectively, wherein a sum of Rs.20,47,872.50 is being being as outstanding.
(vii) Printouts of WhatsApp messages exchanged between the plaintiff and Shri Neeraj Jain, Director of defendant company as Page 7 of 49 CS (Comm) No.31/2022: Vikas Kumar Vihsnoi, Proprietor M/s Innovative Solutions V/s Siddh Chemiplast Pvt. Limited: DOD: 13.05.2026 Ex.PW1/94 (Colly) (from pages 142 to 146 of the documents filed by plaintiff);
(viii) Printouts of SMS messages exchanged between plaintiff and Shri Neeraj Jain, Director of defendant company as Ex.PW1/95 (Colly) (pages 147 to 151 of the documents filed by plaintiff);
(ix) Copy of final reminder/notice, dated 30.08.2019, got served by the defendant upon the plaintiff as Ex.PW1/96;
(x) Copy of legal notice dated 05.09.2019, sent on behalf of defendant to the plaintiff as Ex.PW1/97;
(xi) Copy of ledger account maintained by the plaintiff in respect of the transactions done with M/s Bajaj Printers and Packers for the period 01.04.2015 to 31.03.2016 as Ex.PW1/98;
(xii) Printouts of the ledger account of the defendant in relation to the purchases made by the defendant as Ex.PW1/99;
(xiii) Printouts of E.Mails exchanged between the defendant and plaintiff regarding dealings with Bajaj Printer and Packers as Ex.PW1/100 (Colly);
(xiv) Certificate of Non-Starter Report dated 10.12.2019, issued under the signatures of Secretary, DLSA, North-West as Ex.PW1/101;
(xv) Certificate(s) under Section 65-B of Indian Evidence Act, 1872, dated 31.12.2021 and 02.09.2023, issued under the signatures of PW-1 regarding correctness of digital documents filed by plaintiff as Ex.PW1/102 and Ex.PW1/103 respectively;
(xvi) Certificates dated 02.09.2023 and 26.07.2024, both issued Page 8 of 49 CS (Comm) No.31/2022: Vikas Kumar Vihsnoi, Proprietor M/s Innovative Solutions V/s Siddh Chemiplast Pvt. Limited: DOD: 13.05.2026 under the signatures of PW-1, under Order XI Rule 6(3) CPC as Ex.PW1/104 and Ex.PW1/105 respectively;
(b) PW-1 was thoroughly cross-examined by learned counsel for the defendant. In his cross-examination, the ITR Returns filed by him and Balance Sheets for the Financial Year 2014-15 (Assessment Year 2015-16) to Financial Year 2023-24 (Assessment Year 2024-25) [except for the Financial Year 2016-17 (Assessment Year 2017-18) are Ex.PW1/X1 (Colly) (OSR).
Defendant's Evidence:
15. (a) On the other hand, Shri Neeraj Jain, Director of defendant company examined himself as DW-1, who in his evidence by way of affidavit Ex.DW1/A has reiterated the averments made in the written statement and proved on record the following documents:
(i) Copy of GST Registration Certificate (Form GST REG-06) of defendant company Ex.DW1/1;
(ii) Copy of Aadhar Card of DW-1 as Mark A;
(iii) Original Debit Note dated 21.03.2017, issued by the defendant against the plaintiff as Ex.DW1/3 (running into four pages);
(iv) Original Debit Note dated 03.04.2018, issued by the defendant against the plaintiff as Ex.DW1/4 (running into four pages);
(v) Carbon copy of courier receipt dated 22.03.2017 as Ex.DW1/5;
(vi) Printouts of E.Mail from pages No.102 to 108 in judicial file Page 9 of 49 CS (Comm) No.31/2022: Vikas Kumar Vihsnoi, Proprietor M/s Innovative Solutions V/s Siddh Chemiplast Pvt. Limited: DOD: 13.05.2026 as Ex.DW1/6 (Colly);
(vii) Copies of ledger account maintained by the defendant in respect of the business transactions done with the plaintiff for the period from 01.04.2013 to 31.03.2014; 01.04.2014 to 31.03.2015;
01.04.2015 to 31.03.2016; 01.04.2016 to 31.03.2017; 01.04.2017 to 31.03.2018; 01.04.2018 to 31.03.2019; and 01.04.2019 to 15.09.2022 as Ex.DW1/7 (Colly) (OSR) (from pages 40 to 48 of the documents filed by the defendant) (objected to learned counsel for the plaintiff as not accompanied with proper Certificate as per statute of BSA, 2023);
(viii) Copy of Demand Notice dated 23.03.2019, sent on behalf of M/s Haryana Stone Impex to the defendant as Ex.DW1/8 (OSR);
(ix) Copy of reply dated 16.05.2019, sent on behalf of defendant to M/s Haryana Stone Impex as Mark B (inadvertently written as Ex.DW1/9 in the Affidavit by way of evidence of DW-1);
(x) Copy of letter/notice dated 30.08.2019, sent on behalf of defendant to the plaintiff as Ex.DW1/10 (Colly);
(xi) Copy of letter/reminder dated 07.01.2019, sent on behalf of defendant to the plaintiff as Ex.DW1/11 (Colly);
(xii) Copy of legal notice dated 05.09.2019, sent on behalf of defendant to the plaintiff as Mark C (also Ex.PW1/97) (inadvertently written as Ex.DW1/12 in the evidence by way of Affidavit of DW-1); and
(xiii) Certificate under Section 63(1) of BSA, 2023, issued under the signatures of DW-1 as Ex.DW1/13.
Page 10 of 49CS (Comm) No.31/2022: Vikas Kumar Vihsnoi, Proprietor M/s Innovative Solutions V/s Siddh Chemiplast Pvt. Limited: DOD: 13.05.2026
(b) DW-1/Shri Neeraj Jain was thoroughly cross-examined by learned counsel for the plaintiff. In his cross-examination, the ITR documents in respect of defendant company were put as Ex.DW1/PX-1 (Colly) (from pages 1 to 221).
16. This is all as far as evidence recorded in the matter is concerned.
17. Before proceeding further, it is pertinent to mention here that when the matter was ripe for hearing final arguments, defendant preferred an application under Order VII Rule 14(3) CPC r/w Section 15 CPC, inter alia seeking to place on record two E.Mails, both dated 03.11.2014. Vide detailed order dated 16.02.2026, the said application filed by the defendant was dismissed.
18. I have heard arguments advanced at Bar by Shri Manish Singhal, Advocate, learned counsel for the plaintiff and Shri Vineet Chaddha, Advocate, learned counsel for the defendant and gone through the entire material on record. I have also perused the written arguments filed on behalf of both the parties.
19. From the material on record, it is evident that the material supplied by the plaintiff was only one of the constituents of final product manufactured by the defendant. The defendant for the first time raised the issue of defect in goods on 30.08.2019, i.e after more than two years of the supply of goods.
Page 11 of 49CS (Comm) No.31/2022: Vikas Kumar Vihsnoi, Proprietor M/s Innovative Solutions V/s Siddh Chemiplast Pvt. Limited: DOD: 13.05.2026
20. There is no material to substantiate that the Debit Notes Ex.DW1/3 and Ex.DW1/4 were ever communicated by the defendant to the plaintiff. There are no third party complaints regarding the defect in goods which were supplied by the plaintiff to the defendant. There is no Chemical Analysis Report either of the end product or the goods supplied by the plaintiff. The defendant has not placed on record the duly audited Balance-Sheets, showing the list of creditors and debtors which is mandatory for a private limited company like the defendant. There is no notice issued by defendant under Section 42 of Sales of Goods Act, 1930 inter alia intimating/complaining the plaintiff about defect in goods supplied by him.
