Delhi District Court
Sumita Aggarwal Prop M/S Shiv Agencies vs Pepsico India Holdings Private Limited on 28 March, 2025
BEFORE THE COURT OF SH. SURINDER S. RATHI, DISTRICT JUDGE
(COMM.)-11 CENTRAL, THC, DELHI
CS Comm. No.556/2021
Sumita Aggarwal
Proprietor M/s Shiv Agencies
Through her AR
Pawan Aggarwal
At: Property No. 7479-A, Old and
9937, Sarai Rohilla, New Rohtak
Road, New Delhi-110005
Also at:
H.No.635, Sector 12, Friends Society
Vasundhara, Ghaziabad-201012 ..............Plaintiff
Vs.
M/s Pepsico India Holdings Private Ltd.
Through its CEO/MD/Director
Office at : Level 3-5, Pioneer
Square, Sector-62, Near Golf Course
Extension Road, Gurugram-122001 ...........Defendant
Date of Institution : 12.02.2021
Date of Final Arguments : 28.03.2025
Date of Judgment : 28.03.2025
Decision : Dismissed
Judgment
1.This suit is filed by plaintiff for seeking reliefs of declaration, recovery of money, rendition of account, damages apart from injunction against the defendant company, plaintiff being distributor of defendant's products. Case of the Plaintiff
2. Case of the plaintiff as per amended plaint and the documents filed is that plaintiff is proprietor of M/s Shiv Agencies at Sarai Rohilla, New Delhi while defendant is a duly incorporated private ltd. Company at Gurugram, Haryana which is manufacturer of consumable snacks like Lays, Kurkure, CS Comm No.556/2021 Page 1 of 27 Sumita Aggarwal (Proprietor of M/s Shiv Agencies Vs. M/s Pepsico India Holdings Private Ltd.) Uncle Chips, Quacker, Oats etc. In the course of business in the year 2017 defendant company appointed plaintiff as Single Distributor Platform (SDP) for Central Delhi for selling defendant's products. A detailed contract was entered. An undated contract in 2017 which was a pre- printed format shared with the plaintiff. It was signed and stamped by the plaintiff and delivered to the defendant but no signed copy thereof was shared by the defendant.
3. It is pleaded that as per the above contract there was no tenure for the distributorship. It is pleaded that while entering of contract negotiations were held with employees of the defendant namely Sh. Pankaj Kar, Sh. Manoj Sachdeva and Ms. Gitanjali Arora on 07.10.2017 and emails were exchanged qua the same. Plaintiff's annual turnover was said to be Rs.21 crores with average margin of 7.31% subsequently finalised at 7.90%. Thereafter, goods were supplied by the defendant to the plaintiff. Defendant assigned pre-sales representatives to the plaintiff. Plaintiff was supposed to pay salaries to them which was agreed to be reimbursed by the defendant subsequently. Under the agreement the defendant used to sell the products to the plaintiff on wholesale basis against full advance money which was to be distributed within the assigned territory under strict control and monitoring of the defendant's staff.
4. For this purpose defendant also installed a copyright SAMNA software in the plaintiff's computer which was supposed to track the orders, supplies, raising invoices, tracking orders as also for generating reports. This software was hosted by defendant company for the business purpose. Plaintiff took on rent warehouse. A whatsapp group was also formed by Sh. Rajkumar of defendant company and all orders were placed in the said group. On 24.08.2020, Sh. Rajkumar Sharma sent the email with respect to business performance of the year 2020 citing that the business is CS Comm No.556/2021 Page 2 of 27 Sumita Aggarwal (Proprietor of M/s Shiv Agencies Vs. M/s Pepsico India Holdings Private Ltd.) declining, sales persons are not available and supply chains are irregular. Plaintiff claims to have sent replies on 25.08.2020, 01.09.2020 and 15.09.2020 citing that despite covid related lockdown plaintiff is striving to maintain the sales. It is pleaded that plaintiff's capacity to sell was wholly dependent on defendant's staff and their supply capacity. Plaintiff aired concerns with the defendant on 16.09.2020 as well qua short supply of material from the defendant's side. Another email was sent on 01.10.2020 claiming that only 35% of the material ordered is being supplied. Similar emails were sent on 02.11.2020 as well.
5. Instead of responding to plaintiff's emails, on 02.11.2020, defendant is said to have terminated the agreement with the plaintiff by serving her a 60 days notice. Plaintiff was asked to proceed for full and final settlement by reconciliation of books and by returning SAMNA handheld device. Only a scanned copy of this notice was sent while no hard copy was served. It was reverted by the plaintiff on 03.11.2020 where plaintiff demanded an opportunity of being heard followed by other emails dated 04.11.2020. On 05.11.2020 plaintiff visited the defendant's office with her husband but was apprised that a meeting on Zoom platform will be organised but still no meeting was organised. Plaintiff wrote another email on 09.11.2020 to employees of the defendant apart from reminders dated 17.11.2020, 18.11.2020, 19.11.2020, 20.11.2020, 23.11.2020, 24.11.2020, 25.11.2020, 26.11.2020. Plaintiff claims to have approached Code of Conduct Committee of the defendant who gave a hearing to the plaintiff but things remained inconsequential.
6. During this period plaintiff continued to place orders, deposit advance money with defendants and supplies were received from the defendants. It is pleaded that while business continued normally even after 02.11.2020 on 03.01.2021 defendant company sent an email alongwith the scan of the CS Comm No.556/2021 Page 3 of 27 Sumita Aggarwal (Proprietor of M/s Shiv Agencies Vs. M/s Pepsico India Holdings Private Ltd.) letter replying the repeated emails sent by the plaintiff to the defendant alleging short supply by contending that there was no short supply. It was alleged that plaintiff's performance was poor and there was several issues relating to inadequacy of pre-sale representatives apart from delivery issues leading to loss of business. Defendant termed the plaintiff as a non- performer in the last year. However, it was admitted that plaintiff was entitled to 7.90% margin.
7. According to plaintiff this letter was aimed at filling up the lacuna in the notice dated 02.11.2020 whereby her distributorship was terminated. According to the plaintiff above conduct of the defendant show that her distributorship has not been terminated vide notice dated 02.11.2020 and is still operational. Through some sales data mentioned in para 37 plaintiff tried to portray that she achieved more than 90% sales target during 2017- 18, 2018-19 and 2019-2020.
