Delhi District Court
Shri Laxmi Narain vs M/S. Mayasheel Retail India Pvt. Ltd on 18 September, 2025
DLCT010013292025
IN THE COURT OF SH. VIDYA PRAKASH
DISTRICT JUDGE (COMMERCIAL COURT)-01
CENTRAL DISTRICT, TIS HAZARI COURTS, DELHI
CNR NO.: DLCT010013292025
CS (COMM.)/106/2025
IN THE MATTER OF:-
1. Shri Laxmi Narain
Proprietor of:
M/s Neelam Brasseries
Having office at:
6968, Ghas Mandi, Ahata Kidara
Pahari Dhiraj, Delhi
Through SPA Holder/ AR
Sh. Mukul Gupta
Mobile No.: 9968000571
e-mail: [email protected]
.... PLAINTIFF
VERSUS
1. M/s Mayasheel Retail India Ltd.
Through its Managing Director
Sh. Atul Garg
5709, Gali No.6, Subhash Mohalla, Gandhi Nagar
Delhi.
Mobile Nos. 9811882398, 9899206688
e-mail: [email protected]
2. Sh. Atul Garg
Managing Director of
M/s Mayasheel Retail India Ltd.
3. Ms. Mala Thapar
Director of
M/s Mayasheel Retail India Ltd.
CS (COMM.)/106/2025 Page 1 of 36
4. Mr. Parthy Purani
Director of
M/s Mayasheel Retail India Ltd.
5. Mr. Sanjeev Aggarwal
Director of
M/s Mayasheel Retail India Ltd.
6. Ms. Neha Garg
Director of
M/s Mayasheel Retail India Ltd.
7. Dr. Sushil Kumar Karwa
Director of
M/s Mayasheel Retail India Ltd.
8. Mr. Sunil Kumar Karwa
Director of
M/s Mayasheel Retail India Ltd.
9. Mr. Kapil Karwa
Director of
M/s Mayasheel Retail India Ltd.
All defendants having office address
At: 5709, Gali No.6, Subhash Mohalla
Gandhi Nagar, Delhi
Also at:
Plot No.88, Sector 35
Begumpur, Khatola
Gurugram Haryana - 122001
...... DEFENDANTS
[Note: Defendant nos. 2 to 9 were deleted from the
array of defendants, vide order dated 25-01-2025,
passed by Ld. Predecessor of this Court.]
Date of Institution of Suit [e-filing] : 18-01-2025
Date of Reserving Judgment : 09-09-2025
Date of Pronouncement of Judgment : 18-09-2025
CS (COMM.)/106/2025 Page 2 of 36
JUDGMENT
1. Vide this judgment, I shall decide the present suit for recovery of ₹23,63,195/- Paise along with interest and costs, filed by plaintiff against the defendants.
2. It may be noted that the suit was initially filed against as many as nine (9) defendants, out of which, the defendant no.1 is stated to be a company and the remaining defendants were stated to be its Managing Director and/or Directors. However, on an application under Order I Rule 10(2) CPC moved by plaintiff before issuance of summons of the suit to the defendants, the defendant nos. 2 to 9 were allowed to be deleted from arrays of the defendants and accordingly, Amended Memo of Parties filed by plaintiff, was taken on record.
BRIEF FACTS OF THE CASE:
3. The case of the plaintiff, as culled out from the plaint, in brief, is as under:-
3.1 The plaintiff, who is stated to be sole proprietor of proprietorship firm, is engaged in the business of trading and manufacturing of ladies undergarments i.e. bra, panty, etc. [hereinafter referred to as the 'said goods']. It is also stated that the plaintiff's firm is also registered in MSME since long time.
3.2 Defendant no.1 is stated to be registered with the Registrar of Companies at Delhi and erstwhile defendant nos. 2 to 9 were stated to be its Managing Director or Directors, who used to meet the plaintiff CS (COMM.)/106/2025 Page 3 of 36 for selecting the goods at the office of plaintiff and after selecting the goods, they used to place orders either personally or through e-mails.
3.3 It is further stated that the defendants had placed number of orders through online for supplying the said goods at their address from time to time and accordingly, the plaintiff had supplied the said goods to them against invoices/bills and to this effect, Tax Invoices were generated about the goods supplied to the defendant company and their e-way bills, as per policy of GST Deptt. The business transactions between plaintiff and defendants were maintained in the ledger accounts and the details of such bills are as under:-
Sr. No. Bill NO. Date Amount (₹)
B/F 874/-
1 959 01.10.2022 2,05,024.05
2 992 13.12.2022 87,020.64
3 993 13.12.2022 19,738.53
4 1009 16.01.2023 33,916.05
5 1010 16.01.2023 26,277.30
6 1015 31.01.2023 4,16,642.89
7 1024 18.02.2023 2,15,667.37
8 1025 18.02.2023 2,46,578.85
9 1042 17.03.2023 2,23,815.37
10 1091 06.06.2023 1,25,581.05
11 1098 16.06.2023 2,63,791.50
12 1109 12.07.2023 2,29,162.50
13 1160 19.10.2023 2,69,110.10
TOTAL 23,63,195.56
CS (COMM.)/106/2025 Page 4 of 36
3.4 Thus, it is stated that as per ledger account of
plaintiff as well as bank statement, there are outstanding dues to the tune of ₹23,63,195/- towards the above said transactions against supply of said goods to the defendant company.
3.5 It is alleged that the defendant had issued one cheque of ₹1,00,000/-, bearing No.912465 dated 10-
06-2024 towards discharge of its part liability towards supply of said goods, with the assurance that same would be honoured on its presentation within time, however, the said cheque, on being presented to the banker of plaintiff bank i.e. Canara Bank, Sadar Bazar, Delhi, returned dishonoured with remarks 'insufficient funds'.