21. Bearing in mind the aforesaid aspects, my findings on the issues are as under.
22. Issue No.(i):
Whether the defendant had issued Debit Notes dated 30.03.2016, 21.03.2017, 27.03.2018, 03.04.2018, 07.01.2019 and 11.05.2019 to the plaintiff and if so, its effect? OPD.
And Issue No.(ii):
Whether the plaintiff is entitled to decree of the suit amount, as prayed for? OPP.
The onus to prove issue No.1 was upon the defendant, while the onus to prove issue No.(ii) was upon the plaintiff. Both these issues are being taken up together, as the same are inter-connected and the findings thereupon would be common. In order to succeed on issue No. Page 12 of 49 CS (Comm) No.31/2022: Vikas Kumar Vihsnoi, Proprietor M/s Innovative Solutions V/s Siddh Chemiplast Pvt. Limited: DOD: 13.05.2026
(ii), the plaintiff has to establish the supply of goods and the defendant having not made complete payment of the supplied goods; whereas, in order to succeed on issue No.(i), the defendant is required to prove the defect in goods, the factum of defect in goods having been duly communicated to the plaintiff within reasonable time of receipt thereof.
The defendant is further required to prove Debit Note dated 21.03.2017 (Ex.DW1/3) and Debit Note dated 03.04.2018 (Ex.DW1/4). As regards the other Debit Notes mentioned in issue No.(i), i.e Debit Notes dated 30.03.2016, 27.03.2018, 07.01.2019 and 11.05.2019 appear to have been wrongly written by the defendant in the written statement and as such, the same are not being dealt with.
Defect in goods - Whether proved by the defendant:
23. The defence of the defendant was premised primarily on the edifice that the plaintiff had supplied inferior quality goods to the defendant whereby the final product so manufactured in the manufacturing process was inferior and the defendant had suffered losses in its business and in view of such inferior product/losses, the defendant had raised/issued certain debit notes to the plaintiff which had duly been sent to the plaintiff and the plaintiff had failed to disclose such debit notes as well as to account for the same in its ledger/final accounts and further that the plaintiff had to pay an amount of Rs.9,22,669/- as per the ledger account of defendant.Page 13 of 49
CS (Comm) No.31/2022: Vikas Kumar Vihsnoi, Proprietor M/s Innovative Solutions V/s Siddh Chemiplast Pvt. Limited: DOD: 13.05.2026
24. It is an admitted fact that the defendant has neither filed any counter claim in the present suit so as to claim the alleged amount nor has instituted any other proceedings to recover the said alleged amount. The allegations of the defendant regarding the aforesaid amount payable by the plaintiff have not been substantiated through legally sustainable evidence.
25. The defendant has been unable to prove that it had received alleged defective goods from the plaintiff at any point of time and further that due to such alleged defective goods, the final product had become defective and further that due to such defective final product, it had suffered any loss in its business by way of consequent claims made by any third party in this regard. The defendant has not filed any third party complaints/ communications/debit notes issued by the third parties to the defendant in relation to the alleged defective goods supplied by the plaintiff and also the defendant has failed to lead any evidence to substantiate either the supply of defective goods by the plaintiff or defective final product due to alleged defective input raw material supplied by the plaintiff and/or any losses suffered by the defendant specifically and directly related on such account.
26. The defendant/DW-1 in his cross-examinations on various dates has stated and admitted the following facts:-
(a) The plaintiff's material calcium powder/calcium carbonate was only one of the inputs of the final product namely `filler master batches' being used by the defendant whereby other products of Page 14 of 49 CS (Comm) No.31/2022: Vikas Kumar Vihsnoi, Proprietor M/s Innovative Solutions V/s Siddh Chemiplast Pvt. Limited: DOD: 13.05.2026 several companies were also being used as input materials by the defendant simultaneously with the said product of the plaintiff. It is not the case of the defendant that it had been only using the product of the plaintiff as its input raw material, rather the defendant/DW-1 admitted that he had also been using the goods of several other companies as well, which is apparent from following extract of his cross-examination:
Cross-examination of DW-1, dated 22.08.2025: xxxxx Q-1 (j) Please tell as to from which companies you were purchasing your raw material for production purposes for the years 2012 till 2016?
Ans. There were several companies from which we were purchasing the raw material......' xxxxx Cross-examination of DW-1 dated 13.10.2025: xxxxx Q-32. Apart from Omya, what other primary brands/make were you using as raw material (calcium)?
Ans. There were 2-3 brands such as Zantat etc. xxxxx
27. The plaintiff specifically confronted the defendant's witness regarding statements made in para No.6 of the evidence affidavit Ex.DW1/A and marked as `Y' to `Y-1'.
xxxxx Page 15 of 49 CS (Comm) No.31/2022: Vikas Kumar Vihsnoi, Proprietor M/s Innovative Solutions V/s Siddh Chemiplast Pvt. Limited: DOD: 13.05.2026 Q-10. In view of statement i.e. "in the earlier lot of supplies the plaintiff was supplying good quality material" please identify the goods/mentioned in the statement from the sales invoices/ledger account?
Ans. I am unable to identify. (Vol. there were lot of goods of different grades received by us from the plaintiff on different occasion on regular basis hence I am unable to identify).'..........
xxxxx
28. The final product of the defendant namely filler master batches required several input raw materials namely calcium carbonate, polymer and additives. The defendant had been using various other input raw materials to produce its final products namely filler master batches, which has been specifically admitted by the defendant and the same is apparent from his answer to the following questions:-
Cross-examination of DW-1, dated 06.10.2025:
xxxxx Q-13. Please specify as to what other input raw material were added to the production process apart from the above raw material of the plaintiff?
Ans. In the production process, other raw materials used were polymer and additives.
Q-14. What do you mean by additives use by the company in the production of the filler master batch?
Ans. Mainly Pewax, Zink stearate, paraffin oil, antioxidant and several minor other additives. Q-15. What was the proportion of raw material of Page 16 of 49 CS (Comm) No.31/2022: Vikas Kumar Vihsnoi, Proprietor M/s Innovative Solutions V/s Siddh Chemiplast Pvt. Limited: DOD: 13.05.2026 the plaintiff as well as other input raw materials?
Ans. Seventy to eighty percent plaintiff material was being used for final product.'...........
xxxxx
29. The defendant's witness was specifically cross-examined and the question (Q. No.16) was put as to what was the impact on the final product in case any one of the above raw material that is polymer and additives were not used in correct proportion. The said question was responded by the defendant's witness, wherein he admitted that the same would affect the quality of the final product.
Cross-examination of DW-1, dated 06.10.2025:
xxxxx Q-16. What is the impact on the final product in case any one of the above raw material that is polymer and additives are not used in correct proportion?
Ans. It affects the quality of the final product.
xxxxx
30. (i) The defendant in support of its allegations has been unable to produce any final day report (manufacturing report for each relevant day) or product testing report on which the alleged defective material of the plaintiff was used by the defendant. The failure to produce such reports belies the claim of the defendant that the material of the plaintiff was defective.
