Delhi District Court
Sh Ajay Sharma vs Sh Vijay Kumar Sharma Sole Propretor Of ... on 28 November, 2025
In the Court of Shri Ashutosh Kumar, District Judge (Commercial
Court)-01, Tis Hazari Courts, West District, Delhi
CS (COMM.) No. 37/2020
CNR No.DLWT010004092020
In the matter of :
AJAY SHARMA
Sole Proprietor of M/s Ajay Tractor Corporation
At B-18/E, Street No.9
Anand Parbat Industrial Area,
New Rohtak Road, New Delhi-110005.
...Plaintiff
Vs.
VIJAY KUMAR SHARMA
Sole Proprietor of M/s Ajay Tractor Corporation
613,Hamilton Road, Zorawar Singh Marg,
Kashmiri Gate, Delhi-110006
Also at:
F-89, Bali Nagar, Ground Floor
(Left Portion) New Delhi-110015
...Defendant
Date of Institution : 17-01-2020
Date of hearing of arguments : 27-11-2025
Date of decision : 28-11-2025
Ld. Counsel for plaintiff - Sh Pravesh Singhal
Ld Counsel for Defendant - Sh. Praveen Pahuja
CS (COMM.) No. 37/20 Ajay Sharma Vs Vijay Kumar Sharma Sole Prop. of M/s. Ajay Tractor Corporation
Page No.1 of 17
JUDGMENT
1. Plaintiff has filed the present suit for recovery of Rs.
6,54,373.35/-,which is inclusive of principal amount of Rs. 6,41,542/- and interest of Rs. 12,830/- calculated @ 24% per annum, against the defendant qua supply of goods.
2. Briefly, the case of the plaintiff is that parties to the suit are real brothers and their deceased father had established a firm namely "M/S Ajay Tractor Corporation" but with the passage of time disputes started between the parties and accordingly in the year 2005 the parties separated their business, but the name of the firm remained the same as it was an old firm, which was run by their father previously and clients thereof were also common and therefore, both the plaintiff and the defendant had amicably agreed that they would run their firm with the same existing name. Accordingly, both the plaintiff and defendant decided to register their firm before the competent authority with their GST numbers. It is claimed that the plaintiff was having GST number 07AQBPS3699GIZE and used to supply tractor parts to its clients including defendant. It is further the claim of the plaintiff that he had long time business relationship with the defendant since the year 2012 to 2016, used to supply goods to the defendant based on his orders, deliver the same at 613, Hamilton Road, Zorawar Singh Marg, Kashmiri Gate, Delhi-110006 and the mode of CS (COMM.) No. 37/20 Ajay Sharma Vs Vijay Kumar Sharma Sole Prop. of M/s. Ajay Tractor Corporation Page No.2 of 17 delivery was either Rikshaw or the defendant himself used to receive it in his own vehicle as per his convenience. However, the defendant was irregular in making payments but since plaintiff was brother of the defendant, he still used to supply goods to the defendant qua which ledger account was being maintained. It is further the case of the plaintiff that there was no dispute qua quality and quantity of the goods and the goods were always received by the defendant without having any complaints.
3. It is further averred in the plaint that as per plaintiff's ledger accounts for the year 01.04.2016 to 31.03.2017, after adjusting the last payment of Rs. 3024/- made by the defendant on 05-11-2016 through cheque, there was a principal outstanding balance of Rs. 6,41,542.50/- against the defendant. It is claimed by the plaintiff that on several occasions, he had requested the defendant to pay the balance amount but every time the defendant was having excuses for not paying the same and plaintiff being his real brother always cooperated with him and extended the time of payment of balance amount. However, in the month of August, 2019 it came to the knowledge of the plaintiff through one of his family member with whom the defendant had discussed that he was only passing three years time in order to disentitle the plaintiff to do anything against him and does not want to repay the balance amount. Since the outstanding amount was was not paid by the defendant despite several requests and reminders, therefore CS (COMM.) No. 37/20 Ajay Sharma Vs Vijay Kumar Sharma Sole Prop. of M/s. Ajay Tractor Corporation Page No.3 of 17 the plaintiff sent a legal notice dated 16.09.2019 through speed post to the defendant at his place of residence as well as at his firm's address.