3.6 It is further alleged that despite several requests, demands and reminders, the defendants did not clear the said outstanding amount. Even despite being served with the legal notice dated 06-07-2024, the defendants did not clear the said outstanding dues.
3.7 Further, it is stated that pursuant to S.12A of the Commercial Courts Act, 2015, the plaintiff had applied for pre-institution mediation before filing of the suit, but to no avail, as a result of which, Non-Starter Report dated 20-11-2024 was got issued.
3.8 Hence, the present suit for recovery of ₹23,63,195/-
along with interest @ 24% per annum from the date CS (COMM.)/106/2025 Page 5 of 36 of invoices till its realization, came to be filed by plaintiff against the defendants.
4. On being served with the summons of the suit, the defendant company put its appearance through counsel and filed written statement contesting the suit. In its written statement, the defendant took various preliminary objections, inter alia, that:-
4.1 The plaintiff has not approached this Court with clean hands and made false and frivolous averments;
concealed material facts and as such, is not entitled for the relief of money decree and the present suit warrants dismissal on this ground alone.
4.2 This Court does not have territorial jurisdiction to entertain and try the present suit.
4.3 No cause of action arose in favour of plaintiff and against the defendant and the present suit has been filed only with the purpose of harassing the defendant.
4.4 The suit is not properly valued for the purpose of Court Fee and hence, is liable to be dismissed.
4.5 The plaintiff breached the contract of sale of goods by supplying defective goods on several occasions and completely failed to fulfill the basic terms of contract, so the suit is liable to be dismissed on this ground.
CS (COMM.)/106/2025 Page 6 of 365. By way of preliminary submissions, it is stated by defendant that it had started trading/ business with the plaintiff, who assured the defendant regarding good quality. He further promised that in case, any goods are found to be defective/sub-standard quality, the plaintiff shall replace or return the same. It is stated that after few months, as the goods of plaintiff caught up the market, the defendant company started receiving complaints from its customers and the defendant, thereafter, immediately informed the employees of plaintiff about sub-standard / defective quality of the goods within reasonable time and requested them to supply the assured quality goods and to replace the sub-standard goods delivered to them. Thus, it is stated that the plaintiff has concealed the material facts from this Court that the goods sent by him, were not of merchantable quality and failed to fulfill the purpose for which it was bought and also breached the implied condition and warranty in the sale of goods contract.
6. It is further stated that thereafter, the defendant informed the executives of plaintiff several times that the condition of their over supplied goods, is losing stock value and therefore, requested them to get the goods picked up from defendant's stores and despite acknowledging the grievance of the defendant, the plaintiff kept on delaying to settle the accounts on one pretext or the other. However, after a lapse of few months, plaintiff's employee assured the defendant that all the defective, unsold and unordered garments/goods shall be picked up after the season. It is also stated that the defendant had unsold and unordered the CS (COMM.)/106/2025 Page 7 of 36 inventory lying with it, as also had defective products lying with him. However, despite several reminders by the defendant, the plaintiff has till date failed to pick up unsold & unordered products and defective goods from the defendant, which are at its premises, so that the matter with plaintiff can be settled with.
7. It is also stated that the entire dealings with respect to sale and purchase of goods took place at Gurugram, as also that the plaintiff had supplied goods to the defendant at its corporate office, whereas, he had wrongly pleaded that the jackets were supplied at defendant's office in Delhi. It is stated that mere assertion with no proof, does not give territorial jurisdiction to this Court. Hence, it is stated that in view of Section 20 C.P.C, this Court does not have territorial jurisdiction to try the present suit, as admittedly the goods were delivered at subordinate office of the defendant company, which is at Gurugram.
8. It is further stated that in the present case, the drawee bank is situated in Gurugram. Moreover, admittedly, defendant's residence and workplace are both situated in Gurugram. Therefore, in the absence of any documentary proof to prove otherwise, only Courts at Gurugram shall have territorial jurisdiction over the subject matter of the present suit.
9. Likewise, by way of 'Para-wise Reply', the defendant company has controverted and denied the averments made in corresponding Paras of the plaint.
CS (COMM.)/106/2025 Page 8 of 3610. The plaintiff filed replication to the written statement, thereby controverting and denying the averments made therein, while reaffirming the averments made in the plaint. It is categorically denied that the goods supplied by plaintiff to the defendant company, were of inferior quality.
ISSUES:
11. From pleadings of the parties, the following issues were framed, vide order dated 01-08-2025, passed by this Court:-
i. Whether this Court lacks territorial jurisdiction to try and entertain the present suit? If so, to what effect? OPD ii. Whether the goods supplied by plaintiff to the defendant were defective, as alleged. If so, to what effect? OPD iii. Whether the plaintiff is entitled to recover for a sum of ₹23,63,195/- from defendant? OPP.
iv. Whether the plaintiff is entitled to recover interest? If yes, then at what rate and for which period? OPP.
v. Relief. PLAINTIFFS' EVIDENCE:
12. In support of his case, the plaintiff has examined only one witness namely Sh. Mukul Gupta, as PW1. He led his chief CS (COMM.)/106/2025 Page 9 of 36 examination by way of affidavit (Ex. PW1/A) and deposed on the lines of averments made in the plaint. He categorically testified that he is fully conversant with the facts of the present case and the plaintiff has executed General Power of Attorney in his favour and thus, he is competent to depose as a witness in this case. He has also relied upon/proved the following documents:-
Srl. Document/Particulars Exhibit(s) no
1. Copy of Udyam Registration and Ex.PW1/1 GST Certificate (Colly.)
2. Copy of particular of defendant Ex.PW1/2 company
3. Copies of 13 Invoices / Bills with Ex.PW1/3A to their corresponding e-way Bills Ex.PW1/3M
4. Copy of statement/ ledger account Ex.PW1/4 for period from 01-4-2021 to 31-
03-2024.