(ii) DW-1 in his cross-examination duly admitted that the material Page 17 of 49 CS (Comm) No.31/2022: Vikas Kumar Vihsnoi, Proprietor M/s Innovative Solutions V/s Siddh Chemiplast Pvt. Limited: DOD: 13.05.2026 of the plaintiff was used as input raw material only if the tests results qua the quality of the goods were satisfactory. The following cross- examination of the DW-1 in relation to answers to question No. 18 to 23 of cross-examination dated 06.10.2025 is relevant, which is re-produced hereunder:
xxxxx Q-18. Is there any final day report regarding goods of inferior quality final product that are produced ona particular day?
Ans. Yes. There is daily report regarding such inferior production. (Vol. we prepare a daily production report in which we mention final product. We used to modify the inferior quality products by change in the formulation of polymer and additives.).
Q-19. How do you daily ascertain as to whether the product manufactured is of inferior quality or not?
Ans. We do the required test in blown film machine installed in our factory and MFI test.
Q-20. As per the said test what is the report that is generated in relation to the particular inferior product?
Ans. The said test report determines as to whether the product is inferior or not.
Q-21. Does that test report indicates the exact cause of production of such inferior product?
Ans. The said report does not show the exact cause of production of such inferior product. (Vol. There can Page 18 of 49 CS (Comm) No.31/2022: Vikas Kumar Vihsnoi, Proprietor M/s Innovative Solutions V/s Siddh Chemiplast Pvt. Limited: DOD: 13.05.2026 be following reasons due to which inferior quality product is manufactured i.e. manufacturing process, calcium carbonate and additives. Accordingly, we check all the three parameters and do the necessary corrections in that entire lot of inferior quality product so as to maintain the quality).
Q-22. Do you used to test the input raw materials (i.e. calcium supplied by plaintiff) used for production prior to using them in the manufacturing process?
Ans. We used to first manufacture small batch by using the input raw material and then we used to test the said batch through blown film test and MFI test.
Q-23. Is it correct that you used the plaintiff's goods if the test results were satisfactory?
Ans. It is correct.
xxxxx
(iii) DW-1 was further specifically asked as to whether the defendant ever returned the alleged defective material of the plaintiff to which he admitted that defendant had not returned such material, which is apparent from his answer to Question No.24 of his cross-examination dated 13.10.2025, which is re-produced hereunder:
xxxxx Q.24: Have you ever returned the alleged defective goods?
Ans.: No. (Vol.) I had e.mailed the plaintiff, but he did not respond.
xxxxx Page 19 of 49 CS (Comm) No.31/2022: Vikas Kumar Vihsnoi, Proprietor M/s Innovative Solutions V/s Siddh Chemiplast Pvt. Limited: DOD: 13.05.2026
31. The defendant never communicated to the plaintiff about the alleged defective goods. The defendant though, made a statement that it had offered inspection to the plaintiff regarding such defective material but, upon asked about the mode of communication of offering such inspection, DW-1 baldly stated that he had communicated through verbal as well as e-mail. However, the defendant has failed to prove any such communication regarding alleged defective goods on record, as it has failed to place any such written communication including e-mail on record. In this regard, reference can be had to his answers to Questions No.25 and 26, which are re-produced hereunder:
Cross-examination of DW-1, dated 13.10.2025:
xxxxx Q.25: Did you ever give any inspection to the plaintiff regarding the alleged defective goods?
Ans.: Yes. I offered the inspection to the plaintiff.
Q.26: Through which mode of communication you offered such inspection to the plaintiff?
Ans.: Yes. I communicated through verbal as well as e.mail. Even I can produce the emails.
xxxxx
32. The defendant/DW-1 was specifically asked and confronted that if it had identified the defective goods after testing, then why it had used such alleged defective goods for production purposes. DW-1 vaguely answered that it was a general practice in trade to provide a discount on Page 20 of 49 CS (Comm) No.31/2022: Vikas Kumar Vihsnoi, Proprietor M/s Innovative Solutions V/s Siddh Chemiplast Pvt. Limited: DOD: 13.05.2026 purchases in case of such defective material issues, as is evident from his answer to the following question:
Cross-examination of DW-1, dated 13.10.2025:
xxxxx Q-27. As stated by you - when you identified the plaintiff's goods as defective after testing then why did you use such alleged defective goods for production?
Ans. It is a general practice in the trade that whenever there is any defective material, the supplier usually provides a discount on such purchases. (Vol.) Previously the plaintiff gave a discount of Rs.50 lakhs/-. There was another discount of Rs.15 lakhs/- which was verbally agreed but the plaintiff did not enter Rs.15 lakhs/- discount in their books. Although, it is informed through e- mails also.'.........
xxxxx
33. The defendant has alleged that since the material/goods supplied by the plaintiff were defective, therefore, final product of the defendant namely `filler master batches' was also defective and further that the defendant had suffered losses. The defendant further alleged that in view of the above defective goods, the defendant had issued debit notes to the plaintiff.
34. The entire edifice of the cross-examination of PW-1 by the defendant was on the goods supplied by the plaintiff pertaining to "Bajaj".
Page 21 of 49CS (Comm) No.31/2022: Vikas Kumar Vihsnoi, Proprietor M/s Innovative Solutions V/s Siddh Chemiplast Pvt. Limited: DOD: 13.05.2026 It is evident that the defendant had approached the plaintiff requesting him to approach "Bajaj" to purchase the goods, as "Bajaj" had refused to deal with the defendant directly. It appears that the plaintiff supplied the goods purchased from "Bajaj" to the defendant vide Invoices dated 21.04.2014, 25.04.2014, 02.05.2014 (two Invoices) and 06.05.2014. It is further evident that some quality issue arose in relation to the said material. It is also evident that defendant and "Bajaj" primarily entered into settlement talks in relation to the said quality dispute. Thereafter, the plaintiff and "Bajaj" appeared to have settled the matter, which led to "Bajaj" issuing Credit Note to the plaintiff for an amount of Rs.50,00,000/- (Rupees Fifty Lakhs Only) and the plaintiff in turn issued similar Credit Note of Rs.50,00,000/- to the defendant and as such, the matter with regard to the "Bajaj" stood settled. In this regard, the relevant portion of the cross-examination of DW-1, dated 18.12.2025 is re-produced hereunder:
xxxxx Q-53. What was the final settlement in relation to the goods supplied by the plaintiff to the defendant (being manufactured by Bajaj Printers and Packers)?
Ans. It was settled at Rs.50 lakhs and we received a credit note of Rs.50 lakhs form the plaintiff as final settlement.' xxxxx
35. It is settled law that the defendant had to unimpeachably prove that the goods sold by the plaintiff to the defendant were defective due to which the final product was defective and that the defendant had suffered Page 22 of 49 CS (Comm) No.31/2022: Vikas Kumar Vihsnoi, Proprietor M/s Innovative Solutions V/s Siddh Chemiplast Pvt. Limited: DOD: 13.05.2026 losses and to substantiate the same, the defendant had to prove third party claims received in relation to such alleged defective goods or any debit notes raised by any third party against the defendant due to such defective goods. The defendant had to further unimpeachably prove that the factum of such defective goods were duly communicated to the plaintiff and the alleged debit notes so raised were duly sent by the defendant and the same were received by the plaintiff and that the plaintiff had duly accepted such debit notes in adjustment of its liability. However, the defendant has not been able to prove that such goods were defective or that it had suffered any losses and it had further failed to prove that any third party has made any claims against the defendant due to such alleged defective goods of the plaintiff.