8. In this backdrop, according to plaintiff she is entitled to recovery of Rs.25,51,486/- alongwith interest for sales carried out on the asking of defendant. Perusal of plaint shows that no mandatory Pre-Institution Mediation as per Section 12A of Commercial Courts Act, 2015 was carried out as there is no reference of the same qua either carrying out of the same or justifying non-carrying out of the same. Upon being asked, Ld. Counsel for plaintiff submits that plaintiff has filed application under Order 39 Rule 1 and 2 CPC seeking direction against the defendant to take back the handheld devices and reconcile the details stored therein apart from sharing the original documents. It is pleaded that a separate application was filed for seeking exemption from Pre-Institution Mediation whcih was considered and allowed by Ld. Predecessor on 12.02.2021. In this backdrop plaintiff has filed this suit for following reliefs:
CS Comm No.556/2021 Page 4 of 27Sumita Aggarwal (Proprietor of M/s Shiv Agencies Vs. M/s Pepsico India Holdings Private Ltd.) Prayer:
i. Be pleased to issue a decree of declaration in favour of Plaintiff and against the Defendant thereby declaring the Termination notice dated 02.11.2020 as issued by Defendant as ab initio null and void, illegal, invalid, malafide, non est in the eyes of law thereby setting it aside;
ii. Be pleased to issue a decree of declaration in favour of Plaintiff and against the Defendant thereby declaring the Termination notice dated 02.01.2021 as issued by Defendant as ab initio null and void, illegal, invalid, malafide, non est in the eyes of law thereby setting it aside;
iii. Be pleased to issue a decree for recovery to the effect that Plaintiff is entitled to recover a sum of Rs.25,51,486/-, due upon Defendant towards Business receivables, along with pendent lite interest in relation to commercial transaction on the said amount within the meaning of Section 34 of CPC or as deemed proper by this Hon'ble Court, in favour of Plaintiff and against the Defendant;
iv. Be pleased to issue a decree for recovery to the effect that Plaintiff is entitled to recover a sum of Rs.10,00,000/-, from the Defendant, towards loss of Security Deposit/damage caused to plaintiff due to illegal act of Defendant, along with pendent lite interest in relation to commercial transaction on the said amount within the meaning of Section 34 of CPC or as deemed proper by this Hon'ble Court, in favour of Plaintiff and against the Defendant;
v. Be pleased to issue a decree for recovery to the effect that Plaintiff is entitled to recover a sum of Rs.59,94,140/-, from the Defendant, towards loss of established/agreed business income/damages caused due to breach on the part of Defendant, along with pendent lite interest in relation to commercial transaction on the said amount within the meaning of Section 34 of CPC or as deemed proper by this Hon'ble Court, in favour of Plaintiff and against the Defendant;
vi. Be pleased to issue a decree for recovery to the effect that Plaintiff is entitled to recover a sum of Rs.5,95,000/-, from the Defendant, towards compensation, along with pendent lite interest in relation to commercial transaction on the said amount within the meaning of Section 34 of CPC or as deemed proper by this Hon'ble Court, in favour of Plaintiff and against the Defendant;
vii. Be pleased to pass a preliminary decree for rendition of accounts therreby directing the Defendant to make accounts and disclose the amounts of plaintiff due upon the Defendant, in favour of the plaintiff and against the Defendant;
viii. Be pleased to pass a final decree on the amounts/account so disclosed by the defendant after making accounts for the payments of such amounts to the Plaintiff along with pendent lite interest in relation to commercial transaction on the said amount within the meaning of Section 34 of CPC or as deemed proper by this Hon'ble Court, in favour of Plaintiff and against the Defendant;
ix. Be pleased to award cost of the suit in favour of Plaintiff and against the Defendant; x. Be pleased to grant any other such relief, as this Hon'ble Court deems fit and proper, in the interests of justice in favour of the plaintiff and against the defendant,
9. Summons of the suit was served on the defendant and detailed WS was filed on behalf of defendant.CS Comm No.556/2021 Page 5 of 27
Sumita Aggarwal (Proprietor of M/s Shiv Agencies Vs. M/s Pepsico India Holdings Private Ltd.) Defendant's Case
10.Case of the defendant as per WS filed on 01.04.2021 and the documents filed is that the termination of Distributorship Agreement was valid and legal. It is pleaded that as per Clause 19 (b) of the agreement only a thirty days clear notice in writing was required whereas plaintiff was given 60 clear days notice so that both the sides can carry out full and final settlement. No fixed time period or perpetuity clause was in existence and the agreement was terminable on will of both the sides or on happening of predecided eventuality.
11.It is pleaded that plaintiff filed the suit in hand within 36 days of date of expiry of 60 days notice period which expired on 02.01.2021 (wrongly typed in the WS as 02.01.2020). It is pleaded by defendant that they were well within their right to terminate the agreement and were not required to assign any reason for the same. It is pleaded that the defaults and breaches committed by the plaintiff were reported to her which included her failure to maintain robust infrastructure in terms of sufficient manpower, failure to have adequate no. of sales representative, failure to deploy vehicles for distribution or fulfulling annual operational plan. It is due to this continuous non-performance during the around three and a half years period. It is elaborated that as against 13 sales representatives only 9 were deployed. Through a table it is shown that performance during 2018-2020 was below par.
12.In its reply to the plaint on merits it is not denied that plaintiff was appointed distributor by the defendant company in 2017. It is denied that plaintiff was sent a pre-printed agareement which was signed and stamped by plaintiff and sent back to defendant. There is no reply to the contention that countersigned agreement was not shared by the defendant with the plaintiff despite repeated requests. The above para 5 of the plaint as CS Comm No.556/2021 Page 6 of 27 Sumita Aggarwal (Proprietor of M/s Shiv Agencies Vs. M/s Pepsico India Holdings Private Ltd.) replied in the WS does not adhere to laws of the pleadings as per Order 8 Rule 3A CPC and Order 8 Rule 5 CPC as applicable to Commercial Courts. Not only the denial is evasive but no reason thereof is cited and defendant had not shared its version. It is not denied that the contract did not carry any termination notice.
13.It is admitted that upon negotiation defendant assured plaintiff a margin of 7.90% on an annual turnover of Rs.21 crores but they were dependent on various factors such as infrastructure etc., at the end of plaintiff. It is not denied that plaintiff was supposed to pay salary to sales representatives and plaintiff was to be reimbursed by defendant. However, it is denied that these representatives were to be supplied by the defendant. Defendant has not denied that a whatsapp group was formed by the employee of defendant for placing orders. However it is added that this was created as a stop-gap arrangement since plaintifff was not able to handle SAMNA devices. Communications exchanged between the parties via email are not denied.
14.It is denied that defendant was able to supply only 35% of the quantities ordered by plaintiff. Issuance of repeated emails by the plaintiff to the defendant between 24.08.2020 and 02.11.2020 are not denied. It is not denied that plaintiff approached Code of Conduct Committee. It is pleaded that the turnover mentioned in the contract was only a projection and was valid for the year 2017 alone. It is denied that defendant is liable to pay plaintiff a sum of Rs.10 lakhs claimed to have been deposited by the plaintiff to the landlord of the godown. It is denied that defendant ever asked the plaintiff to sell good to third parties on credit basis or that defendant is liable to pay a sum of Rs.25,51,486/-. It is denied that plaintiff is entitled to receive any money whatsoever and dismissal of the suit is prayed.