5. Certificate under S. 63 Bharatiya Ex.PW1/5 Sakshya Adhiniyam, 2023
6. Copy of legal notice dated 06-7- Ex.PW1/6 2024
7. 15 Postal Receipts Ex.PW1/7 (Colly.) 8. Tracking reports Ex.PW1/8 (Colly.) CS (COMM.)/106/2025 Page 10 of 36 Srl. Document/Particulars Exhibit(s) no
9. Non-Starter Report dated Ex.PW1/9 20-11-2024
10. Special Power of Attorney dated Ex.PW1/10 17-01-2025
13. PW1 has been cross-examined at length by the defendant.
However, the same is not being mentioned herein and shall be considered in subsequent paras of this judgment, while rendering findings on the issues.
14. On statement of General Power of Attorney holder namely Sh. Mukul Gupta (PW1) of plaintiff, PE was closed on 19-08-2025.
DEFENDANTS' EVIDENCE:
15. In its defence, the defendant company has also examined only one witness namely Sh. Sushant Saraff, as DW1. He also led his examination in chief by way of evidence affidavit (Ex.DW1/A) and deposed on the lines of averments made in the written statement.
16. DW1 has also been cross-examined at length, and the relevant portion of his cross-examination shall be considered in subsequent paras of this judgment, while rendering findings on the issues.
17. On statement of counsel of defendant, DE was closed on 02-09-2025.
CS (COMM.)/106/2025 Page 11 of 3618. I have already heard Sh. Digvijay, Advocate for plaintiff and Ms. Anushka Ojha, Advocate for defendant. I have also gone through the material available on record, including the pleadings of the parties, evidence, oral as well as documentary, led by both the sides, as available on record. I have also duly considered the submissions made on behalf of the parties, and the authority cited at the Bar.
19. My issue-wise findings are as under:-
ISSUE NO.1
20. Firstly, I shall take up the issue no.1, which reads as under:-
Issue no. (i) -Whether this Court lacks territorial jurisdiction to try and entertain the present suit? If so, to what effect? OPD
21. Initial burden to prove this issue was placed upon defendant in view of Preliminary Objection No.2 taken in written statement that this Court does not have territorial jurisdiction to entertain and try the present suit. The defendant had taken defence that its registered office is situated at Gandhi Nagar, Delhi and its corporate/ subordinate office is situated at Gurugram, Haryana, and since goods were delivered at its said corporate/ subordinate office, this Court lacks territorial jurisdiction within the meaning of S.20 CPC to entertain and try the present suit.
CS (COMM.)/106/2025 Page 12 of 3622. On the other hand, the plaintiff averred in the plaint that this Court has got territorial jurisdiction to entertain and try the present suit, as the defendant had placed orders and had also sent such orders through mails at the office of his firm situated at Pahari Dhiraj, Sadar Bazar, Delhi and also on account of the fact that the goods were supplied from the said office, and thus, part cause of action arose within the territorial jurisdiction of this Court.
Arguments advanced by both the sides:
23. After referring to pleadings of the parties and the evidence, oral as well as documentary, Ld. Counsel of plaintiff vehemently argued that the defendant has failed to discharge the initial burden of proving this issue. He drew attention of this Court to the relevant portion of cross- examination of DW1.While relying upon relevant condition no.3 of the Invoices in question [Ex.PW1/3A to Ex.PW1/3M], Ld. Counsel of plaintiff further submitted that even as per said condition, it was agreed between the parties that all disputes shall be subject to Delhi jurisdiction only and therefore, he urged that this issue should be decided against the defendant and in favour of the plaintiff.
24. Per contra, Ld. Counsel of defendant argued that no part of cause of action arose within the territorial jurisdiction of this Court, as the registered office of defendant is situated at Gandhi Nagar, Delhi and its corporate/ subordinate office is situated at Gurugram, Haryana, where-also, the goods were delivered by plaintiff against the invoices in CS (COMM.)/106/2025 Page 13 of 36 question. He, therefore, urged that this issue should be decided in favour of defendant and against the plaintiff. In support of her said submission, Ld. Counsel of defendant relied upon decision of Hon'ble Apex Court in the case titled as 'Patel Roadways Limited, Bombay v. Prasad Trading Company and Ors.' reported as MANU/SC/0280/1992.
Analysis & Findings:
25. Before dealing with the rival submissions made on behalf of both the parties, it would be relevant to take note of the legal position.
26. Section 20 CPC, which is the governing provision for deciding the question of jurisdiction in hand, reads as under:-
"20. Other suits to be instituted where defendants reside or cause of action arises - Subject to the limitations aforesaid, every suit shall be instituted in a Court within the local limits of whose jurisdiction-
(a) the defendant, or each of the defendants where there are more than one, at the time of the commencement of the suit, actually and voluntarily resides, or carries on business, or personally works for gain; or
(b) any of the defendants, where there are more than one, at the time of the commencement of the suit, actually and voluntarily resides, or carries on business, or personally works for gain, provided that in such case either the leave of the Court is given, or the defendants who do not reside, or carry on business, or personally work for gain, as aforesaid, acquiesce in such institution; or
(c) the cause of action, wholly or in part, arises."
Explanation: A corporation shall be deemed to carry on business at its sole or principal office in India or, in respect of any cause of action arising at any place where it has also a subordinate office, at such place.
CS (COMM.)/106/2025 Page 14 of 3627. Thus, it is quite evident from above that any Court within whose jurisdiction cause of action arose, wholly or in part, shall also have territorial jurisdiction to entertain and decide the suit within the meaning of S.20(c) CPC, as reproduced hereinbefore, besides the Court within whose jurisdiction, the defendant actually resides, or carries on business, or personally works for gain, as provided in 20(b) CPC.