4. Summons of the suit were sent to the defendant and appearance was duly made on his behalf.
5. In the preliminary objections of written statement filed by the defendant, the defendant has claimed that the suit of the plaintiff is liable to be dismissed, inter alia, on the grounds that the same is highly time barred, same being not filed in accordance with the provision of Commercial Courts Act, plaintiff has not exhausted the remedy of pre-litigation mediation as provided u/s 12A of the Commercial Courts Act since no notice for pre-litigation mediation was received by the defendant. It is claimed by the defendant that there were business transactions between the parties in the years 2015-16 and 2016-17, qua which payments were already made by the defendant to the plaintiff and now no amount was payable. Defendant has claimed that in the year 2015-16, he had made purchase vide bill nos. 287 and 288 for Rs. 6,300/- each, for which payments were made by the defendant vide two cheques bearing nos. 929540 dated 14-01-2016 and 929541 dated 17-02-2016. Further, the defendant had purchased material worth Rs. 3024/- vide bill no. 336 in the year 2016-17, payment qua which was also made by the defendant vide cheque dated 1-11-2016. Defendant has claimed that the suit is vague CS (COMM.) No. 37/20 Ajay Sharma Vs Vijay Kumar Sharma Sole Prop. of M/s. Ajay Tractor Corporation Page No.4 of 17 and the same has been filed with malafide intentions to pressurize him. Defendant has also claimed that M/s. Ajay Tractor Corporation was a partnership concern, having Purshottam Dass Sharma and Vijay Kumar Sharma, as its partners and since Purshottam Dass Sharma died in the year 2017, the said firm stands dissolved by operation of law and is lying defunct since then.
6. On merits, the defendant has denied having any other business transactions with the plaintiff except for the above three aforesaid transactions qua which he had already made payments through cheques. Also while denying the averment that the parties got separated in the year 2005, the defendant has claimed that in fact the father of the parties had separated the plaintiff in the year 2005 and gave him his share. It is further claimed that M/s. Ajay Tractors is not an active partnership firm any longer and that the same is lying defunct since 2017 after the death of his father. Defendant has further denied that clients of the firm were common or that parties had amicably agreed to run the firm by the same name and further that they had decided to register their firm before the competent authority with their GST numbers. While denying the averments made in the plaint in general, defendant has denied having any liability to pay any amount to the plaintiff.
7. Plaintiff filed replication to the written statement filed by the defendant, reiterating the contents of the plaint and denying the CS (COMM.) No. 37/20 Ajay Sharma Vs Vijay Kumar Sharma Sole Prop. of M/s. Ajay Tractor Corporation Page No.5 of 17 averments made in the written statement.
8. From the pleadings of the parties, the following issues were framed vide order dated 25-08-2022:
1) Whether the plaintiff is entitled to recovery of Rs.
6,54,373/- alongwith interest from the defendant as alleged? OPP
2) Whether the suit is barred by limitation? OD
3) Whether the suit has not been filed by as per the procedure applicable to the Commercial Courts Act? OPD
4) Whether the suit is without cause of action? OPD
5) Whether M/s. Ajay Tractor Corporation is a subsisting partnership concern. If yes, what effect would it have on the filing of the suit? OPD
6. Relief.
9. In support of its case, plaintiff examined himself as PW-1. He was examined, cross-examined and discharged and PE was closed on 18-05-2023. On the other hand, defendant examined himself as DW-1, who was examined, cross-examined and discharged. and DE was closed on 27-04-2024.
10.PW-1 Ajay Sharma, tendered his affidavit of evidence Ex.