CS Comm No.556/2021 Page 7 of 27Sumita Aggarwal (Proprietor of M/s Shiv Agencies Vs. M/s Pepsico India Holdings Private Ltd.)
15.Affidavit of admission denial of plaintiff's documents is filed whereby agreement of distributorship, copy of termination notice apart from emails have been admitted. The rent deed qua the godown leased by plaintiff is denied. Proof of whatsapp group is also denied. Statement of account maintained by plaintiff is denied as well.
Replication
16.Separate replication was filed by plaintiff wherein she reiterated her pleaded case and denied the averments of the defendant.
17. Out of the pleadings following issues were identified by Ld. Predecessor on 23.07.2024:
Issues:
1. Whether the plaintiff is entitled to the relief of declaration that the termination notice dated 02.11.2020 issued by the defendant is ab initio null and void, illegal, invalid, malafide and non est in the eyes of law? OPP
2. Whether the plaintiff is entitled to the relief of declaration that the letter dated 02.01.2021, issued by the defendant is ab initio null and void, illegal, invalid, malafide and non est in the eyes of law?OPP
3. Whether the plaintiff is entitled to claim an amount of Rs. 25,51,486/-
along with interest towards alleged business receivables? OPP
4. Whether the plaintiff is entitled to claim an amount of Rs. 10,00,000/- towards alleged loss of security deposit along with interest? OPP
5. Whether the plaintiff is entitled to claim Rs. 59,94,140/- towards alleged loss of established business? OPP
6. Whether the plaintiff is entitled to claim an amount of Rs. 5,95,000/- towards compensation along with interest? OPP
7. Whether the plaintiff is entitled to a sum of Rs. 3,20,000/- along with interest from the defendant towards rent? OPP
8. Whether the plaintiff is entitled to a decree for rendition of accounts? OPP
9. Whether the plaintiff is entitled to claim costs of the suit? OPP
10. Relief.
CS Comm No.556/2021 Page 8 of 27Sumita Aggarwal (Proprietor of M/s Shiv Agencies Vs. M/s Pepsico India Holdings Private Ltd.) Evidence
18. Evidence in this case was ordered to be recorded earlier before Sh.
Manish Kumar, Advocate and later on this case was assigned to Ms. Sabhyata Sharma, Advocate/Ld. LC for recording of evidence as per protocol created by this Court under Order 18 Rule 4 CPC read with Order 15A Rule 6(l) and (o) CPC as applicable to Commercial suits for the sake of timely disposal of this case.
Plaintiff's Evidence
19. To prove her case plaintiff did not step into the witness box and rather examined PW1 Pawan Aggarwal, her Authorised Representative as he was assisting her in the conduct of the business. Vide affidavit Ex.PW1/A he deposed on the lines of plaint and exhibited following documents:
i. Copy of Termination Notice dated 02.11.2020 is Ex.PW1/1; ii. Copy of Scanned Letter dated 02.01.2021, as sent by the defendant on 02.01.2021 and 03.01.2021 along with print of e-mail is Ex.PW1/2;
iii. Copy of Power of Attorney dated 04.02.2021 (OSR) (Objected to Mode of Proof and Admissibility) is Ex.PW1/3;
iv. Copy of Proprietorship Document (Objected to Mode of Proof and Admissibility) is Ex.PW1/4;
v. Copy of Distributorship Agreement with e-stamp dated 19.04.2017 as signed by the plaintiff and delivered to the defendant is Ex.PW1/5; vi. Copy of E-mail dated 07.10.2017 (Objected to Mode of Proof and Admissibility) is Ex.PW1/6;
vii. Copy of various E-mails dated 11.08.2020, 15.09.2020, 09.12.2020 and 14.01.2021(Objected to Mode of Proof and Admissibility) is Ex.PW1/7 (Colly.) viii. Copy of E-mails dated 29.12.2018, 18.03.2019, 05.05.2019 and 09.05.2019 (Objected to Mode of Proof and Admissibility) is Ex.PW1/8 (Colly.) ix. Copy of Registered Rental Agreement (Objected to Mode of Proof and Admissibility) is Ex.PW1/9 (Colly.) x. Printout of the communications of Whatsapp group (Objected to Mode of Proof and Admissibility) is Ex.PW1/10 (Colly.);
xi. Copy of E-mails dated 24.08.2020, 25.08.2020, 01.09.2020, 15.09.2020, 16.09.2020, 01.10.2020 and 02.11.2020 (Objected to Mode of Proof and Admissibility) is Ex.PW1/11 (Colly.) xii. Copy of E-mails dated 03.11.2020, 04.11.2020, 05.11.2020, 09.11.2020, 16.11.2020, 17.11.2020, 18.11.2020, 19.11.2020, 20.11.2020, 23.11.2020, 24.11.2020, 25.11.2020, 26.11.2020, 27.11.2020, 30.11.2020 and 01.12.2020 (Objected to Mode of Proof and Admissibility) is Ex.PW1/12 (Colly.) xiii. Copy of E-mails dated 01.12.2020, 02.12.2020, 03.12.2020, 04.12.2020 and 05.12.2020 (Objected to Mode of Proof and Admissibility) is Ex.PW1/13 (Colly.) xiv. Copy of Reports as generated and compiled from SAMNA software of the defendant showing month-wise turnover from FY 2017-2018 to FY 2020-2021.(Objected to Mode of Proof and Admissibility) is Ex.PW1/14 (Colly.) CS Comm No.556/2021 Page 9 of 27 Sumita Aggarwal (Proprietor of M/s Shiv Agencies Vs. M/s Pepsico India Holdings Private Ltd.) xv. Copy of Statement of Goods sold by the defendant to the plaintiff after 02.11.2020 (Objected to Mode of Proof and Admissibility) is Ex.PW1/15; xvi. Details of material supplied and Copy of Invoices raised after 02.11.2020 (Objected to Mode of Proof and Admissibility) is Ex.PW1/16;
xvii. Copy of E-mails dated 08.01.2021 and 22.02.2021 (Objected to Mode of Proof and Admissibility) is Ex.PW1/17;
xviii. Photos of unsold goods lying with the plaintiff (Objected to Mode of Proof and Admissibility) is Ex.PW1/18;
xix. Copy of Account Statement dated 01.02.2021 (Objected to Mode of Proof and Admissibility) is Ex.PW1/19;
xx. Copy of PEP Vouchers (Objected to Mode of Proof and Admissibility) is Ex.PW1/20; xxi. Copy of Invoice showing amount due towards Quaker Oats along with E-mail dated 13.10.2020 (Objected to Mode of Proof and Admissibility) is Ex.PW1/21; xxii. Copy of receiving taken from PSRs and Dishonored Cheques (OSR) (Objected to Mode of Proof and Admissibility) is Ex.PW1/22;