28. Now reverting back to the facts of the present case.
Though, DW1 namely Sh. Sushant Saraff has deposed on identical lines of the averments made in this regard in the written statement, during his chief-examination by way of evidence affidavit (Ex.DW1/A), however, during his cross- examination, he completely showed ignorance as to where the office of plaintiff is actually situated. He also feigned ignorance that defendant company used to place orders for purchase of materials with the plaintiff at his office situated at 6968, Ahata Kidara, Pahari Dhiraj, Delhi-110006, and also that the plaintiff used to dispatch the goods to the defendant company from his said office. Thus, it is shown that the DW1 did not even had the audacity to deny that defendant company used to place orders upon the plaintiff at his office situated at Pahari Dhiraj, Delhi-110006, and also that the plaintiff used to supply goods from his said office to the defendant company.
29. Apart from above, PW1 namely Sh. Mukul Gupta has deposed on identical lines of the averments made in the CS (COMM.)/106/2025 Page 15 of 36 plaint during his chief-examination by way of evidence affidavit (Ex.PW1/A). During his cross-examination, he reiterated that directors and other officials of defendant company, had visited the office of plaintiff situated at Pahari Dhiraj, and also that business dealings had taken place at the said office of plaintiff. He categorically denied that since goods against invoices in question were delivered at Gurugram, Haryana, hence, this Court does not have territorial jurisdiction to entertain and try the present suit, or that no part of cause of action arose within the territorial jurisdiction of this Court.
30. It has been the specific case of plaintiff that he carries on business from his office situated at Pahari Dhiraj, Sadar Bazar, Delhi, which undisputedly falls within the territorial jurisdiction of this Court. It is also an undeniable fact established on record that defendant used to place orders upon plaintiff at his said office address, and also that the plaintiff used to dispatch goods/ material to the defendant company from his said office. Thus, part cause of action arose within the territorial jurisdiction of this Court.
31. Not only this, it is duly mentioned in the invoices in question that "All disputes are subject to Delhi jurisdiction only". The use of term 'only' shows intention of the parties that they had agreed to submit themselves to the exclusive jurisdiction of Delhi Courts.
32. Moreover, PW1 has categorically deposed in Para no.9 of his evidence affidavit (Ex.PW1/A) that the plaintiff had presented Cheque bearing No.912465 dated 10-06-2024 of CS (COMM.)/106/2025 Page 16 of 36 ₹1,00,000/- to his banker i.e. Canara Bank, Sadar Bazar, Delhi, however, the said cheque returned dishonoured, vide Memo dated 26-06-2024, with remarks 'insufficient funds'. This would further show that even bank of the plaintiff is situated within the jurisdiction of this Court. Admittedly, there is no stipulation that payment was to be made at any particular place. It is trite law that in the absence of contract regarding payment being agreed or intended to be made at a particular place, the common law rule applies that the 'debtor must seek the creditor' and pay him there, and, therefore, in such a case the creditor can maintain a suit at the place where its banker is situated. In this view of the matter, this Court is of the considered view that since bank account of the plaintiff is situated within the territorial jurisdiction of this Court, it is clearly established that at least part cause of action within the meaning of S. 20(c) CPC, arose within the territorial jurisdiction of this Court. While saying so, this Court is also fortified by the decisions of Hon'ble Delhi High Court in the cases of 'M/s Auto Movers v. Luminous Power Technologies Pvt. Ltd.' bearing CM (M) 604/2020 decided on 16-09-2021; and 'Vijay Kumar Gupta v. Mohit Malik' bearing CM (M) 153/2024 decided on 15-04-2024.
33. Even otherwise, while referring to the decision of Hon'ble Apex Court in the cited case of Patel Roadways Ltd. (supra), Hon'ble Delhi High Court in the case of "N. V. Distilleries Pvt. Ltd. v. Frost Falcon Distilleries Ltd." reported as 2018 SCC OnLine Del 12544, has held as under:-
CS (COMM.)/106/2025 Page 17 of 36"xxxx
12. The senior counsel for the applicant/ defendant pegs his case on Patel Roadways Ltd. supra and argues that Supreme Court therein has on an interpretation of Section 20 of the CPC held that a corporation/ company cannot be sued at the address of its registered office, if has a subordinate/ branch office elsewhere and where the cause of action has also accrued. It is argued that the plaintiff in the plaint has admitted using the mark/label, of which infringement is claimed, in Haryana and to having its distillery at Ambala in Haryana. It is argued that the cause of action has accrued at Haryana and the defendant, owing to having distillery at Sonipat, Haryana has a subordinate office at Haryana and the suit could have been filed at Haryana only and not at Delhi where though registered office of defendant is but no cause of action has arisen.
xxxx
14. As would immediately become clear on a careful reading of the aforesaid, Supreme Court in Patel Roadways Ltd. supra though held the explanation to Section 20 of the CPC to be an explanation to Clause (a) thereof rather than to Clause (c) thereof but was concerned with only the alternative "carries on business", of the several alternatives in Clause (a). It was not the contention before the Supreme Court in Patel Roadways Ltd. supra that the place where the registered office of a corporation/company is situated is also the place where the corporation, if a defendant in the suit, "actually and voluntarily resides". Thus, no finding was returned in the said judgment on the said aspect. Supreme Court, in the context only of alternative "carries on business" in Clause
(a) of Section 20 having held that by virtue of explanation, which also is only to, where a corporation shall be deemed to carry on business, having held that where a defendant company/corporation has its principal office at one place and subordinate office at another place and cause of action arises at a place where the subordinate office is located, suit has to be filed only in the Court within whose jurisdiction the company/ corporation has its subordinate office and not in Court within whose jurisdiction it has its principal office, cannot be held to have also held that notwithstanding the word "or" between the words "actually and voluntarily resides" or "carries on business" or "personally works for gain", the alternative of suing the corporation at the place where it actually and voluntarily resides is also not available. The judgment cannot be read as eclipsing the option given by the legislature to a plaintiff, under CS (COMM.)/106/2025 Page 18 of 36 Section 20(a) of the Code, of suing at the place where the defendant, at the time of commencement of the suit, actually and voluntarily resides.