PW-1/A and relied upon the following documents:-
i. Copy of GST registration certificate of the plaintiff having GST number 07AQBPS3699G1ZE - Ex. PW1/1.
ii. Non starter report issued by DLSA on 10.01.2020 - Ex. PW1/2. iii. VAT registration of M/s Ajay Tractor Corporation having registration number 07960300644 - Ex. PW1/3. iv. Copies of invoices issued since 2005-2016 - Ex. PW-1/4 to 4A 22 (Colly.) CS (COMM.) No. 37/20 Ajay Sharma Vs Vijay Kumar Sharma Sole Prop. of M/s. Ajay Tractor Corporation Page No.6 of 17 v. Copy of ledger account - Ex. PW1/5 to PW-1/5 (XXXII) (42 to 61) (Colly) vi.Vat registration - Ex. PW1/6 to Ex. PW-1/6 (VIII) (Colly.) vii. Copy of Legal Notice alongwith postal receipts are exhibited herewith - Ex.PW1/7 to PW-1/7 (V)
viii) Statement of truth - Ex. PW-1/8
ix) Certificate under section 65B of Indian Evidence Act, 1872
- Ex.PW-1/9
11.Defendant DW-1 Vijay Kumar Sharma tendered his evidence by way of affidavit Ex. DW1/A and relied upon following documents:
1. Office copy of the notice dated 20-12-2022 - Ex. DW-1/1
2. Original postal receipt - Ex. DW-1/2
3. Retirement -cum-partnership deed is already - Ex. PW-1/D-1
4. Ledger account for financial year 2015-16 and 2016-17 is Ex. DW-1/3 (colly.) (OS&R)
5. Office copy of reply dated 14-10-2019 - Ex.DW-1/4
6. Original Postal receipt dated 21-10-2019 - Ex. DW-1/5
7. Tracking report - Ex DW-1/6
12.I have heard the final arguments addressed by ld. Counsels for both the parties, perused their respective written submissions filed on record and have also perused the judicial file.
13.Pre-litigation mediation held in the matter, was a non-starter as the defendants did not appear before DLSA, West District and finally the non-starter report dated 10-01-2020 Ex. PW-1/2, was issued by Central District Legal Services Authority.
14.On 27-11-2025, this Court sought clarifications from the learned counsel for the plaintiff regarding inconsistencies in the exhibits CS (COMM.) No. 37/20 Ajay Sharma Vs Vijay Kumar Sharma Sole Prop. of M/s. Ajay Tractor Corporation Page No.7 of 17 numbers as compared to those mentioned in the affidavit of evidence of PW-1. The learned counsel for the plaintiff clarified that the proper marking of exhibits could not be done due to an inadvertent mistake and (Colly.) was not written on some of the exhibits. He had clarified Ex.PW-1/4 was mentioned as Ex. PW-1/4 to 4A 22 (Colly.) in affidavit of evidence Ex. PW-1/A and the same be read as Ex. PW-1/4A to PW-1/4A 22 from page nos. 62 to 142 of the documents filed by the plaintiff.
15.He had further clarified that Ex.PW-1/5 was mentioned as Ex.
PW1/5 to PW-1/5 (XXXII) (42 to 61) (Colly) in affidavit of evidence Ex. PW-1/A and the same be read as Ex. PW-1/5 - I to PW-1/5 XXXII ( However on perusal of the document it is revealed that some bank account statements have also been exhibited as ledger account statements)
16. He had further clarified that Ex. PW-1/6, was mentioned as Ex.
PW1/6 to Ex. PW-1/6 (VIII) (Colly.) in affidavit of evidence Ex. PW-1/A and the same be read as Ex. PW-1/6 (I) to Ex. PW-1/6 (VIII) (from page no 143 to 148 of the paperbook)
17.He had also clarified that the Legal Notice is exhibited as Ex. PW-1/7 (I) and its postal receipts are exhibited as Ex. PW-1/7 (II) and Ex. PW-1/7 (III) along with Speed Post envelope exhibited as Ex. PW-1/7 (IV) and one more document having sender and addressee details exhibited as Ex. PW-1/7 (V), whereas the same are mentioned as Ex. PW1/7 to Ex. PW1/7 (V). He had submitted CS (COMM.) No. 37/20 Ajay Sharma Vs Vijay Kumar Sharma Sole Prop. of M/s. Ajay Tractor Corporation Page No.8 of 17 that exhibits actually mentioned on the said documents only may accordingly be read.