Whether the defendant has proved Debit Notes:
36. The defendant has alleged that it had raised the following debit notes and had sent/served/communicated the alleged debit notes to the plaintiff on various occasions. The details of the two debit notes are as under:-
a. Debit note dated 21.03.2017 (Ex.DW-1/3). b. Debit note dated 03.04.2018 (Ex.DW1/4).
37. The goods were supplied by the plaintiff to the defendant from 23.01.2014 till 24.07.2015, however, in the said entire period, the defendant did not communicate that the goods supplied by the plaintiff were defective. The plaintiff admittedly is not a manufacturer and is only a Page 23 of 49 CS (Comm) No.31/2022: Vikas Kumar Vihsnoi, Proprietor M/s Innovative Solutions V/s Siddh Chemiplast Pvt. Limited: DOD: 13.05.2026 trader of the goods supplied by the third parties. The plaintiff had procured the said goods from the reputed entities including namely `Omya India Private Limited' and `Eurasia Polychem Pvt. Ltd.', whereby the quality test certificate of the manufacturing company was always annexed with each lot of goods so supplied by the plaintiff.
38. The defendant had allegedly raised the first debit note on 21.03.2017 for a sum of Rs.15,00,000/-. The said debit note was allegedly raised `against the cost of raw material and inputs'. The said debit note states as under:-
xxxxx "Dear Sir, As discussed so many times in the previous years (2014-2015), (2015-16), 2016-2017) with regards to the substandard/defective material being supplied by you, we are debiting your account by Rs.15.00 lacs (as a part amount) as agreed upto over telephonic discussion between us against the cost of raw material & our inputs.
Further discount/debit note will be decided as per mutual discussion as assured by you against the supplies made by you as pe the following details...........' xxxxx
39. The plaintiff had admittedly supplied the goods in the year 2013-14 up to 24.07.2015; whereas, the debit note mentions the supply of sub-standard goods in the year 2016-17 as well.Page 24 of 49
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40. Upon further perusal of the debit note dated 21.03.2017, it transpires that the defendant had mentioned, labeled and included the entire sales made by the plaintiff to the defendant as `defective'. The said debit note starts from the date 03.04.2014 and covers up til the last admitted sales transaction dated 24.07.2015. The said debit note mentions the incorrect bill amount under each and every entry of such debit note. For example the entry No. 1 of the debit note mentions date of bill as 03.04.2014 for an amount of Rs.2,70,450/-, but, however, the actual amount of the sales invoice is Rs.2,52,450/-, which is also reflected in the ledger of the plaintiff as well as the corresponding ledger of the defendant. Similarly, for each of the invoice details, the amount of the invoice has been mentioned wrong and false and further that for the total sales in relation to such sales invoices for each financial year has been incorrectly and falsely mentioned. The same has been done for the transactions in the financial year 2014-15 as well as for the financial year 2015-16 (uptill the admitted date of last transaction i.e. 24.07.2015). Thus, the said debit note is false, fabricated and concocted for the present proceedings.
41. Further, the debit note dated 21.03.2017 has been entered into the books of accounts of the defendant only on 31.03.2017, which confirms the suspicion that the alleged debit note was forged and fabricated. It is the cardinal rule of accounting that whenever an entry is done, it has to correspond with the actual accounting incidence i.e. if the debit note would have been raised on 21.03.2017, the corresponding entry in the ledger account would be on 21.03.2017 and not on 31.03.2017. Thus, the said debit note is sham and fraud upon the plaintiff.
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42. (i) It is further noteworthy that the Debit Note dated 21.03.2017, defendant had made an adverse claim of Rs.15 lakhs. However, the defendant has failed to even state as to the basis upon which the said amount had been derived or computed. Similarly is the case for the debit note dated 03.04.2018 whereby an adverse claim of Rs.18,56,317/- has been raised through the alleged debit note but, however, no explanation or basis of such computation has been stated or proved by the defendant in accordance with law.
(ii) In the Debit Notes dated 21.03.2017 and 03.04.2018, the defendant had also included the purchase invoices (sales by the plaintiff) in relation to "Bajaj" as well. However, as per the own admissions of DW-1, the defendant had already settled the accounts in relation to "Bajaj" for a sum of Rs.50,00,000/-, which was received by way of credit note from the plaintiff. The defendant has included the said entries vide Invoice dated 21.04.2014, bearing No.E003 (stated to be for Rs.21,61,563/- as per debit note; actual amount Rs.19,73,700/), dated 25.04.2014 vide invoice No. E004 (stated to be for Rs.22,19,563/- as per debit note; actual amount of Rs.19,73,700/-), 02.05.2014 (two invoices) (E005 dated 02.05.2014 stated to be for Rs.14,41,009/- in the debit note; actual amount Rs.13,15,800/-), (E006 dated 02.05.2014 stated to be for Rs.13,68,958/- in the debit note; actual amount Rs.12,50,010/-) and invoice No. E-009 dated 06.05.2014 (stated to be for Rs.3,79,926/-; actual amount Rs.3,49,860/-). Thus, the alleged debit notes dated 21.03.2017 and 03.04.2018, which comprised of the already settled amount with "Bajaj" cannot be correct and the same are false and fabricated for the purposes of the present proceedings.
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(iii) Similarly, for the Debit note dated 03.04.2018, the defendant has again taken the entire transactions between the plaintiff and the defendant in the said debit note and termed the same as defective goods. Further, the defendant has also taken the goods manufactured by Bajaj and sold by the plaintiff to the defendant whereby the said account was duly settled but, however, the defendant has also mentioned the same in the alleged debit note dated 03.04.2018. Further, the amount towards the invoice has also been mentioned incorrectly.
43. (i) The defendant was duly confronted as to why he had taken the invoices of "Bajaj", which were duly settled, in the debit notes dated 21.03.2017 and 03.04.2018, the relevant extract of cross-examination of DW-1 in this regard is as under:
xxxxx Q-60. When you settled the accounts in relation to the defective goods manufactured by Bajaj printer and Packers (which are already settled in Rs.50 lakh as per your statement in 2016) then why you had shown the purchase in the relation to the same in the Ex. DW01/3 and DW-1/4?
Ans. We have shown the entire purchase made by us from the plaintiff in the said Exhibits and the debit notes issued are for other than the transaction in relation to goods manufactured by Bajaj printer and Packers.
Q-61. I put it to you that the amount of the purchase value of each and every entry of the respective purchase as shown in Ex. DW-1/3 and DW-1/4 does Page 27 of 49 CS (Comm) No.31/2022: Vikas Kumar Vihsnoi, Proprietor M/s Innovative Solutions V/s Siddh Chemiplast Pvt. Limited: DOD: 13.05.2026 not correspond to the actual amount of the purchase value?
Ans. There is a clerical mistake happening in purchase value as mentioned in the Debit Notes because the tax value had been added twice in these purchase values however the debit note amounts have been issued on the actual purchase values.
Q-62. As per your records, when was the first debit note issued by you to the plaintiff in relation to the alleged defective goods?
Ans. First Debit Note was issued on 31.03.2016.' xxxxx
(ii) It is evident that the said Debit Notes were never issued by the defendant at any point of time and the same has not been positively and unimpeachably proved by the defendant. The defendant has not proved that the alleged debit notes were ever communicated or delivered to the plaintiff. The alleged debit notes were never delivered either by post/courier or through email at any point of time.