15. I have not come across any judgment holding that in case a defendant is a company or a corporation, only the option in Section 20(a) of the CPC, of "carries on business" is available and not the option of "actually and voluntarily resides". In Morgan Stanley Mutual Fund Vs. Kartick Das (1994) 4 SCC 225, it was held, as far as India is concerned, the residence of the company is where the registered office is located and normally cases should be filed only where the registered office of the company is situated. Again, in Dhodha House Vs. S.K. Maingi (2006) 9 SCC 41, it was reiterated that ordinarily the residence of the company would be where its registered office is. Once it is so, a company can always be sued under Section 20(a) of the CPC, in the Court within whose jurisdiction the registered office of the company is located. Not only as per the language of the explanation to Section 20 but even as per Patel Roadways Ltd., the explanation to Section 20 is attracted only to the alternative "carries on business" in Section 20 and not to the alternative "actually and voluntarily resides".
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34. In the case of 'New Moga Transport Co., through its proprietor v. United India Insurance Co. Ltd. & Ors.' reported as 2004 (4) SCC 677, Hon'ble Apex Court has held that where two or more Courts have jurisdiction under CPC to try a suit or proceedings, an agreement between the parties that the dispute between them shall be tried in any one of such Courts, is not contrary to public policy and same does not in any way contravene S. 28 of Indian Contract Act.
35. In view of the legal position laid down by Hon'ble Apex Court and by our own High Court in the above referred decision, this Court is in agreement with the submission made on behalf of plaintiff that the cited decision of Patel Roadways (supra), as relied on behalf of defendant, is CS (COMM.)/106/2025 Page 19 of 36 entirely distinguishable from the facts and circumstances of the present case and thus, same would be of no help to the defendant company.
36. For all these reasons, this Court is of the considered view that at least part cause of action within the meaning of S. 20(c) CPC arose within the territorial jurisdiction of this Court. Hence, it is held that this Court has got territorial jurisdiction to entertain and decide the present suit. Thus, the defendant has failed to prove this issue, even on the basis of preponderance of probability
37. Accordingly, this issue is decided against the defendant and in favour of the plaintiff.
ISSUE NO.2
38. Now, I shall take up the issue no.2, which reads as under:-
Issue no. (ii) - Whether the goods supplied by plaintiff to the defendant were defective, as alleged. If so, to what effect? OPD
39. The initial burden to prove this issue was placed upon the defendant and in order to discharge such burden, the defendant has examined only one witness i.e. DW1.
Arguments advanced by both the sides:
40. After referring to the material available on record and the evidence led by both the sides, Ld. Counsel of defendant vehemently argued that the goods supplied by plaintiff to the defendant, were defective and of sub-
CS (COMM.)/106/2025 Page 20 of 36standard quality. In this regard, she referred to and relied upon the oral testimony of DW1 available on record. She, therefore, urged that this issue should be decided in favour of defendant and against the plaintiff.
41. On the other hand, Ld. Counsel of plaintiff, while refuting the aforesaid arguments advanced on behalf of defendant, vehemently argued that the defendant has failed to discharge the initial burden of proving this issue, even on the basis of preponderance of probability. He submitted that the defendant has not led any iota of evidence to show that it had ever raised any complaint whatsoever regarding defective or sub-standard quality of supplied material, with the plaintiff at any point of time till filing of the present suit. He further argued that goods supplied against the invoices in question, were duly received by defendant company against proper receipts/acknowledgements without any sort of objection or complaint whatsoever and thus, it does not lie in the mouth of defendant to agitate that defective goods were supplied by plaintiff to it. He, therefore, urged that this issue should be decided against the defendant and in favour of the plaintiff.
Analysis & Findings:
42. Before proceeding to deal with the rival submissions made on behalf of both the sides, it would be apposite to refer to the legal provisions contained in the Sales of Goods Act. To quote:-
41. Buyer's right of examining the goods --
(1) Where goods are delivered to the buyer, which he has not previously examined, he is not deemed to have CS (COMM.)/106/2025 Page 21 of 36 accepted them unless and until he has had a reasonable opportunity of examining them for the purpose of ascertaining whether they are in conformity with the contract.
(2)Unless otherwise agreed, when the seller tenders delivery of goods to the buyer, he is bound, on request, to afford the buyer a reasonable opportunity of examining the goods for the purpose of ascertaining whether they are in conformity with the contract.
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.
43. The aforesaid statutory provisions came up for consideration before our own Hon'ble High Court in the case titled as "KLG Systel Ltd. vs Fujitsu ICIM Ltd." reported as MANU/DE/0406/2001.Hon'ble Delhi High Court has observed therein as under:-
"12. The disputes between the parties cannot be decided do hors the sundry provisions of the Sale of Goods Act. Part-payment to a substantial extent has been made by the Defendant/Applicant. When a buyer such as the Defendant/Applicant asserts that the merchandise/goods were defective, it is not open to it to withhold payment once the delivery is accepted; since they are deemed to have been accepted by operation of law. In Nagandas Mathuradas vs. N.V. Valmamohomed and Others, AIR 1930 Bombay 249, in the opinion of the Bench, the Buyer was playing fast and loose inasmuch as the initial credit entry recorded in favor of the Seller was subsequently reversed. The fact that a substantial part payment had been made by the Defendant to the plaintiffs was found very relevant, in this context. It reiterated the view approved by the House of Lords that "if a buyer orders goods of a certain description, and the seller delivers goods of a different description, it is open to the buyer to reject them. But if he does not reject them but keeps the goods, even if he does so in ignorance of the fact that they are of a description different from that provided for by the contract he is debarred from rejecting the goods thereafter, and can only fall back upon a claim CS (COMM.)/106/2025 Page 22 of 36 for damages, as upon a breach of warranty." These observations apply, a fortiori, where the goods supplied were according to the specifications, and their price had been substantially paid.