xxiii. Copy of showcasing GST Retention by the defendant (Objected to Mode of Proof and Admissibility) is Ex.PW1/23;
xxiv. Copy of receiving dated 25.03.2022 issued by the defendant towards return of SAMNA Devices (Objected to Mode of Proof and Admissibility) is Ex.PW1/24; xxv. Photographs and CD containing Photographs and Video of unsold goods being disposed off by the plaintiff after refusal of the defendant to take them back (Objected to Mode of Proof and Admissibility) is Ex.PW1/25;
xxvi. Copy of E-mails dated 03.03.2022, 07.03.2022, 24.03.2022, 25.03.2022, 11.04.2022 and 25.04.2022 (Objected to Mode of Proof and Admissibility) is Ex.PW1/26; xxvii. CD containing data taken from the SAMNA Devices as sent by the defendant to the plaintiff (Objected to Mode of Proof and Admissibility) is Ex.PW1/27; xxviii. Copy of Rent Agreement dated 07.01.2021 along with Rent Receipts in respect of godown / warehouse (Objected to Mode of Proof and Admissibility and the same is not properly stamped and to be impounded) is Ex.PW1/28 (Colly.); xxix. Copy of E-mails dated 23.01.2023, 25.02.2023 and 02.03.2023 (Objected to Mode of Proof and Admissibility) is Ex.PW1/29;
xxx. Copy of document showcasing GST retention and Ledger of the plaintiff from 01.04.2020 to 31.03.2021 (Objected to Mode of Proof and Admissibility) is Ex.PW1/30 (Colly.) xxxi. Certificate under Section 65B of 'The Indian Evidence Act, 1872' (Objected to Mode of Proof and Admissibility) is Ex.PW1/31 to Ex.PW1/33.
20.He was cross-examined at length by Ld. Counsel for defendant Mr. Praveen Pahuja wherein he stated that he is educated up to 12 th. Plaintiff was engaged in distribution business prior to agreement with the defendant for other FMCG products. Plaintiff is said to be suffering from brain related diseases since 2009, however, she is able to understand and is in a position to answer questions. The contract Ex.PW1/5 bears plaintiff's signatures. Plaintiff is assessee to income tax. Witness was unable to disclose the income of the plaintiff between 2017 to 2021. Account books of the plaintiff are regularly audited. At one point it is said that plaintiff maintains books of account which are audited but it is added CS Comm No.556/2021 Page 10 of 27 Sumita Aggarwal (Proprietor of M/s Shiv Agencies Vs. M/s Pepsico India Holdings Private Ltd.) that she does not maintain account of its customers. It is stated that all the sales were carried out by the plaintiff by cash mode only against parchi. It is accepted that the goods supplied with the plaintiff were GST chargeable. He accepted that Clause 19 of agreement Ex.PW1/5 contains a termination clause. It is, however, added that it is the defendant which violated the terms.
21.He accepted that it is the plaintiff alone who was issuing invoices to her customers. He accepted that the expenses under the contract varied from year to year. He also accepted thtat the sales might have dipped as it depends upon various factors which include launch of new products, entry of new players, demand in the area, marketing strategies etc. He accepted that since it was a business it is amenable to losses as well. The estimated figure of Rs.21 crores was arrived at after analysing the scope of business in the area.
22.He adds that annual rent of the warehouse was around Rs.28-30 lakhs. He denied the suggestion that sales representatives were employees of the plaintiff or were under plaintiff's control. He accepted that he has nothing to show that documents of lease of warehouse were shared with the defendant. He accepted that no legal proceedings were intiated by plaintiff against the landlord qua claimed unpaid security amount of Rs. 10 lakhs. He also accepted that there is no provision of forfeiture of security in lease deed Ex.PW2/A. He could not disclose the value of unsold inventory as on 03.01.2021 and stated that it may be less than Rs. 3 lakhs. He also added that the unsold inventory is still lying with her and now stands destroyed.
23.Second witness exmained is PW2 Simratjit, the landlord of the purported warehouse. He exihibited the lease deed of the warhouse of Rohtak Road as Ex.PW2/A. He deposed that he took security deposit of Rs. 10 lakhs CS Comm No.556/2021 Page 11 of 27 Sumita Aggarwal (Proprietor of M/s Shiv Agencies Vs. M/s Pepsico India Holdings Private Ltd.) and subsequently forfeited it. The lease was for a period of 5 years as he has invested Rs. 25 lakhs.
24.Third witness is PW3 Mohit Kumar, Junior Assistant from Department of Trade and taxes and he proved GSTR-1 and GSTR 3B of plaintiff for the period October-November 2020 and January-Februrary 2021.
25.Fourth witness is PW4 Naveen Kumar Bakhta, Manager of Canara Bank. He exhibited the certified copy of plaintiff's bank account for the period 01.06.2018 to 31.12.2018.
26.Fifth witness examined is PW5 Ritu Raj, Deputy Manager, Yes Bank. She exhibited statement of account of plaintiff's another account as Ex.PW5/A to Ex.PW5/D.
27.Defendant on the other hand examined DW1 Manav Khanna, AR. Vide affidavit EX.DW1/A he deposed on the lines of WS. In his cross- examination he accepted that a Distributorship Agreement was entered with the plaintiff. He denied the suggestion that defendant used to ask the plaintiff to supply goods in the market on credit basis or that the plaintiff's Distributorship Agreement was terminated as plaintiff was not supplying adequate credit facility to the buyer. He denied that defendant owes Rs.2.75 to the plaintiff against unsold inventory or Rs.10 lakhs towards loss of security towards warehouse.
28.It is also denied that the plaintiff is entitled to Rs.59,94,140/- towards loss of income towards damage for breach of agreement or another sum of Rs.5.95 lakhhs towards loss of profit in two months post termination.
29. I have heard arguments of Sh. Parveen Semwal, Ld. Counsel for plaintiff and Mr. Praveen Pahuja and Ms. Avni Sharma, Ld. Counsels for defendant and have perused the case file carefully.