44. The defendant has not filed on record or proved in evidence that it had ever received any complaint from any third parties/customers of the final products manufactured by the defendant in which the input raw material of the plaintiff was used. Upon confronting the defendant's witness about the discrepancies in the purchase amount in such debit notes, the defendant in its cross-examination admitted of such discrepancies/falsities as under:-
Page 28 of 49CS (Comm) No.31/2022: Vikas Kumar Vihsnoi, Proprietor M/s Innovative Solutions V/s Siddh Chemiplast Pvt. Limited: DOD: 13.05.2026 Cross-examination of DW-1, dated 18.12.2025:
xxxxx Q-61. I put it to you that the amount of the purchase value of each and every entry of the respective purchase as shown in Ex. DW-1/3 and DW-1/4 does not correspond to the actual amount of the purchase value?
Ans. There is a clerical mistake happening in purchase value as mentioned in the Debit Notes because the tax value had been twice in these purchase values however the Debit Note amounts have been issued on the actual purchase values.
xxxxx
45. The Debit notes issued on 21.03.2017 and 03.04.2018 comprise of the entries commencing from 03.04.2014 onwards. As per the own admission of the defendant, in case the input material was defective, the same would have been duly ascertained even prior to using the same for the manufacturing of final product on the same day of the production. For example, in case any input material is used for production on 03.04.2014, whether the same is defective or not, could be ascertained on the same day as per the own admissions by the defendant. However, the defendant has now disputed the same and alleged that it had communicated the said defects to the plaintiff, but no documentary evidence has been placed on record in this regard. The defendant had issued the first debit note on 21.03.2017, whereas in the debit note itself, the invoice is dated 03.04.2014 which is almost after a lapse of more than two years and eleven months (02 years and 11 months).
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46. It is noteworthy that Section 63 of Sales of Goods Act, 1930 (hereinafter referred to as the "Act") contemplates that a reasonable time is a question of fact and further that in case any reference is made to a reasonable time, the question what is reasonable time is a question of fact. In the present case, admittedly the sales were made from the year 2013-14 onwards and later on Debit Notes were issued after lapse of considerable period of time.
47. Even there is no notice worth the name contemplated under Section 42 of "Act" placed on record by the defendant to substantiate that the material/goods supplied by the plaintiff were sub-standard/defective in nature. Section 42 of the "Act" for ready reference is re-produced hereunder:
xxxxx
42. Acceptance.--
The buyer is deemed to have accepted the goods when he intimates to the seller that he has accepted them, or when the goods have been delivered to him and he does any act in relation to them which is inconsistent with the ownership of the seller, or when, after the lapse of a reasonable time, he retains the goods without intimating to the seller that he has rejected them.
xxxxx
48. Thus, Section 42 of the "Act" creates a deeming fiction where the goods are deemed to have been accepted when the buyer intimates to the seller that he has accepted them or when the goods have been delivered Page 30 of 49 CS (Comm) No.31/2022: Vikas Kumar Vihsnoi, Proprietor M/s Innovative Solutions V/s Siddh Chemiplast Pvt. Limited: DOD: 13.05.2026 to the buyer, who acts in relation to them which is inconsistent with the ownership of the seller, or when the buyer retains the goods without issuing intimation of rejection after lapse of "reasonable time".
49. (i) On the aspect of "reasonable time" regarding intimation of defect in goods by a buyer to the supplier, the Hon'ble High Court of Delhi in case reported as, "RFA (OS) No.65/2015", titled as, "M/s S&S Technocarft (P) Ltd. V/s Rathi Steel Limited" (DOD: 17.08.2015) has been pleased to lay down as under:
xxxxx
15. The only issue which would arise would be as to what would be the reasonable time to intimate rejection of the goods. The goods, as to be noted from the supply order and the bills raised pursuant thereto, are MS bars of different diameters. The inspection of the said goods would at best require a week's time and since it is not the case of either party that the appellant had previously examined the goods and thus giving the appellant the right under Section 41 of the Sale of Goods Act, to a reasonable opportunity to examine the goods, the time for the reasonable opportunity would be at best a week. If within said reasonable time the appellant did not intimate rejection of the goods, as per the mandate of Section 42 of the Sale of Goods Act, the goods would be deemed to be accepted. The rejection of the goods on the allegation of the same not being of good quality on November 27, 2009 is sans any particulars of how the goods were not of good quality. The rejection has thus to be treated as a sham and a pleading relating thereto has to be treated as a moonshine.Page 31 of 49
CS (Comm) No.31/2022: Vikas Kumar Vihsnoi, Proprietor M/s Innovative Solutions V/s Siddh Chemiplast Pvt. Limited: DOD: 13.05.2026 xxxxx (underlining which is mine emphasized)
(ii) On somewhat similar aspect, the Hon'ble High Court of Delhi in case reported as, "RFA Nos.1007/2017 & 1014/2017", titled as, "M/s KCL Limited V/s Thomson Press India Limited" (DOD: 06.12.2017) has been pleased to observe as under:
xxxxx
8. In my opinion even if this clause of four days for raising a grievance was not there, yet, the appellant/defendant was bound by virtue of Section 42 of the Sales of Goods Act, 1930. As per this provision once no objection is raised within a reasonable period of time with respect to alleged defects in the goods, then, the buyer cannot thereafter object to any defect in the goods. Trial court has in this regard referred to this provision of the Sales of Goods Act in para 55 of the impugned judgment and this para 55 reads as under:-
"55. In case of sales of goods, as per provisions of Sales of Goods Act 1930, under the provisions of section 41 and 42, it is the responsibility of buyer to examine the goods before accepting the delivery. Section 41 clearly mandates that where goods have been delivered to buyer which have not been previously examined, buyer will not deem to have accepted the same unless he has reasonable opportunity of examining the goods to ascertain whether goods are in conformity with contract. However, Section 42 mandates that buyer will deem to have accepted the goods Page 32 of 49 CS (Comm) No.31/2022: Vikas Kumar Vihsnoi, Proprietor M/s Innovative Solutions V/s Siddh Chemiplast Pvt. Limited: DOD: 13.05.2026 when he either actually intimates to the seller regarding acceptance of goods or where he does any act in relation to those goods which is in consistent to the ownership of seller or when after lapse of a reasonable time buyers retains the goods without intimation of rejection of the same. In the present case also, when there were already expressed conditions of sale for inspection of the goods, still there being no communication from defendant for period of about two months since the lastly accepting of goods of printed inlay cards and folders to the effect that there is any defect in the printing work, in view of the conditions of sale and the provisions of section 42 as discussed above, defendant company will deem to have accepted the material without there being any defects."