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13. xxxx Sections 41 and 42 of the Act conjointly indicate that if defects in the goods are not recorded within a reasonable time, they will have been deemed to have been accepted. Furthermore, by making substantial payments for the price of the goods the Defendant has acted in a manner, which would render it inconsistent for the plaintiffs to still claim ownership thereon. On a careful reading of the Act, it appears that the intendment is generally that the price of the goods must be paid and if there is a subsequent defect (in contradistinction to a defect detected within a reasonable time of the delivery) the remedy that is envisaged is for the Buyer to sue for damages. This is obviously impregnated with sound commonsense and business ethics. In the present case, raising questions pertaining to the suitability of the supply after one year is not reasonable. A triable issue does not arise because what was supplied by the plaintiffs, was what was ordered by the Defendant, if it did not suit the latter's requirements the plaintiffs cannot be made responsible and liable. Significantly, it has not been shown that any legal action has been filed even by FEDO for recovery of damages from the Defendant. Some prima facie evidence of such an action should have been filed by the Defendant to justify the grant of leave to defend."
44. In the light of law as laid down in the above cited judgment and the statutory provisions as reproduced herein before, let us examine the facts of the present case.
45. In the case in hand, it is nowhere the case of the defendant company that it had raised any written objection with the plaintiff regarding poor or sub-standard quality of supplied goods against the Tax Invoices in question [Ex.PW1/3A to Ex.PW1/3M] at any point of time till filing of the present suit. It was only for the first time in the written statement, that the defendant alleged that the plaintiff committed CS (COMM.)/106/2025 Page 23 of 36 breach of contract by supplying defective goods to it on several occasions. Such plea is quite vague and general in nature inasmuch as the defendant has nowhere specified the nature of defect(s), if any, in the supplied material and the extent thereof. Mere bald plea has been raised in the written statement that the defendant had informed employees of the plaintiff within reasonable time and had requested them to replace the supplied goods delivered to the defendant, without disclosing details including the names of those employees to whom such intimation, if any, was communicated by defendant company, mode through which such communication was made and the date(s), month(s) or year thereof. In fact, the written statement is found to be completely silent, as to when the defendant had informed employees of the plaintiff about sub-standard/ defective quality of supplied goods. In the absence of such details, this Court finds considerable force in the argument advanced on behalf of plaintiff that the defendant has taken vague plea, as an afterthought story, in order to avoid its liability to pay the outstanding dues against the invoices in question to the plaintiff.
46. Even otherwise, the defendant has not been able to prove its plea regarding poor or sub-standard quality of supplied goods during trial. Except for simple suggestion put to PW1 that the goods supplied by plaintiff to defendant company, were of inferior or low quality and the defendant had intimated the same to the plaintiff, which were denied by the witness, no other question has been put on behalf of defendant company concerning this issue.
CS (COMM.)/106/2025 Page 24 of 3647. On the other hand, DW1 has admitted during his cross-examination that he has not specified the nature of defect in the goods supplied by plaintiff to the defendant company, in his evidence affidavit (Ex.DW1/A). He also feigned ignorance as to whether or not the defendant company ever sent any written communication in the form of Whatsapp message or e-mail or letter or notice to the plaintiff making complaint(s) regarding the supplied goods being defective or of sub standard quality. He also feigned ignorance as to whether or not the defendant company had ever raised any debit note in respect of defective goods allegedly supplied by plaintiff. He also could not tell as to whether or not the defendant company ever made any attempt to return the defective goods, as alleged by him. He also feigned ignorance as to whether the complaints received by defendant from its customers, as alleged in Para no.8 of his evidence affidavit (Ex.DW1/A), were in writing or verbal. He also could not tell even the period during which such complaints were received. He also could not tell the name or any other detail of any of those customers who had allegedly made such complaints with the defendant company. He admitted that no such complaint has been filed on record and no such complaint was brought by him even on the date of his cross- examination. He was also not sure as to whether defendant is having in its custody any such complaint or not. He also could not tell whether defendant had forwarded any such complaint of its customers to the plaintiff for redressal. He, however, denied that he was not able to give any response CS (COMM.)/106/2025 Page 25 of 36 to all these questions as there was no such complaint regarding defective/ sub-standard quality of supplied goods from any of the customers of the defendant, or that the defendant company had never informed executives of plaintiff regarding poor condition of supplied goods, or that the supplied goods were loosing its stock value, as stated by him in Para no.9 of his evidence affidavit (Ex.DW1/A).
48. Thus, it is quite evident from above discussion that the testimony of sole witness examined by defendant i.e. DW1, stood demolished through litmus test of cross- examination conducted on behalf of plaintiff. Hence, this Court is of the considered view that the defendant has failed to lead any cogent or positive evidence on record, on the basis of which, it can be proved or established that the goods supplied by plaintiff against the invoices in question were of poor or sub-standard quality, or that the defendant had raised any such grievance or complaint regarding poor quality of goods either within reasonable time, or till filing of the present suit.
49. Hence, the defense raised by defendant that the material supplied by plaintiff was of poor quality, seems highly improbable and unacceptable under the law. Thus, the Court is of the view that the defendant has failed to discharge the burden of proving this issue even on the basis of preponderance of probability. Accordingly, the issue is decided against the defendant and in favour of the plaintiff.
CS (COMM.)/106/2025 Page 26 of 36ISSUE NO.3
50. Now, I shall take up the issue no.3, which reads as under:-
Issue no. (iii) - Whether the plaintiff is entitled to recover a sum of ₹23,63,195/- from defendant. OPP.
51. The initial burden to prove this issue was placed upon the plaintiff and in order to discharge such burden, the plaintiff has examined sole witness i.e. PW1 Sh. Mukul Gupta, who is his son/ attorney. As already noted above, PW1 has deposed on identical lines of the averments made in the plaint that despite having received the goods against the invoices in question, the defendant failed to clear the outstanding dues towards such supply of goods.