18.My issue-wise findings are as under:
19.Before delving into the merits of the issues framed, it is apposite to note that Issue No. 2, pertaining to whether the suit is barred by limitation, strikes at the very root of the matter. The question of limitation is a jurisdictional issue that, if decided in the affirmative, would render the adjudication of the remaining issues redundant, as it would oust the Court's competence to entertain the suit on merits. It is trite law that once the defendant raises a plea of limitation and points to prima facie evidence indicating the suit is time-barred, then the court has no power to decide the suit on merits. Reference may be made to the Hon'ble Supreme Court's judgment in the case "Noharlal Verma Vs. District Co-operative Central Bank Limited" (2008) 14 SCC 445 , relevant paragraph of which is reproduced as under:-
"32. Now, limitation goes to the root of the matter. If a suit, appeal or application is barred by limitation, a court or an adjudicating authority has no jurisdiction, power or authority to entertain such suit, appeal or application and to decide it on merits."
20. Therefore, I deem it fit to decide Issue No. 2 first. If the suit is found to be time-barred, no further findings on the other issues would be necessary.
CS (COMM.) No. 37/20 Ajay Sharma Vs Vijay Kumar Sharma Sole Prop. of M/s. Ajay Tractor Corporation Page No.9 of 17 ISSUE No. 2:
"Whether the suit is barred by limitation?" OPD
21.The onus to prove this issue was on the defendant.
22.In the instant case, the plaintiff's claim is based on alleged supplies of tractor parts to the defendant spanning from 2005 to 2016, with the outstanding balance as per the ledger maintained by the plaintiff for the financial year 2016-17, after adjusting a payment of Rs. 3,024/- on 05.11.2016, was Rs. 6,41,542.50 against the defendant. The suit was instituted on 17.01.2020.
23.The Ld. Counsel for the defendant had contended that the transactions were independent and bill-specific, not part of a mutual, open, and current account under Article 1 of the Limitation Act. Ld counsel for the defendant also asserted that each invoice constituted a separate contract, with payments made against specific bills, and no running account existed.
24.In support, Ld Counsel for the defendant relied on affidavit of evidence of defendant (Ex. DW1/A), paras 4 to 7, where details of only three transactions in 2015-16 and 2016-17 (bill nos. 287, 288, and 336) are mentioned, against which full payments were made via cheques, leaving no outstanding. Crucially, there was no cross-examination and denial suggestion by the plaintiff on those deposition, rendering them unchallenged and therefore deemed admitted. The defendant's ledger Ex. DW-1/3 (Colly.) (OSR) CS (COMM.) No. 37/20 Ajay Sharma Vs Vijay Kumar Sharma Sole Prop. of M/s. Ajay Tractor Corporation Page No.10 of 17 shows nil balance, and again, no denial suggestion was given to DW-1 in this regard that the said ledger Ex. DW-1/3 (Colly.) (OSR) is incorrect.
25.Per Contra, the Ld. Counsel for the plaintiff had claimed that account between the plaintiff and the defendant were a "continuous running account" from 2005 to 2017, invoking Article 1 of the Limitation Act, which provides for a three-year limitation from the close of the year in which the last item admitted or proved is entered in the account. Ld. Counsel for the plaintiff also relied on plaintiff's ledger accounts {Ex. PW1/5 to PW-1/5 (XXXII) (Colly.) as mentioned in the PW-1's affidavit of evidence} and invoices (Ex. PW-1/4 to 4A 22 (Colly.) as mentioned in affidavit of evidence of PW-1), claiming the last part payment which was made by the defendant to the plaintiff was on 05.11.2016, and legal notice of demand dated 16.09.2019 was sent to the defendant within three years of the last part payment, hence , the suit is within limitation.