9. A reading of the aforesaid discussion as also the relevant paras of the impugned judgment of the trial court show that the trial court was justified in arriving at a finding that no objection was raised with respect to invoices upto 31.10.2001. Once never any objection was raised with respect to defective work thus this lack of challenge to defective work became final as against the appellant/defendant by virtue of Section 42 of the Sales of Goods Act.
xxxxx (underlining which is mine emphasized)
(iii) In case reported as, "RFA No.478/2007", titled as, "Charlie Creations Pvt. Ltd. V/s Chahat Creations Pvt. Ltd." (DOD: 06.02.2009), Page 33 of 49 CS (Comm) No.31/2022: Vikas Kumar Vihsnoi, Proprietor M/s Innovative Solutions V/s Siddh Chemiplast Pvt. Limited: DOD: 13.05.2026 the Hon'ble High Court of Delhi has been pleased to lay down as under:
xxxxx
8. The trial court on issue No.2 observed that the liability of six bills came to Rs.19,21,180.78. The payment of Rs.16,67,775/- was made by the defendant, therefore, only a sum of Rs.2,53,405.78 was due and payable by the defendant. It was observed by the learned trial court that under the Sales of Goods Act, the presumption is that if there did not exist any defect in the goods, no counter claim has been set up by the defendant claiming damages to supply defects, it cannot be presumed that deductions are made on the ground of infirmities in the goods.
xxxxx
(iv) Further, the Hon'ble High Court of Delhi in case reported as, "RFA No.479/2006", titled as, "M/s Kumar Industries V/s Suresh Kumar Mittal" (DOD: 10.10.2018) has been pleased to lay down as under:
xxxxx
6. The trial court has rejected the defence of the appellant/defendant, praying for dismissal of the suit, while holding that the appellant/defendant has failed to prove that the said defective goods were returned as the Challan documents/Ex.DW1/1 and Ex.DW1/2 did not bear any signatures on the receipt of the respondent/plaintiff of the alleged defective materials which were claimed to have been returned by the appellant/defendant, owing to the fact that Section 42 of the Sale of Goods Act, 1930 provides that goods are deemed to be accepted if rejection of the goods is not communicated in reasonable period of time. It is noted that for the first Bill no.01 dated 15.05.2000, the reasonable Page 34 of 49 CS (Comm) No.31/2022: Vikas Kumar Vihsnoi, Proprietor M/s Innovative Solutions V/s Siddh Chemiplast Pvt. Limited: DOD: 13.05.2026 period would be one month i.e. up to 15.06.2000, and for the Bill no.07 dated 10.07.2000 the period of one month would expire on 10.08.2000 and for the third Bill no.011 dated 30.9.2000 the period would expire on 30.10.2000. Admittedly, in these periods of 30 days after receipt of the goods, no intimation has been proved by the appellant/defendant which they have served upon the respondent/plaintiff in terms of Section 42 of Sale of Goods Act about the goods supplied by the respondent/plaintiff to the appellant/defendant of being defective. Even the so-
called Challans Ex.DW1/1 and Ex.DW1/2 which in any case have not been proved to show the return of goods by the appellant/defendant to the respondent/plaintiff with the fact that these Challans are dated 30.03.2001, and the date of 30.03.2001 is not a reasonable period as per Section 42 of the Sale of Goods Act, and therefore, the trial court in my opinion has rightly held that the appellant/defendant is deemed to have accepted the goods.
xxxxx
50. In case reported as, "Co.Appeal No.11/2017", titled as, "Unique Engineers Pvt. Ltd. V/s Nitya Elecrocontrols Pvt. Ltd." (DOD:
15.02.2018), the Hon'ble High Court of Delhi has been pleased to lay down as under:
xxxxx
7. Credit and debit notes have been used in trade for a long time as acknowledgment of dues and debt; and are often relied on in commercial cases.
Issue of credit and debit notes is convenient when the transaction between two commercial entities is not episodic or discrete but continuous, and adjustments in ledgers with settlement effects are Page 35 of 49 CS (Comm) No.31/2022: Vikas Kumar Vihsnoi, Proprietor M/s Innovative Solutions V/s Siddh Chemiplast Pvt. Limited: DOD: 13.05.2026 made at intervals. However, the Court has to look into the notes with circumspection when they are disputed and raised after great delay because there is every possibility of the same being raised frivolously and falsely to deny the claim of the other side. Hence, whenever dispute regarding debit note is raised, more specifically in defence to a claim, the Court is bound to look into the manner, the time as well as the mechanism of raising such debit notes along with the correspondence, objections if any, acknowledgment, bills, receipts, account books etc., since false, fictitious and sham debit notes not only deny the rightful claim of the other party, but also shake and effect commerce.
8. A bare perusal of the debit notes of the appellant clearly demonstrates that all of them bear the same date 31.3.2016. Debit notes mention a round figure, without any details of the short supply or the defective goods. There is no explanation on record as to why the respondent was not intimated about the short supply in the material immediately and why these debit notes were not raised when supply was made. The defence of the appellant, that in view of the Warranty Clause contained in the purchase order, debit notes were not raised immediately, is untenable and an after-thought. Warranty Clause cannot justify belated issue of debit notes. Warranty Clause had a different purpose. Warranty claims had to be made within 15 months, with details. Short supply was within the purview of the Warranty Clause.
9. Sections 41 and 42 of the Sale of Goods Act, 1930 ("Act") give a right to the buyer to inspect the goods before accepting them and if he or she does Page 36 of 49 CS (Comm) No.31/2022: Vikas Kumar Vihsnoi, Proprietor M/s Innovative Solutions V/s Siddh Chemiplast Pvt. Limited: DOD: 13.05.2026 not have any objection qua its quality or short supply within a reasonable time, the buyer is deemed to have accepted the goods without demur. Reasonable time is a question of fact, as per Section 63 of the Act, and cannot be as long as claimed by the appellant, and as rightly held by the learned Single Judge. In view of the aforesaid discussion and the fact that the appellant has raised the plea of debit notes after about 2½ years clearly proves that the debit notes raised are false and sham. Aforesaid defence regarding debit notes has been raised by the appellant in the Court to deny its liability regarding the balance due to the respondent. Hence, we fully agree with the findings of the learned Single Judge that the appellant has neglected to pay the balance due to the respondent without any cogent, substantial or genuine cause. Therefore, it cannot be said that the appellant has the ability to pay but has chosen not to pay or that it has a lesser liability to pay.
10. Accordingly, we do not find any flaw or infirmity in the impugned order dated 4.8.2017.
xxxxx
51. Now, it also has to be seen whether the defendant has been able to prove the mode through which the Debit Notes were communicated to the plaintiff. The defendant has placed on record the carbon copies of the courier receipts so as to show that it had allegedly served the debit notes to the plaintiff. The said courier receipts are being dealt hereunder:-
(a) Ex.DW-1/5-carbon copy of the courier receipt dated 22.03.2017 (document No. 99 of the defendant's document):-
The defendant has not filed the tracking report in relation to Page 37 of 49 CS (Comm) No.31/2022: Vikas Kumar Vihsnoi, Proprietor M/s Innovative Solutions V/s Siddh Chemiplast Pvt. Limited: DOD: 13.05.2026 the said courier receipt to show that the same was ever delivered to the plaintiff by way of the said courier. The plaintiff has categorically denied in its cross-examination that the said courier was ever received by the plaintiff. The defendant has not produced or summoned any witnesses of the courier company to prove that the said courier was delivered to the plaintiff. The defendant has also never pleaded in its entire pleadings or evidence that the said courier was ever delivered to the plaintiff. There is no averment to this effect in the entire pleadings and evidence of the defendant. Further, merely filing of the courier receipt would not mean that the courier was actually sent. The address of the recipient has not been mentioned in such courier receipt. It is stated that merely sending the same by courier would not unimpeachably prove that the said courier was ever delivered as mere posting of the courier would not amount to delivery of such courier. The defendant has also failed to file any online record of the courier company to show that the same was returned back as refused to be taken by the plaintiff. In view of the above, the courier receipts filed by the defendant are not proved.
