Delhi District Court
Suresh Jain vs Rahul Gupta on 9 December, 2025
IN THE COURT OF SH. SANJAY SHARMA-II : DJ (COMMERCIAL COURT)-03
(SHAHDARA) : KARKARDOOMA COURTS, DELHI
CS (Comm.) No. 647/2024
CNR No.: DLSH01-007842-2024
Suresh Jain
S/o Sh. Budh Prakash Jain
Proprietor: M/s. Suresh Textiles
X/4008, Street No. 15, Shanti Mohalla
Gandhi Nagar, Delhi-110031
..... Plaintiff
VERSUS
Rahul Gupta
Proprietor: M/s. Kamlesh Garments
R-21, Ramesh Park, Laxmi Nagar
Delhi-110092
..... Defendant
Date of Institution : 20.12.2024
Date of Arguments : 18.08.2025
Date of Judgment : 09.12.2025
JUDGMENT
PREFACE:
1. The plaintiff instituted a suit for recovery of Rs.
15,77,457/- (comprising principal amount of Rs. 10,24,323/- and Rs. 5,53,134/- as pre-suit interest @ 18% per annum w.e.f. 26.11.2021 to 25.11.2024) alongwith pendente-lite and future interest @ 18% per annum against the defendant. DESCRIPTION OF THE PARTIES:
2. The plaintiff, proprietor of 'M/s. Suresh Textiles', and the defendant, proprietor of 'M/s. Kamlesh Garments', are trading in Digitally signed by SANJAY 'fabrics'. SANJAY SHARMA SHARMA Date:
2025.12.09 13:28:05 +0530 CS (Comm.) No. 647/2024 Suresh Jain vs. Rahul Gupta Page No. 1 of 33 THE TRANSACTIONS:
3. The plaintiff supplied 'Rayon 140GM - Dyed' and 'Rayon
- 140GMS' to the defendant, vide tax invoices, as under:
Sl. No. Invoice No. Dated Amount
1. GST63/2021/22 06.09.2021 Rs. 1,09,715/-
2. GST64/2021/22 08.09.2021 Rs. 1,53,936/-
3. GST67/2021/22 11.09.2021 Rs. 1,58,110/-
4. GST71/2021/22 14.09.2021 Rs. 1,35,086/-
5. GST73/2021/22 16.09.2021 Rs. 1,37,432/-
6. GST77/2021/22 18.09.2021 Rs. 86,379/-
7. GST80/2021/22 22.09.2021 Rs. 1,53,495/-
8. GST82/2021/22 25.09.2021 Rs. 1,15,170/-
TOTAL RS. 10,49,323/-
4. In discharge of liability, the defendant issued two cheques in favour of the plaintiff, as under:
Cheque No. Date Amount (Rs.) Drawn on
607490 30.10.2021 1,09,715/- SBI, Mayur Vihar Phase-II, New
Delhi-110091
000034 31.10.2021 1,53,936/- DCB Bank, Laxmi Nagar
Branch, New Delhi-110092
5. On presentation, the said cheques were returned unpaid with remarks 'Funds Insufficient' and 'Account Closed' respectively on 02.11.2021.
6. On re-presentation, Cheque No. 607490 was returned unpaid with remark 'Funds Insufficient' on 06.01.2022.
7. The plaintiff sent a demand notice dated 28.01.2022 to the defendant.
8. The defendant replied the demand notice, vide reply dated 05.02.2022.
9. The plaintiff filed a complaint under Section 138 of 'Negotiable Instruments Act, 1881' regarding the said two cheques before the Court of Ld. JMFC, East, Karkardooma Digitally signed by SANJAY Courts, Delhi. SANJAY SHARMA SHARMA Date:
2025.12.09 13:28:17 +0530 CS (Comm.) No. 647/2024 Suresh Jain vs. Rahul Gupta Page No. 2 of 33
10. On 25.11.2021, the defendant transferred an amount of Rs. 25,000/- to the account of Mr. Tarun Jain, son of the plaintiff.