26.It is important to consider the cross-examination of PW-1 dated 21-12-2022, 13-04-2023 and 18-05-2023, relevant portions of which are reproduced as under:-
".......It is correct that payment of Rs.3024/- vide cheque no.929551 dated 01.11.2016 was specifically received towards bill no.336 for Rs.3024/- (Vol. The cheque was credit in my account on 05.11.2016.) It is correct that the payment of Rs.6300/- CS (COMM.) No. 37/20 Ajay Sharma Vs Vijay Kumar Sharma Sole Prop. of M/s. Ajay Tractor Corporation Page No.11 of 17 vide cheque no.929540 of January, 2016 was received by me specifically towards bill no.287 for Rs.63,00/-. It is also correct that payment of Rs.63,00/- vide cheque no.929541 of February, 2016 was received by me specifically towards bill no.288 for Rs.6300/-. (Vol. These cheques were credit in my account on 13.01.2016 and 23.02.20216 respectively.) I cannot with surety say that payment of Rs.28,299,50 P vide cheque no."Bharath Skins Corporation vs Taneja Skins Company Pvt. Ltd." , RFA(OS) 13/2002, Decided on 21 December, 2011929532 was specifically towards bill no.253 for Rs.28,300/-, (Vol. The said payment was received by me on 12.01.2015.)...."
...........................................................................
"It is correct that the payments received from the defendant are against the specific bills.
Q. I put it to you that all bills are independent transactions and not related to each other?
Ans. I had issued independent bills and have received payment of 50 bills out of total 81 bills.
It is wrong to suggest that there were no transactions between the parties for 81 bills as claimed by me or that there was only transactions of four bills as admitted by the defendant with me. It is wrong to suggest that there is no running account between plaintiff and defendant. It is wrong to suggest that the bills Ex. CS (COMM.) No. 37/20 Ajay Sharma Vs Vijay Kumar Sharma Sole Prop. of M/s. Ajay Tractor Corporation Page No.12 of 17 PW-1/4 E to Ex. PW-1/4 A-22 are false and fabricated......"
..............................................................................
"..... I have always been claiming the alleged closing debit balance amount of Rs.6,48,719/- as shown in financial year ledger for the year 01.04.2012 to 31.03.2013 throughout even in the year 2012 also. However, I cannot tell the exact date or month...."
27.Upon scrutiny of the aforesaid testimony of PW-1, I find the plaintiff's contention of a running account untenable. Plaintiff nowhere in the plaint specifically claimed that it was a running account and in replication merely denied the averment of defendant in the written statement that it was not a running account. PW-1, in his cross-examination dated 21.12.2022, admitted that specific payments were made against specific bills:
Rs. 3,024/- against bill no. 336, Rs. 6,300/- against bill no. 287, Rs. 6,300/- against bill no. 288, and Rs. 28,299.50/- against bill no. 253. Further, in cross-examination dated 13.04.2023, PW-1 conceded that "all bills are independent transactions" and did not deny the suggestion that payments were received against specific bills. This admission demolishes the notion of an open and running account. An open, mutual and running account requires reciprocity of dealings and a shifting balance, not isolated bill- wise settlements. Hence, article 1 of the Limitation Act is not applicable in the present case.
CS (COMM.) No. 37/20 Ajay Sharma Vs Vijay Kumar Sharma Sole Prop. of M/s. Ajay Tractor Corporation Page No.13 of 17
28.Even for arguments sake it is assumed that some payments were partial or across bills (as claimed by plaintiff qua invoices nos. 9, 11-14, 85-86, etc.), it does not establish a running account. The plaintiff's own ledger shows entries prior to 2014 for the bulk of the alleged outstanding of Rs. 6,48,719/- as of 31.03.2013.
29.PW-1 admitted in his cross-examination that he had demanded the balance "throughout even in the year 2012 also and in year 2013 every week every month." This triggers limitation from the date of such demands, as refusal to pay post-demand gives rise to the cause of action.
30.The plaintiff's reliance on the last payment of 05.11.2016 as extending limitation is misplaced. This payment, as admitted, was against a specific bill (no. 336), not an acknowledgment of the entire alleged debt.
31.The Hon'ble Bombay High Court in Wilson Jacobs Vs. Lucid Print & Ors. (2018 SCC Online Bom 1982) held that :-
"6....If a party makes payment to his creditor against a specified bill and the payment is accepted it can only be applied towards satisfaction of the claim under that bill. If no particular invoice is specified, the creditor is entitled to apply the payment to the earliest unpaid bill. This hardly admits of any dispute, especially in the commercial division of a High Court in the commercial capital of the country and I do not propose to spend any more time in addressing this.