(b) Ex.DW-1/11 - carbon copy of the courier receipt dated 07.01.2019 (documents No.68, 69 and 100 of the defendant's documents):-
The said courier receipts have been designated to be delivered Page 38 of 49 CS (Comm) No.31/2022: Vikas Kumar Vihsnoi, Proprietor M/s Innovative Solutions V/s Siddh Chemiplast Pvt. Limited: DOD: 13.05.2026 to one `Eurasia Poly Chem' and not the plaintiff. The defendant has not filed the tracking report in relation to the said courier receipt to show that the same was ever delivered to the alleged recipient or to the plaintiff by way of the said courier. The plaintiff has categorically denied in its cross- examination that the said courier was ever received by the plaintiff. The defendant has not produced or summoned any witnesses of the courier company to prove that the said courier was delivered to the alleged recipient or to the plaintiff. The defendant has also never pleaded in its entire pleadings or evidence that the said courier was ever delivered to the alleged recipient or to the plaintiff. There is no averment to this effect in the entire pleadings and evidence of the defendant. Further, merely filing of the courier receipt would not mean that the courier was actually sent. The address of the recipient has not been mentioned in such courier receipt. It is stated that merely sending the same by courier would not unimpeachably prove that the said courier was ever delivered as mere posting of the courier would not amount to delivery of such courier. The defendant has also failed to file any online record of the courier company to show that the same was returned back as refused to be taken by the alleged recipient or by the plaintiff. In view of the above, the courier receipts filed by the defendant are not proved.Page 39 of 49
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(c) Ex.DW-1/11 - carbon copy of the three courier receipts - all dated 11.05.2019 (document No. 101 of the defendant document):-
The defendant has not filed the tracking report in relation to the said courier receipt to show that the same was ever delivered to the plaintiff by way of the said courier. The plaintiff has categorically denied in its cross-examination that the said courier was ever received by the plaintiff. The defendant has not produced or summoned any witnesses of the courier company to prove that the said courier was delivered to the plaintiff. The defendant has also never pleaded in its entire pleadings or evidence that the said courier was ever delivered to the plaintiff. There is no averment to this effect in the entire pleadings and evidence of the defendant. Further, merely filing of the courier receipt would not mean that the courier was actually sent. The address of the recipient has not been mentioned in such courier receipt. It is stated that merely sending the same by courier would not unimpeachably prove that the said courier was ever delivered as mere posting of the courier would not amount to delivery of such courier. The defendant has also failed to file any online record of the courier company to show that the same was returned back as refused to be taken by the plaintiff. In view of the above, the courier receipts filed by the defendant are not proved.Page 40 of 49
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52. (i) The learned counsel for the defendant has very vehemently argued that E.Mail dated 12.10.2016 (part of Ex.DW1/16 Colly) shows that the defect in goods was communicated to the plaintiff. Let us analyze the said E.Mail. The said e-mail has been printed from one e-mail i.e. [email protected] and the same has not emanated from the official e-mail of the defendant. The said email id is not the e-mail id of the defendant company and the defendant has not been able to explain the same. The defendant has further not been able to explain as to what has been sought to be communicated to the alleged e-mail. The defendant has filed a false Certificate U/s. 63 of Bhartiya Sakshya Adhiniyam to the effect that the alleged e-mails have been stored and was in the possession of the defendant whereby in the said Certificate it has been certified by the witness Mr. Neeraj Kumar Jain (DW-1) that, "the printouts of the GST registration certificate of the defendant, ledger accounts of plaintiff maintained by the defendant and emails sent to plaintiff by defendant are computerized printouts and the same have been generated from the computer installed at the office of the defendant and its contents confirm to the records and are true to the best of my knowledge...........".
(ii) Thus, it is evident that the defendant has filed a false Certificate and is liable to be prosecuted under relevant provisions of law. In view of the above, the said e-mail print outs are not admissible as evidence in the eyes of law.
(iii) The said facts are also clearly applicable to the e-mail dated 27.03.2018 at page No. 104, e-mail dated 02.09.2019 at page No. 107 and e-mail dated 05.09.2019 at page No. 108. The defendant has failed to Page 41 of 49 CS (Comm) No.31/2022: Vikas Kumar Vihsnoi, Proprietor M/s Innovative Solutions V/s Siddh Chemiplast Pvt. Limited: DOD: 13.05.2026 prove the said e-mails, which were electronic records and the certificate U/s 63 of Bhartiya Sakshay Adhiniyam is defective.
53. Therefore, it is abundantly clear that the defendant has miserably failed to prove the Debit Notes Ex.DW1/3 and Ex.DW1/4. It is further noteworthy that the defendant has failed to show in its final accounts, balance sheet and income tax returns that any amount was due and outstanding to be payable by the plaintiff to the defendant. The defendant was confronted as to whether it had shown the alleged Debit Notes in its books of accounts. The defendant was put the questions from question No. 57 to question No. 67 regarding the entries of such debit notes in the balance sheet/profit and loss account for the financial years 2015-16, 2016-17 and 2018-19, however, the defendant could not show the said debit notes in the books of accounts of the defendant. As if this was not enough, the other relevant part of cross-examination of DW-1 is also very interesting, which is as under:
(a) For the financial year 2015-16, the defendant was asked Q.No.57, as to where the amount of credit note received has been shown from Bajaj in P & L account wit has been shown under the 'Head of rate difference [rejected material]' (marked at P to P1 on page 17 of ExDW1/PX1);
(b) A further question was put by way of Q.No.58 that 'Is it correct that any debit notes issued by you in respect of any material of any party are shown under the same head of rate difference [rejected material], whereby the witness answered in affirmative and stated that the Debit Page 42 of 49 CS (Comm) No.31/2022: Vikas Kumar Vihsnoi, Proprietor M/s Innovative Solutions V/s Siddh Chemiplast Pvt. Limited: DOD: 13.05.2026 Notes, if any, are mentioned in the other income group head under which the sub-head of rate difference [rejected material] comes as well as the same may come in any other sub-heads under the other income group;
(c) The defendant also affirmed in answer to Q.No.59 that the debit notes are booked under the Head Other income Group in the corresponding year;
(d) The defendant was put Q.No.64 and asked to show and mark the debit noted dated 21/03/2017 in P and L account for 2016-17 whereby the DW answered that the amount of Rs. 15 lakhs is included in the other Income group Head because all the debit notes and credit notes including plaintiff's debit note are part of the other income group head and mentioned as consolidated [net value] for the whole financial year.
Thereafter the defendant's witness was confronted in Q.No.65 with entry at Page No.58 marked as P2 to P3, being P and L account, whereby the credit notes issued against the defendant were shown separately and the net value of the debit note and credit note as alleged was wrong whereby the defendant gave evasive reply. The defendant was unable to show the Debit Note, dated 21.03.2017 of Rs.15,00,000/- in the P and L account for the financial year 2016-17 as the entries even if taken as net or individually did not match and the same was lower under any Heads. Thus, there were grave discrepancies and the defendant was unable to show said debit note in the final accounts;
(e) Similarly, for the Debit Note dated 03.04.2018, the defendant was asked Q.No 66, whereby the witness showed the entry at Page No.147 marked as P3 to P4 and the witness stated that there is a difference of Page 43 of 49 CS (Comm) No.31/2022: Vikas Kumar Vihsnoi, Proprietor M/s Innovative Solutions V/s Siddh Chemiplast Pvt. Limited: DOD: 13.05.2026 Rs.10,500/- due to issuance of some credit note. The witness was then confronted with the entry at page no 149 for P and L account for 2018-19 marked as P5 to P6 to show that the credit notes against the defendant were shown to which the defendant gave evasive reply. The defendant thus made contradictory statement and was unable to show or prove the alleged debit dated 03/04/2018 in the books of accounts for financial year 2018-19 or show its inclusion under any head; and
(f) The defendant had failed to place on record any ledger account to show such entry under any head including 'Other Income Head' so as to show the inclusion of Debit Notes dated 21.03.2017 and 03.04.2018.