11. As per ledger, principal amount of Rs. 10,24,323/- was due against the defendant, as on 06.01.2022. Thus, this suit. WRITTEN STATEMENT:
12. In the written statement, the defendant contended that he studied upto 5th standard and his financial condition was not good. He started sale and purchase of garments in the name of 'M/s. Kamlesh Garments' after getting fabrics stitched at ' R-21, Ramesh Park, Laxmi Nagar, Delhi-110092'. He contended that he came in the contact with the plaintiff and Mr. Tarun Jain, the plaintiff's son in the year 2016 and thereafter, the plaintiff and the defendant had business relation and the defendant had been purchasing goods from the plaintiff and made 'on account' payment.
13. The defendant contended that the plaintiff had obtained one 'blank signed cheque', vide Cheque No. 607490 drawn on 'State Bank of India' and another 'blank signed cheque', vide Cheque No. 000034 drawn on 'DCB Bank' from the defendant as 'security' in the year 2016 and 2018 respectively. He contended that transactions pertaining to cheques succeeding Cheque No. 607490 drawn on ' State Bank of India' had taken place in the year 2016, as under:
Sl. No. Cheque No. Date of Transaction
1. 607491 06.04.2016
2. 607492 07.04.2016
3. 607493 08.04.2016
4. 607494 19.04.2016
5. 607495 18.04.2016
6. 607496 16.04.2016
Digitally signed
SANJAY by SANJAY
SHARMA
SHARMA Date: 2025.12.09
13:28:25 +0530
CS (Comm.) No. 647/2024 Suresh Jain vs. Rahul Gupta Page No. 3 of 33
14. The defendant contended that Cheque No. 000034 drawn on 'DCB Bank' was with the plaintiff. He contended that transaction regarding Cheque No. 000036 drawn on ' DCB Bank' had taken place on 10.10.2018. He contended that the case of the plaintiff that the defendant issued Cheque No. 607490 and Cheque No. 000034 on 30.10.2021 and 31.10.2021 is incorrect.
15. According to the defendant, he was availing service of Mr. Pawan Chaudhary, CA for filing GST Return. The case of the defendant is that his CA shifted to Jharkhand and he had access to electronic record of the defendant. He contended that his CA mistakenly filed GST Return and claimed ' Input Tax Credit' (ITC) qua invoices, as under:
Invoice No. 2021-22 Taxable Value CGST 2.5% SGST 2.5% IGST Invoice 5% Value GST63/2021/22 06.09.2021 1,04,490.38 2,612.26 2,612.26 - 1,09,715/- GST64/2021/22 08.09.2021 1,46,605.90 3,665.15 3,665.15 - 1,53,936/- GST67/2021/22 11.09.2021 1,50,580.75 3,764.52 3,764.52 - 1,58,110/- GST71/2021/22 14.09.2021 1,28,653.38 3,216.33 3,216.33 - 1,35,086/- GST73/2021/22 16.09.2021 1,30,887.18 3,272.18 3,272.18 - 1,37,432/- GST77/2021/22 18.09.2021 82,265.53 2,056.64 2,056.64 - 86,379/- GST80/2021/22 22.09.2021 1,46,186.15 3,654.65 3,654.65 - 1,53,495/- GST82/2021/22 25.09.2021 1,09,686.15 2,742.15 2,742.15 - 1,15,170/-
16. The defendant contended that the plaintiff filed GST Return without actual delivery of the material qua the said invoices. He contended that when his CA realized that he had wrongly claimed 'Input Tax Credit' (ITC) qua the said invoices, he reversed 'Input Tax Credit' (ITC) in the month of January, 2022. He contended that his CA issued a letter regarding reversal of 'Input Tax Credit' (ITC) in the sum of Rs. 24,983.89/- qua Central Tax and Rs. 24,983.89/- qua State Tax. He contended that Mr. Tarun Jain, the plaintiff's son raised invoices without actual delivery of material and filed GST Return, through Digitally signed by SANJAY electronic mode. SANJAY SHARMA SHARMA Date:
2025.12.09 13:28:33 +0530 CS (Comm.) No. 647/2024 Suresh Jain vs. Rahul Gupta Page No. 4 of 33
17. The defendant contended that he has not purchased goods worth Rs. 10,53,323/- from the plaintiff from 06.09.2021 to 25.09.2021. He contended that he has not purchased goods from the plaintiff since 30.06.2019. He denied that on 25.11.2021, he made payment of Rs. 25,000/- in the account of Mr. Tarun Jain, the plaintiff's son against the transactions in question. He contended that he was in urgent need of cash amount of Rs.