CS (COMM.) No. 37/20 Ajay Sharma Vs Vijay Kumar Sharma Sole Prop. of M/s. Ajay Tractor Corporation Page No.14 of 17
7. There is then an argument that between the parties there was a running account. The fact that there were continuous transactions does not make it a running account. Again the concept of a running account in commercial practice is well-known. It must be demonstrated that there are debits and credits going on simultaneously or on a regular basis and that balances are struck with some periodicity; not that there are a number of invoices, some of which remain unpaid. Non-payment of invoices and payment without specifying a particular invoice does not make the transactions a "running account"."
32.Ld counsel for the plaintiff has strongly relied upon a judgment of Hon'ble High Court of Delhi tiltled as "Bharath Skins Corporation vs Taneja Skins Company Pvt. Ltd." , RFA(OS) 13/2002, Decided on 21 December, 2011, to claim that account between parties was open, running and non-mutual.
33. However, in view of foregoing discussion and also in view the judgment in Wilson Jacobs v. Lucid Print (Supra), referred to in Para 27, wherein the Hon'ble Bombay High Court clarified that payment against a specified bill must be confined to that bill alone, and that mere continuity of transactions does not by itself amount to a running account and it becomes evident that the essential ingredients of a non-mutual, open and current account CS (COMM.) No. 37/20 Ajay Sharma Vs Vijay Kumar Sharma Sole Prop. of M/s. Ajay Tractor Corporation Page No.15 of 17 are entirely absent in the present case. The transactions were admittedly bill-specific, payments were made strictly against identified invoices, there is no evidence of reciprocal or alternating debits and credits; nor any periodic striking of balances. Thus, Article 113 of the Limitation Act, as mentioned in the judgment cited by Ld. Counsel for the plaintiff is not applicable to the facts of the present case. When viewed along with PW-1's admissions that he had been demanding payment since 2012-13, the inevitable inference is that the cause of action, if any, arose prior to 2016. Accordingly, the suit instituted in January 2020 is beyond the prescribed three-year limitation period and is liable to be dismissed on this ground alone. Even if for arguments sake, it is assumed that Article 113 of the Limitation Act is applicable, still since PW-1 in his cross-examination has admitted that plaintiff had demanded the outstanding amount in the year 2012-2013 and therefore the cause of action qua the outstanding amount arose on the first refusal of demand in the year 2012 and 2013 and hence the major part of claim of Rs. 6,48,719/- as per ledger account of the plaintiff, is time barred.
34.Even assuming the last payment of Rs. 3,024/- was made and credited on 05.11.2016, the same was admittedly towards a specific bill (No. 336) and cannot extend limitation for unrelated and much older entries dating back to 2012-13.
35.Thus, applying the settled position of law that a time-barred claim CS (COMM.) No. 37/20 Ajay Sharma Vs Vijay Kumar Sharma Sole Prop. of M/s. Ajay Tractor Corporation Page No.16 of 17 cannot be revived by unilateral assertions or legal notice, it inevitably follows that the present suit filed on 17.01.2020 was instituted well beyond the prescribed period of limitation of three years. This Court is, therefore, constrained to hold that the present suit is barred by limitation, resultantly, the primary issue (Issue No. 1) pertaining to entitlement of recovery and other issues do not survive for adjudication on merits, as the bar of limitation strikes at the very root of the plaintiff's claim and ousts the jurisdiction of the Court to grant any relief.
36.Since the suit is held to be barred by limitation, this Court is divested of jurisdiction to adjudicate the remaining issues on merits, in line with the mandate in "Noharlal Verma Vs. District Co-operative Central Bank Limited (supra)". The suit of the plaintiff is accordingly dismissed with no order as to costs.
Decree sheet be prepared accordingly.
File be consigned to record room
Digitally signed
by ASHUTOSH
ASHUTOSH KUMAR
KUMAR Date:
2025.11.28
16:16:07 +0530
(Announced in the open (Ashutosh Kumar)
Court) District Judge (Commercial Court)-1
West, Tis Hazari Courts, Delhi
28-11-2025
CS (COMM.) No. 37/20 Ajay Sharma Vs Vijay Kumar Sharma Sole Prop. of M/s. Ajay Tractor Corporation
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