Arguments advanced by both the sides:
52. Ld. Counsel of plaintiff vehemently argued that factum of supply of material to it, is nowhere disputed by the defendant.He further submitted that the only defence taken by defendant was that defective and sub-standard quality of goods were supplied to it, as a ploy to avoid its liability to pay outstanding dues to the plaintiff.
53. He further argued that PW1 has fully supported the case of the plaintiff during trial and defendant could not impeach his testimony during cross-examination. He also referred to and relied upon the documents, more particularly the Invoices in question [Ex.PW1/3A to Ex.PW1/3M], coupled with ledger account statement [Ex.PW1/4] and CS (COMM.)/106/2025 Page 27 of 36 Certificate under S. 63 of Bharatiya Sakshya Adhiniyam, 2023 proved by PW1 during trial. He also referred to relevant portion of cross-examination of DW1 namely Sh. Sushant Saraf, in order to bring home his point that the testimony of said witness should not be looked into, as he admitted not to have any personal knowledge regarding the business transactions in the form of supply of goods by plaintiff to the defendant company during the relevant period. He also assailed the testimony of DW1 on the ground that said witness has not proved any document showing that he was ever authorized by defendant company to appear and depose as a witness on its behalf. He, therefore, urged that the plaintiff has been able to prove his case to recover the suit amount from the defendant company and thus, this issue should be decided in favour of the plaintiff.
54. Per contra, Ld. Counsel of defendant opposed the aforesaid arguments advanced on behalf of the plaintiff and submitted that the plaintiff has failed to prove his case to recover any amount whatsoever from the defendant company. For the said purpose, he referred to two Invoices and their corresponding e-way bills [Ex.PW1/3G (Colly.) and Ex.PW1/3H (Colly.)], in order to bring home her point that there is no acknowledgment of defendant appearing on both the said bills, in token of having received any goods against them. She, therefore, contended that the plaintiff has manipulated those bills and also the ledger account statement (Ex.PW1/4) in order to support his false claim raised by way of present suit.
CS (COMM.)/106/2025 Page 28 of 36Hence, she urged that this issue should be decided against the plaintiff.
Analysis & Findings:
55. Before embarking upon the rival submissions made on behalf of both the sides, it would be apposite to summarize the admitted position, which has emerged on record by way of pleadings of the parties and the evidence led during trial. Same is delineated as under:-
55.1 There has been business dealings between the parties to the present suit;
55.2 The plaintiff had supplied goods to the defendant company from time to time against the invoices;
55.3 The defendant company had issued one cheque no.
1912465 dated 10-06-2024 of ₹1,00,000/- in favour of plaintiff and the said cheque having been dishonoured by banker of the defendant company;
55.4 The plaintiff has already instituted complaint case under S. 138 N.I. Act against the defendant company concerning dishonoured of aforesaid cheque, which is pending adjudication before the concerned Court;
55.5 The plaintiff got issued legal notice dated 06-07-2024 [Ex.PW1/6] to the defendant company, through Postal Receipts [Ex.PW1/7 (Colly.)] and same was duly served upon defendant company and its directors, as per Tracking Reports [Ex.PW1/8 (Colly.)]; and CS (COMM.)/106/2025 Page 29 of 36 55.6 The plaintiff had instituted pre-institution mediation petition before DSLSA in terms of S. 12A of the Commercial Courts Act, 2015, where the defendant company failed to appear and consequently,Non- Starter Report [Ex.PW1/9] was issued by the Competent Authority.
56. PW1 Sh. Mukul Gupta has categorically deposed in his evidence affidavit [Ex.PW1/A] that the plaintiff had supplied goods to the defendant company on several occasions as and when orders were placed upon the plaintiff by the defendant, against the invoices in question, as also that ledger account of defendant company was being maintained by plaintiff in his books of account, as per which, ₹23,63,195.56 Paise is due, outstanding and payable by defendant company to the plaintiff, which has not been paid by it till date, despite various demands made by the plaintiff. In support thereof, PW1 has also proved various documents, including copies of 13 Invoices/ bills in question with their corresponding e-way bills, as Ex.PW1/3A to Ex.PW1/3M and copy of statement/ ledger account for period from 01-04-2021 to 31-03-2025 as Ex.PW1/4.
57. During his cross-examination, PW1 has categorically stated that he had been dealing with defendant on behalf of plaintiff during the course of business transactions, which had taken place between them.The invoices [Ex.PW1/3A to Ex.PW1/3M] were generated by him on behalf of plaintiff. He also deposed that all the said invoices were CS (COMM.)/106/2025 Page 30 of 36 duly acknowledged by defendant through affixing its stamp,and they are also bearing signatures of its official/employee. He also deposed that the plaintiff had shared copy of ledger account statement [Ex.PW1/4 (Colly.)] with the defendant company, however, no document is placed on record, which may show that copy of said ledger account statement was ever shared by plaintiff with defendant company. He volunteered that he can produce the same. Despite that no suggestion was put by defendant to said witness that the plaintiff did not share copy of said ledger account statement to it at any point of time.It is well settled law that relevant portion of testimony of a witness, which remains unchallenged and uncrossed, gives rise to an inference that the opposite side has not disputed the same. Still, if any, authority is required then reference with advantage can be made to the judgments of Hon'ble Apex Court in cases titled as 'Muddasani Venkata Narsaiah v. Muddasani Sarojana' reported as AIR 2016 SC 2250 and 'Arvind Singh v. State of Maharashtra ' reported as AIR 2020 SC 2451.