30. Now I shall dispose of individual issues framed in this case.
CS Comm No.556/2021 Page 12 of 27Sumita Aggarwal (Proprietor of M/s Shiv Agencies Vs. M/s Pepsico India Holdings Private Ltd.) Issue No. 1:
1. Whether the plaintiff is entitled to the relief of declaration that the termination notice dated 02.11.2020 issued by the defendant is ab initio null and void, illegal, invalid, malafide and non est in the eyes of law? OPP
31.Before embarking the decision on the issues it would be appropriate to cull out admitted facts. It is admitted case of both the sides that plaintiff is in the busines of distribution of FMCG products and defendant is manufacturer and supplier of FMCG consumables. In 2017, upon negotiations Distributorship Agreemnt Ex.PW1/5 was executed between them. Admittedly, there was no fixed tenure or lock in period for this agreemnt. Admittedly, the annual turnover as estimated in 2017 was Rs. 21 crore and the margin assured to the plaintiff was 7.90% subject to several variables like infrastrutrue investment made by plaintiff etc. It is also admitted that the business continued between the parties w.e.f. April 2017 onwards to up to 02.01.2021 while the admitted termination of distributorship notice dated 02.11.2020 was sent on 03.11.2020.
32.It is admitted case of the parties that the goods were supposed to be supplied by the defendant on the basis of orders placed by plaintiff against 100% advance payments and the nature of supply was sale and not akin to stockist or principal-agent relationship. It is also admitted that the sales representatives engaged for the purpose were initially paid salary by the plaintiff which was later on reimbursed by the defendant.
33.As far as termination of the agreement Ex.PW1/5 is concerned, the termaination notice dated 02.11.2020 was served upon the plaintiff dated 03.11.2020. The relevant clause in the Distributorship Agreement Ex.PW1/5 is reproduced hereunder:
Clause 19 : Termination "b. Without prejudice to the right of PIH to terminate the Agreement forthwith as provided in Clause b above, either party shall be entitled to terminate this Agreement any time by giving the other 30 days clear notice in writing which notice may be sent by registered post, or fax addressed to the usual place of business of the addressee, CS Comm No.556/2021 Page 13 of 27 Sumita Aggarwal (Proprietor of M/s Shiv Agencies Vs. M/s Pepsico India Holdings Private Ltd.) without assigning any reason whatsoever and without liability to pay any compensation."
34.Plain reading of the above admitted clause shows that both the parties had unfettered rights to terminate the agreement by issuing a thirty days notice in writing and there was no necessity of citing any reason thereof. It is also added that as and when either of the two terminates the agreement, the other side would not be entitled to termination as well.
35.While opening his submissions Ld. Counsel for plaintiff submits that in Clause 19 (b) and 25 it is provided that the notice for termination of agreement may be sent either by "registered post or by facts or reputable overnight courier, telefascimile with telephone confirmation of the receipt and registered or certified mail postage prepaid". It is submitted that since the termination notice was sent to the plaintiff via email it shall not be treated as valid termination of the agreement since email was never agreed to as a mode of communication between the parties. This plea is opposed by Ld. Counsel for the defendant company with a submission that non-mention of email in the above list of communications is only a coincidental omission when the fax and certified mails have already been included therein. It is submitted that incidentally all the communications between the parties even otherwise were carried out by email alone as evident from the plaint where as many as around 50 emails have been sent by the plaintiff viz. emails Ex.PW1/6 to Ex.PW1/8, Ex.PW1/11 to Ex.PW1/13, Ex.PW1/17, Ex.PW1/26 and Ex.PW1/29.
36.Even otherwise as per Section 66 (a) of Information Technology Act, 2000 where law or a contract provide for carrying out a compliance in a hard copy form, any compliance carried out digitally would be treated as sufficient compliance. As such this Court is not satisfied with the contention of the plaintiff that the notice of termination of agreement was not duly served upon the plaintiff.CS Comm No.556/2021 Page 14 of 27
Sumita Aggarwal (Proprietor of M/s Shiv Agencies Vs. M/s Pepsico India Holdings Private Ltd.)
37.Another plea raised on the issue in hand is that Clause 19 (b) requires for a thirty days clear notice but the notice issued by the defendant actually terminated the agreement w.e.f. 02.11.2020 while the notice sent by an email to the plaintiff via email dated 03.11.2020. It is also submitted that this is clear cut breach of 30 days return notice and as such this deserves to be declared void ab initio, illegal, invalid, malafide and non-est.
38.This plea is opposed by Ld. Counsel for the defendant by referring to the contents of the letter of termination Ex.PW1/1 which is reproduced hereunder:CS Comm No.556/2021 Page 15 of 27
Sumita Aggarwal (Proprietor of M/s Shiv Agencies Vs. M/s Pepsico India Holdings Private Ltd.)
39.In the light of above, content of the termination notice as per Ld. Counsel for defendant there was no immediate termination but rather as against provided 30 days, a 60 days notice was given to the plaintiff and hence no fault can be said to have been committed by the defendant. On the contrary, as per Ld. Counsel for the plaintiff even though it is stated that plaintiff is given 60 days notice but in the very next line it is mentioned that the distributorship stands terminated w.e.f. 02.11.2020. This Court is of the considered view that this line cannot and shall not be read in isolation and shall be read in conjunction with the text appearing prior to the same. Upon reading the entire notice it is evident that a 60 days advance notice was issued and mere reference of termination w.e.f. 02.11.2020 is consequentially rendered inconsequential.
40.Furthermore, the factum of issuance of 60 days advance notice is also discernible from the conduct of the parties whereunder admittedly defendant continued to accepted orders for supply from the plaintiff and goods were regularly supplied after 02.11.2020 onwards till 02.01.2021 when the 60 days period ended. Also, the second email communication sent by the defendant to the plaintiff on 02.01.2021 Ex.PW1/2 also carries a specific reiteration that advance notice for termination of Distributorship Agreement was issued on 02.11.2020 for a period of 60 days. The second notice also carries a specific mention that after 02.01.2021 defendant would not be providing any supplies to the plaintiff.
41.Another submission raised by Ld. Counsel for plaintiff is that the Distributorship Agreement in question was for perpetuity or at least 15-20 years tenure and it was malafidely brought to an end by the defendant company abruptly without any justifiable reason. Upon being asked Ld. Counsel for plaintiff concedes that there is nothing in the contract Ex.PW1/5 which could show that the tenure of the distributorship was for CS Comm No.556/2021 Page 16 of 27 Sumita Aggarwal (Proprietor of M/s Shiv Agencies Vs. M/s Pepsico India Holdings Private Ltd.) perpetuity or for 15-20 years. It is also conceded taht plaintiff does not have any email or document in any form to show that the terms of the above admitted agreement were revised or any corrigendum agreement was entered between the parties.