54. Therefore, the defendant has miserably failed to prove Debit Notes Ex.DW1/3 and Ex.DW1/4.
55. The learned counsel for the plaintiff has placed strong reliance upon the decision of Hon'ble High Court of Delhi in case reported as, "RSA No.40/2013", titled as, "Satyapal V/s Slick Auto Accessories Pvt. Ltd. & Ors." (DOD: 05.03.2014), the facts of which were almost similar to the case in hand. The operative part of said judgment reads as under:
xxxxx
7. So far as the merits of the matter are concerned, the case of the respondent no.
1/defendant no. 1 was that the goods being PVC compound supplied by the appellant/plaintiff were defective, and therefore, appellant/plaintiff is not entitled to payment of the price of the goods Page 44 of 49 CS (Comm) No.31/2022: Vikas Kumar Vihsnoi, Proprietor M/s Innovative Solutions V/s Siddh Chemiplast Pvt. Limited: DOD: 13.05.2026 supplied vide bill no. 107 for Rs. 32,960/- and bill no. 109 for Rs. 65,920/- dated 7.7.2007 and 16.7.2007 respectively. In this regard, again the trial court by its exhaustive, thorough and analytical judgment has held that respondent no.1/defendant no.1 failed to prove that the goods supplied were defective. For this purpose, the trial court has given various reasons. The first reason which is given is that the respondent no. 1/defendant no. 1 relied upon a letter dated 18.9.2007 Ex. DW-1/B written to the appellant/plaintiff of the goods being defective, however, the said letter is not proved as having been served upon the appellant/plaintiff because neither there is any acknowledgement on the same of the plaintiff nor the letter was sent by post to the plaintiff and PW-1 has unequivocally denied the suggestion that the letter was received. Therefore, once there is absolutely no document filed and proved to show that the respondent no.1/defendant no.1 complained to the appellant/plaintiff of the goods being defective, trial court was justified in holding that the goods were not defective.
8. The relevant observations of the trial court are contained in paras 37 and 38 of the impugned judgment which read as under :
"37. Adverting to the facts of the present case the defendants have further contended that letter dated 18.09.2007 was handed over to the plaintiff, when he approached the defendants for the payment whereby the defendants complained regarding defective PVC beading supplied vide bills Ex. PW1/A and Ex. PW1/B. The said letter dated 18.09.2007 is Ex. DW1/B. There is Page 45 of 49 CS (Comm) No.31/2022: Vikas Kumar Vihsnoi, Proprietor M/s Innovative Solutions V/s Siddh Chemiplast Pvt. Limited: DOD: 13.05.2026 nothing on record to show that the said letter was received by the plaintiff. The said letter does not bear any acknowledgement of the plaintiff. It is not the case of the defendant that the said letter was sent by post to the plaintiff. PW-1 has unequivocally denied the suggestion that he had received the said letter.
38. Moreover DW-1 had admitted in his cross-examination that Ex. DW1/B does not bear the signatures of the plaintiff. He further stated that the letter dated 18.09.2007 was not issued in his presence. Once the letter was not issued in his presence it is clear that DW-1 is not competent to prove the said letter.
Moreover, at any rate even from the testimony of the DW-1 it is not established that the said letter was in fact delivered to/received by the plaintiff and hence there is no evidence to show that the defendants had informed the plaintiff that they are not accepting the goods or they have rejected the goods supplied by the plaintiff."
(underlining added)
9. The second reason given by the trial court to hold that the goods supplied were not defective was that the respondent no.1/defendant no.1 has not filed any document on record showing complaints from buyers of the finished products prepared by using of PVC material of goods being defective, and who would have complained if the goods were defective.
Page 46 of 49CS (Comm) No.31/2022: Vikas Kumar Vihsnoi, Proprietor M/s Innovative Solutions V/s Siddh Chemiplast Pvt. Limited: DOD: 13.05.2026 The PVC compound supplied was used for preparing helmets and no communication was there besides from the dealers of the respondent no.1/defendant no. 1 also from any helmet user of any defect. I completely agree with this conclusion of the trial court and which is contained in para 32 of the impugned judgment and which read as under :
"32. No documents have been placed on record to establish this fact. No communication between the defendants and their respective dealers in this respect has been proved. No communication between the helmet users and the dealers of the defendants has been proved. No complaint registered by any helmet user or by any dealer of the defendants has been proved. Further more DW-1 stated in his cross examination that he cannot tell the time and date when he came to know that the PVC beading was defective. He further stated that he cannot tell the exact time and date when the PVC beadings were used and returned by the users and dealers of the defendants. No statements of account or other documentary evidence has been proved to show that the defendants refunded any amount to the dealers on account of defective helmets or that any defective helmets were returned to the defendants by their dealers or any helmet users."
(underling added)
10. The third reason which has been given by the Page 47 of 49 CS (Comm) No.31/2022: Vikas Kumar Vihsnoi, Proprietor M/s Innovative Solutions V/s Siddh Chemiplast Pvt. Limited: DOD: 13.05.2026 trial court to hold that the goods were defective is by placing reliance under Sections 41 and 42 of the Sales of Goods Act, 1930 as per which once after a reasonable period of time the buyer does not complain about the goods but in fact utilizes the goods, the buyer such as the respondent no.
1/defendant no. 1 is prevented from raising any objection as to the quality of the goods.
xxxxx (underlining which is mine emphasized)
56. The law laid down in the above judgment applies on all fours in this case.
57. In view of the above discussion, issue No.(i) is decided against the defendant while issue No.(ii) is decided in favour of plaintiff.
58. Issue No.(iii):
If answer to aforesaid issue is in affirmative, whether the plaintiff is entitled to interest thereupon. If so, at what rate and for what period? OPP.
As regards the quantum of interest, considering the business/commercial transactions between the parties has prayed for grant of interest @18% per annum on the outstanding amount. Though, the transactions between the parties is commercial in nature, however, I am of the considered opinion that grant of interest @18% per annum as interest pendentelite and future is on higher side and instead grant of interest @12% per annum would meet the ends of justice. I order accordingly.Page 48 of 49
CS (Comm) No.31/2022: Vikas Kumar Vihsnoi, Proprietor M/s Innovative Solutions V/s Siddh Chemiplast Pvt. Limited: DOD: 13.05.2026 Relief
59. In view of the above, suit of the plaintiff is decreed as under:
(i) A decree in the sum of Rs.31,53,723/- (Rupees Thirty One Lakhs Fifty Three Thousand Seven Hundred Twenty Three Only) alongwith pendentelite and future interest @12% per annum with effect from the date of filing of suit till realization thereof is passed in favour of plaintiff and against the defendant.
(ii) Plaintiff is also held entitled to counsel's fee which is quantified as Rs.1,00,000/- (Rupees One Lakh Only) as also actual costs.
60. Decree Sheet be drawn accordingly.
61. File be consigned to Record Room after completion of necessary formalities.
Digitally
signed by
VINOD VINOD YADAV
Date:
YADAV 2026.05.13
16:56:24
+0530
Dictated & Announced in the (Vinod Yadav)
open Court on 13.05.2026 District Judge (Commercial Court)-02
North-West/Rohini Court
Page 49 of 49