58. As against the aforesaid evidence led by plaintiff, the sole witness namely DW1 Sh. Sushant Saraf categorically admitted during his cross-examination that he was working with the defendant company for the last about 1½ years as on 02-09-2025 when he was examined during trial and stated that he was working as Head Office Representative. He admitted that he had joined services of the defendant company after 19-10-2023 and thus, he did not have any personal knowledge regarding business transactions CS (COMM.)/106/2025 Page 31 of 36 regarding supply of goods by plaintiff to the defendant during the period from 01-10-2022 to 19-10-2023. Although, he volunteered that directors namely Sh. Atul Garg and Sh. Sushil Karwa had verbally told him about the business transactions, however, the fact remained that his entire testimony is based upon hearsay evidence and thus, same is not admissible in law. Still, if any authority is required, then reference with advantage can be made to the decisions of Hon'ble Apex Court in cases titled as 'Kalyan Kumar Gogoi v. Ashutosh Agnihotri & Anr.' bearing Civil Appeal No.4820 of 2007, decided on 18-01-2011; 'Neeraj Dutta v. State (Govt. of N.C.T. of Delhi)', reported as 2023 AIR (SC) 330; and ' Babu Sahebagouda Rudragoudar & Ors. v. State of Karnataka' reported as 2024 (8) SCC 149. No explanation is forthcoming from the side of the defendant as why its said two directors, or even either of them, did not enter into the witness box.
59. Moreover, the entire testimony of DW1 is liable to be discarded, for the simple reason that DW1 has failed to prove any authority, if any, issued in his favour by defendant company, thereby authorizing him to appear and depose as a witness on its behalf. Pertinently, the written statement has been filed by defendant under the signature of Sh. Mohit statedly working as its Legal Manager. However, the defendant preferred not to produce said Mr. Mohit as a witness towards its evidence during trial, for the reason best known to it. There is no piece of evidence showing the actual status of DW1 viz-a-viz the CS (COMM.)/106/2025 Page 32 of 36 defendant company. No iota of evidence is available on record in this regard. Hence, this Court is entirely in agreement with the argument raised by Ld. Counsel of plaintiff that the testimony of DW1 cannot be looked into at least for the benefit of defendant.
60. In view of the foregoing reasons and the discussion made herein above, the Court is of the considered opinion that the plaintiff has succeeded in proving this issue on the basis of preponderance of probability as against the defendant company. Accordingly, the plaintiff is held entitled to recover ₹23,63,195/- from the defendant company.
ISSUE NO.4
61. Now, I shall take up the issue no.4, which reads as under:-
Issue no. (iv)-Whether the plaintiff is entitled to recover interest? If yes, then at what rate and for which period? OPP
62. While rendering findings on issue no.3, it is held that the defendant company has illegally withheld the legitimate dues of the plaintiff and thus, this Court is of the considered opinion that the plaintiff is entitled to recover pendent-lite and future interest from the said defendant.
63. Now, the question arises as regards the rate of interest payable by defendant no.1/company to the plaintiff on the aforesaid amount.
CS (COMM.)/106/2025 Page 33 of 3664. Section 34 CPC clearly provides that where the liability in relation to the sum so adjudged had arisen out of commercial transaction, the rate of such further interest may exceed 6% per annum but shall not exceed the contractual rate of interest, or where, there is no contractual rate, the rate at which moneys are lent or advanced by nationalized banks in relation to the commercial transactions.
65. The plaintiff has claimed pendent lite and future interest @ 24% per annum from the date of invoices till its realization.
66. During his cross-examination, PW1 admitted that no document is placed on record showing that there was any agreement between the parties regarding payment of interest @ 24% per annum by defendant in case of delayed payment. However, he volunteered that there is stipulation regarding payment of interest in the invoices in question. He further admitted that even in the invoices in question, the rate of interest is mentioned as 12% per annum and not 24% per annum, as claimed by plaintiff.
67. Thus, it is quite evident from above discussion and the documents i.e. the invoices in question [Ex.PW1/3A to Ex.PW1/3M] that the defendant had agreed to pay interest @ 12% per annum on the delayed payment.
68. Therefore, keeping in view overall facts and circumstances of the case and nature of transactions between the parties being commercial, interest @ 24% per annum, in the CS (COMM.)/106/2025 Page 34 of 36 opinion of this Court, seems to be unreasonable, unjustifiable and on higher side. Thus, interest of justice would be met by awarding pendent-lite and future interest @ 12% per annum on the outstanding amount of ₹23,63,195/- from the date of filing of suit till its realization. It is so ordered accordingly.
69. The plaintiff has also claimed the cost of the suit.
Keeping in view the provisions contained in Sections 35 and 35A CPC, it has been established that the defendant no.1/company failed to pay the outstanding dues not only despite service of legal notice, but also, despite service of summons of the suit upon it. Therefore, the defendant no.1 is held responsible for cost of the litigation to the extent of court fee and lawyers fee etc. as per the relevant rules. In my view, the plaintiff is accordingly entitled for the cost of litigation against defendant no.1.
70. The issue no.4 stands decided in the aforesaid terms.
RELIEF:
71. In the light of the aforesaid discussion, Court is of the view that the plaintiff has been able to prove his case on the basis of preponderance of probability. Accordingly, the present suit is decreed in favour of plaintiff and against the defendant company and thus, the following reliefs are granted:-
71.1 The plaintiff is entitled to recover ₹23,63,195/- from defendant no.1 company;CS (COMM.)/106/2025 Page 35 of 36
71.2 Pendent-lite and future interest are awarded on the aforesaid amount @ 12% per annum from the date of filing of the suit till the date of its realization; and 71.3 Costs of proceeding are also awarded in favour of the plaintiff.
72. Decree sheet be prepared accordingly. File be consigned to Record Room, after due compliance. Digitally signed by VIDYA Announced in the open Court VIDYA PRAKASH PRAKASH Date:
On 18th Day of September,2025. 2025.09.18 16:22:52 +0530 (VIDYA PRAKASH) DISTRICT JUDGE (COMMERCIAL COURT)-01 CENTRAL DISTRICT/THC/DELHI CS (COMM.)/106/2025 Page 36 of 36