42.The law on such pleas where a party tries to alter by claiming oral understanding beyond the written terms of the contract is governed by Section 95 of Bhartiya Sakshya Adhiniyam, 2023 (Section 92 of Indian Evidence Act). For ready reference the same is reproduced hereunder:
Section 95 of Bhartiya Sakshya Adhiniyam, 2023: Exclusion of evidence of oral agreement "When the terms of any such contract, grant or other disposition of property, or any matter required by law to be reduced to the form of a document, have been proved according to the last section, no evidence of any oral agreement or statement shall be admitted, as between the parties to any such instrument or their representatives in interest, for the purpose of contradicting, varying, adding to, or subtracting from, its terms:
Proviso (1). -- Any fact may be proved which would invalidate any document, or which would entitle any person to any decree or order relating thereto; such as fraud, intimidation, illegality, want of due execution, want of capacity in any contracting party, want or failure of consideration, or mistake in fact or law. Proviso (2). --The existence of any separate oral agreement as to any matter on which a document is silent, and which is not inconsistent with its terms, may be proved. In considering whether or not this proviso applies, the Court shall have regard to the degree of formality of the document.
Proviso (3). --The existence of any separate oral agreement, constituting a condition precedent to the attaching of any obligation under any such contract, grant or disposition of property, may be proved.
Proviso (4). --The existence of any distinct subsequent oral agreement to rescind or modify any such contract, grant or disposition of property, may be proved, except in cases in which such contract, grant or disposition of property is by law required to be in writing, or has been registered according to the law in force for the time being as to the registration of documents.
Proviso (5). -- Any usage or custom by which incidents not expressly mentioned in any contract are usually annexed to contracts of that description, may be proved: Provided that the annexing of such incident would not be repugnant to, or inconsistent with, the express terms of the contract.
Proviso (6). -- Any fact may be proved which shows in what manner the language of a document is related to existing facts.CS Comm No.556/2021 Page 17 of 27
Sumita Aggarwal (Proprietor of M/s Shiv Agencies Vs. M/s Pepsico India Holdings Private Ltd.)
43.In case titled Smt. Gangabai w/o Rambilas Gilda Vs. Smt. Chhabubai w/o Pukharajji Gandhi, 1981 Latest Caselaw 190 SC dated 06.11.1981 Hon'ble Supreme Court held as under:
"Sub.s (1) of Section 92 declares that when the terms of any contract, grant or other disposition of property, or any matter required by law to be reduced to the form of a document, have been proved according to the last section, no evidence of any oral agreement or statement shall be admitted, as between the parties to any such instrument or theirr representatives in interest, for the purpose of contradicting, varying, adding to, or subtracting from, its terms And the first provisio to Section 92 says thatany fact may be proved which would invalidate any document, or which would entitle any person to any decree or order relating thereto; such as fraud, intimidation, illegality, want of due execution, want of capacity in any contradicting party, want or failure of consideration, or mistake inf act or law. It is clear to us that the bar imposed by sub section (1) of Section 92 applies only when a party seeks to rely upon the document embodying the terms of the transaction. In that event, the law declares that the nature and intent of the transaction must be gathered from the terms of the document itself and no evidence of any oral agreement or statement can be admitted as between the parties to such document for the purpose of contradicting or modifying its terms."
44.In case titled Karan Madaan and ors. Vs. Nageshwar Pandey, 2014 Latest Caselaw 1608 Del dated 26.03.2014 Hon'ble Delhi High Court held as under:
"Section 92 of the Evidence Act, inter alia, provides that where the terms of a grant or other deposition of property have been proved according to Section 91- and in this case the execution and registration of the instrument of sale is not disputed by the defendant, no evidence of any oral agreement, or statement shall be admitted, as between the parties to such instrument, for the purposes of contracting, varying, adding to or subtracting from its terms."
45.The law in this regard is well settled by Hon'ble Delhi High Court. In this backdrop Ld. Counsel for plaintiff has cited printout of an unreported judgement. Even the photocopy sought to be placed on record does not carry any neutral citation. No affidavit of Order 11 Rule 6 CPC is filed to vouch for the genuineness of this judgment claimed to have been downloaded from portal of Hon'ble High Court of Madras. Even otherwise this judgment is not of appellate jurisdiction but is an order of an Original side bench under a CS No. which is based on a cause of action prior to promulgation of Commercial Courts Act, 2015. Perusal of the cited judgment titled Aradhana Distributors pvt. Ltd. vs. Reynold CS Comm No.556/2021 Page 18 of 27 Sumita Aggarwal (Proprietor of M/s Shiv Agencies Vs. M/s Pepsico India Holdings Private Ltd.) India Pvt. Ltd. CS no. 621/2016 by Single Judge of Original Side shows that it does not even discusss Section 92 of Indian Evidence Act. In the absence thereof observations made qua oral understanding between the parties are of no avail to the plaintiff in the case in hand.
46.Likewise, the plaintiff in his plaint has claimed that the contract was for perpetuity and this fact has been admitted by the defendant in the WS. This appears to be a factually false plea by Ld. Counsel for plaintiff in so far as persual of para 6 of the WS under title "preliminary submissions and objections reads as under:
"It is well-settled thtat contract are determinable in nature at the will of parites or on the happening of any event as stipulated under the agreement. No contract can survive in perpetuity and as long as sufficient time has been granted by the party terminating the contract the terminnation cannot be interfered with."
47.The plea that the perpetuity aspect mentioned in para 6 of the plaint itself carries a mention that it was a determinable agreement and as such nothing can be read therefrom to conclude that the agreement in question can be considered to be an agreement for 15-20 years or a perpetual agreement which cannot be terminated with a 30 days return notice.
48.Likewise, another plea taken is that, on the one hand, defendant was under
supplying the products and, on the other hand, the agreement was terminated for the reason that plaintiff was under performing. Upon being asked it is accepted by Ld. Counsel for plaintiff that as per terms of the contract it was terminable without citing any reason by both the sides. In this backdrop, just because plaintiff continued to spam the defendant by issuing more than 50 emails, defendant cited certain reasons, it cannot be accepted that this Court can sit on judgment on justification of those reasons when the bilateral contract clearly provides that it can be terminated without citing any reason. As such this Court does not find any strength in the plea that defendant terminated the contract malafidely.CS Comm No.556/2021 Page 19 of 27
Sumita Aggarwal (Proprietor of M/s Shiv Agencies Vs. M/s Pepsico India Holdings Private Ltd.) This issue is answered against the plaintiff and in favour of defendant.
Issue no. 2:
2. Whether the plaintiff is entitled to the relief of declaration that the letter dated 02.01.2021, issued by the defendant is ab initio null and void, illegal, invalid, malafide and non est in the eyes of law?OPP
49. In view of the decision of issue no. 1 no relief is available.
Issue no. 3:
3. Whether the plaintiff is entitled to claim an amount of Rs. 25,51,486/-
along with interest towards alleged business receivables? OPP
50.Plaintiff has claimed recovery of Rs.25,52,486/- under different heads including amount of GST retained by the defendant, goods returned to defendant, rental expenses incurred by plaintif for storing the goods, unsold inventory and towards value of goods sold to third parties on the asking of PSRs but payments not received. The above amount is discussed in para 43 in 6 heads:
(a) Rs.2,75,000/- and (b) Rs.38,839/-:
The above amounts are sought for unsold goods. It is argued on behalf of plaintiff that defendant is obliged to take back the unsold inventory. The plea is opposed by Ld. Counsel for defendant as the contract Ex.PW1/5 does not provide for return of unsold goods. The contention that the plaintiff could not have sold the goods after the expiry of 60 days termination notice is unacceptable because admittedly plaintiff was not a stockist and the supplies were made one way by way of sale against 100% advance money. Combined reading of Clause 2 and 12, does not prohibit the plaintiff from solding the unsold inventory. As such nothing is found entitled plaintiff to seek recovery under this head. It is pointed out that there is no entry of Rs.38,839/- in the ledger Ex.PW1/30.CS Comm No.556/2021 Page 20 of 27
Sumita Aggarwal (Proprietor of M/s Shiv Agencies Vs. M/s Pepsico India Holdings Private Ltd.)
(c) Rs.18,41,251/-:
51.This amount is claimed towards goods sold on the advice of sales representatives and payments not received from third party. Nothing has been shown from the agreement Ex.PW1/5 that in case third party to whom the plaintiff sells the goods do not pay up, the payments shall be made by the defendant company. In the absence thereof no liability can be fastened on the defendant company under the guise that plaintiff sold these goods on the asking of sales representatives.
(d) Rs.35,885 + Rs.32,597= Rs.68,482/-
52.This amount is sought towards GST money purportedly retained by the defendant qua two invoices issued on 16.10.2020 and 16.01.2021. As per Ld. Counsel for defendant all the moneys which were due and payable already stands paid after the reconciliation of ledgers carried out by both the parties in March 2023 post filing of the suit in hand which was filed on 12.02.2021. Attention of this Court is drawn to email Ex.PW1/29 dated 02.03.2023 written by defendant to the plaintiff where defendant has thanked the plainiff for cooperating in reconciliation of records and acknowledging their liability to pay final reconciled amount of Rs.16,80,814/-. Admittedly, no opposition to the above contention of the defendant that nothing more is payable under the reconciled amount was made by the plaintiff by reverting and opposing the contention.
53. According to Ld. Counsel for plaintiff the above amount of Rs.62,842/- is still due and payable. On being asked, it is conceded by Ld. Counsel for plaintiff that plaintiff has not placed on record invoices dated 16.10.2020 and 16.01.2021 qua which the above GST payment is sought. It is argued that there is a reference qua the same in the ledger filed by the plaintiff.
CS Comm No.556/2021 Page 21 of 27Sumita Aggarwal (Proprietor of M/s Shiv Agencies Vs. M/s Pepsico India Holdings Private Ltd.) The law qua the ledger is well-settled. The evidenciary value of a ledger is covered under Section 28 of Bhartiya Sakshya Adhiniyam, 2023 (Section 34 Indian Evidence Act, 1872). For ready reference the same is reproduced as under:
Section 28 of Bhartiya Sakshya Adhiniyam, 2023 : [Entries in books of account, including those maintained in an electronic form] when relevant.
"Entries in books of account, including those maintained in an electronic from, 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."
Illustration:
A sues B for Rs.1,000/- and shows entries in his account books showing B to be indebted to him to this amount. The entries are relevant, but are not sufficient, without other evidence, to prove the debt."
(Emphasis Supplied)
54. In case titled Chandradhar Goswami and ors. Vs. Gauhati Bank Ltd., 1966 Latest Caselaw 225 SC dated 14.10.1966 of Hon'ble Supreme Court wherein it is held that :
"The main question urged before us is that there is no evidence besides the certified copy of the account to prove that a sum of Rs 10,000 was advanced to the appellants and therefore in view of Section 34 of the Evidence Act the appellants cannot be saddled with liability for that amount. Section 34 is in these terms:
"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."
55. In case titled Ishwar Dass Jain (Dead) through LRs Vs. Sohan Lal (Dead) by LRs, 1999 Latest Caselaw 405 SC dated 29.11.1999 of Hon'ble Supreme Court wherein it is held that :
"Under Section 34 of the Evidence Act, entries in "account books" regularly kept in the course of business are admissible though they by themselves cannot create any liability. Section 34 reads as follows:
"34. Entries in books of account when relevant.--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."CS Comm No.556/2021 Page 22 of 27
Sumita Aggarwal (Proprietor of M/s Shiv Agencies Vs. M/s Pepsico India Holdings Private Ltd.) It will be noticed that sanctity is attached in the law of evidence to books of account if the books are indeed "account books" i.e in original and if they show, on their face, that they are kept in the "regular course of business". Such sanctity, in our opinion, cannot attach to private extracts of alleged account books where the original accounts are not filed into court. This is because, from the extracts, it cannot be discovered whether the accounts are kept in the regular course of business or if there are any interpolations or whether the interpolations are in a different ink or whether the accounts are in the form of a book with continuous page-numbering. Hence, if the original books have not been produced, it is not possible to know whether the entries relating to payment of rent are entries made in the regular course of business."
56. In case titled Central Bureau of Investigation v. V. C Shukla (1998) 3 SCC 410 it has been laid down:
"That for purposes of Section 34, "book" ordinarily means a collection of sheets of paper or other material, blank, written or printed, fastened or bound together so as to form a material whole. Loose sheets of paper or scraps of paper cannot be termed as "book" for they can be easily detached and replaced. It has also been held that:
"The rationale behind admissibility of parties' books of account as evidence is that the regularity of habit, the difficulty of falsification and the fair certainty of ultimate detection give them in a sufficient degree a probability of trustworthiness."
When that is the legal position, extracts of alleged account books, in our view, were wrongly treated as admissible by the courts below though the original books were not produced for comparison nor was their non-production explained and nor was the person who had prepared the extracts examined."
57. The act of withholding of the two invoices by the plaintiff calls for drawing of an adverse inference against the plaintiff under Section 119 of Bhartiya Sakshya Adhiniyam, 2023 (Section 114 (g) of Indian Evidence Act). For ready reference the same is reproduced hereunder:
Section 119 of Bhartiya Sakshya Adhiniyam, 2023: Court may presume existence of certain facts Illustration The Court may presume-
(g) That evidence which could be and is not produced would, if produced, be unfavourable to the person who withholds it;
58. In case titled Krishan Dayal Vs. Chandu Ram, 1969 SCC Latest Caselaw 133 Del while discussing the effect of withholding of material documents like account book it was observed that:
"Question then arises as to what is the effect of the withholding of material account CS Comm No.556/2021 Page 23 of 27 Sumita Aggarwal (Proprietor of M/s Shiv Agencies Vs. M/s Pepsico India Holdings Private Ltd.) books. In this respect I find that according to illustration (g) under Section 114 of the Evidence Act, the evidence which could be and is not produced would, if produced, be unfavorable to the person who withholds it. The principle underlying the above illustration has been applied by their Lordships of the Supreme Court in cases wherein a party in possession of material document does not produce the same. It has accordingly been held that the non-production of a material document by a party to a case would make the Court draw an inference against that party. A Division Bench of the Calcutta High Court (Mookerjee and Panton, JJ.) in the case of Debendra Narayan Singh v. Narendra Narayan Singh and others held:- "In a suit for accounts, the non-production of account books by the party who has custody of them justifies the presumption under Section 114(g). Evidence Act, that they have been withheld, because if produced, they would have been unfavorable to his case. If he is the plaintiff and is claiming accounts though withholding papers, his suit is liable to be dismissed.
(Emphasis Supplied)
59. In case titled Union of India Vs. Mahadeolal Prabhudayal, 1965 Latest Caselaw 43 SC Hon'ble Supreme Court while discussing judgments passed by Privy Counsel ruled that:
"If it is found that a party to a suit breaches its application to give full disclosure of relevant facts and materials, the Court shall invoke the presumption attached to Section 114(g) of the Evidence Act."
60. In this backdrop the contention of the plaintiff that the reference of these invoices in the GST records is found to be wholly insufficient to fasten the liability on the defendant company.
(e) Rs.7,914/-
61.This amount is sought qua certain goods claimed to have been returned by the plaintiff. Admittedly, plaintiff has neither placed nor proved on record any invoice or eway bill or bilty to show return of goods worth Rs.7,914/-. The plea that the liability to pay this amount was admitted by the defendant in an email Ex.PW1/19 dated 01.02.2021 was admittedly prior to reconciliation carried out in March 2023. Ld. counsel for defendant submits that all these sundry claims stands reconciled and paid and nothing more is due and payable. In the absence of any evidence of CS Comm No.556/2021 Page 24 of 27 Sumita Aggarwal (Proprietor of M/s Shiv Agencies Vs. M/s Pepsico India Holdings Private Ltd.) persistence of the claim nothing is found payable to the plaintiff under this head.
(f) Rs.3,20,000/-:-
62. This amount is sought qua storage charges of unsold goods from January 2021 to April 2022. Upon being asked Ld. Counsel for plaintiff accepts that in the agreement Ex.PW1/5 there was no stipulation of defendant company paying charges of storing of unpaid goods. As such nothing is found due and payable under this head. In the light of above, issue no. 3 is answered against the plaintiff and in favour of defendant.
Issue no. 4:
4. Whether the plaintiff is entitled to claim an amount of Rs. 10,00,000/-
towards alleged loss of security deposit along with interest? OPP
63.This Rs.10 lakh is sought to be recovered by plaintiff distributor from the defendant company for the reason that post execution of Distributorship Agreement Ex.PW1/5 plaintiff took on rent a warhouse/godown at Rohtak Road at a monthly rent of Rs.2.25 lakhs. It is pleaded that plaintiff deposited a sum of Rs. 10 lakhs with PW2 Simratjit Singh. Upon being asked, it is accepted by Ld. Counsel for plaintiff that there is nothing in the contract Ex.PW1/5 where defendant company has undertaken to pay or recompense the plaintiff towards the rent or the security amount. In the absence of anything which could fasten the defendant qua the dispute between plaintiff and her landlord, no amount is payable by defendant to the plaitniff on this score. Simply because plaintiff took on rent a warehouse for facilitating the business does not mean that defendant would pay her. Evidently, this has to be done by the plaintiff on her own out of margin of 7.90% granted to her by the defendant under the contract.
CS Comm No.556/2021 Page 25 of 27Sumita Aggarwal (Proprietor of M/s Shiv Agencies Vs. M/s Pepsico India Holdings Private Ltd.) Accordingly, this issue is answered against the plaintiff and in favour of the defendant.
Issue no. 5,6,7:
5. Whether the plaintiff is entitled to claim Rs. 59,94,140/- towards alleged loss of established business? OPP
6. Whether the plaintiff is entitled to claim an amount of Rs. 5,95,000/-
towards compensation along with interest? OPP
7. Whether the plaintiff is entitled to a sum of Rs. 3,20,000/- along with interest from the defendant towards rent? OPP
64.This amount is sought to be recovered by the plaintiff towards loss of business. It is argued by Ld. Counsel for plaintiff that she was promised a turnover of Rs.21 croers per annum. Admittedly, the business between the parties continued for three and a half years starting from April 2017 onwards. As per Ld. Counsel for plaintiff, plaintiff has no grievance qua supplies made during the first three years as the turnover was around the estimated figure of Rs.21 crores annually. It is, however, contended that inthe 4th year even though plaitniff continued to place orders, only 35% of the orders were adhered to by the defendant and as such there was short supply of around 65% against the orders.
65.This contention is opposed by Ld. Counsel for defendant with a submission that admittedly all the supplies were supposed to be made by the defendant to the plaintiff only against 100% advance payments. Mere placing of orders without making advance payment is akin to not placing any order at all. Nothing is filed on record by the plaintiff to show that the claim of short supply happened despite her depositing 100% advance payment. This is also evident from the fact that no recovery is sought by plaintiff for refund of advance money deposited by the plaintiff with the defendant. In the absence thereof plaintiff has miserably failed to show that there was any under supply at all, least an under supply with malafide CS Comm No.556/2021 Page 26 of 27 Sumita Aggarwal (Proprietor of M/s Shiv Agencies Vs. M/s Pepsico India Holdings Private Ltd.) intentions. These issues are answered against the plaintiff and in favour of defendant.
Issue no. 8 and 9:
8. Whether the plaintiff is entitled to a decree for rendition of accounts?
OPP
9. Whether the plaintiff is entitled to claim costs of the suit? OPP
66.In view of the decision of above issues, no relief under these issues is made out.
Relief
67.In view of the above discussion, this Court has no hesitation in concluding that plaintiff company has miserably failed to discharge the onus of proving this case and suit of the plaintiff is accordingly dismissed with cost.
68.Decree Sheet be prepared accordingly. File be consigned to Record Room after due compliance. Digitally signed by SURINDER SURINDER S RATHI S RATHI Date:
2025.04.05 16:18:12 +0530 (SURINDER S. RATHI) District Judge, Commercial Court -11 Central District, THC Delhi/28.03.2025 CS Comm No.556/2021 Page 27 of 27 Sumita Aggarwal (Proprietor of M/s Shiv Agencies Vs. M/s Pepsico India Holdings Private Ltd.)