25,000/- and therefore, he had transferred an amount of Rs. 25,000/-, through online mode, to the account of Mr. Tarun Jain who had given him cash amount of Rs. 25,000/-. He contended that he used to make payments to the plaintiff, through his bank account, to account of the plaintiff with ICICI Bank, vide A/c. No. 112605501420. Therefore, the said transaction of Rs. 25,000/- with Mr. Tarun Jain is a separate transaction and it has no connection with the transactions in question.
18. The defendant contended that the plaintiff filed a copy of ledger w.e.f. 01.04.2017 to 31.03.2020 in complaint under Section 138 of NI Act. However, the plaintiff has not filed the said ledger in this suit. He contended that in his cross- examination, in the said complaint conducted on 09.07.2024, the plaintiff admitted that he had never given any cash loan to the defendant and the defendant used to make payment, through cheques, and he used to return extra amount, in cash, after settlement of invoices with the defendant. He contended that in the said cross-examination, the plaintiff stated that the payment reflecting at Point 'a', 'b' and 'c' were given in cash to the defendant against defective material. He contended that the said ledger reflects that instead of crediting Rs. 20,000/-, the plaintiff debited Rs. 20,000/- on 30.06.2018, Rs. 32,550/- on 15.07.2018 Digitally signed and Rs. 8,782/- on 27.08.2018. SANJAY by SANJAY SHARMA SHARMA Date: 2025.12.09 13:28:40 +0530 CS (Comm.) No. 647/2024 Suresh Jain vs. Rahul Gupta Page No. 5 of 33
19. The defendant contended that entry dated 04.07.2018 regarding issuance of invoice in the sum of Rs. 68,183/- is contrary to invoice in the sum of Rs. 68,184/- and journal entry dated 28.02.2018 of Rs. 2/- demonstrate that the plaintiff's ledger is fabricated. He contended that the plaintiff's ledger from 01.04.2021 to 31.03.2022 is also fabricated. He contended that as per his ledger, there was advance amount except on 20.04.2018 and 02.04.2019. He contended that he is entitled to recover an amount of Rs. 3,94,044/-, as on 02.08.2019. He contended that he replied demand notice of the plaintiff, vide reply dated 05.02.2022. The defendant contended that the plaintiff filed a false complaint under Section 138 NI Act. He contended that he had not issued the said cheques to the plaintiff towards discharge of any past, present or future liability. He contended that the plaintiff filled the amount in 'blank signed cheques' and presented them for encashment without his instruction. He denied that there was no agreement for payment of interest to the plaintiff. He denied liability to pay the suit amount. REPLICATION:
20. The plaintiff has not filed replication to written statement. ISSUES:
21. Vide order dated 19.02.2025, the Court framed issues, as under:
(1) Whether the plaintiff is entitled to a decree for recovery of Rs. 15,77,457/-?
(OPP) (2) Whether the plaintiff is entitled to pendente-lite and future interest @ 18% per annum?
(OPP) (3) Relief.Digitally signed
SANJAY by SANJAY
SHARMA
SHARMA Date: 2025.12.09
13:28:46 +0530
CS (Comm.) No. 647/2024 Suresh Jain vs. Rahul Gupta Page No. 6 of 33
THE PLAINTIFF'S EVIDENCE:
22. The plaintiff appeared as PW-1. He filed evidence-
affidavit Ex.PW1/1. He relied on documents, as under:
Sl. No. Documents Exhibits
1. GST Registration Certificate of the plaintiff Ex.PW1/A
2. GST Details of the defendant Ex.PW1/B
3. Eight Tax Invoices Ex.PW1/C (colly.)
4. Ledger w.e.f. 01.04.2021 to 31.03.2022 Ex.PW1/D
5. GST Return Ex.PW1/E
6. Copy of Cheque No. 607490 Mark 'P1'
7. Copy of Cheque No. 000034 Mark 'P2'
8. Demand Notice dated 28.01.2022 Ex.PW1/F
9. Postal Receipt Mark 'P3'
10. Reply-notice dated 05.02.2022 Ex.PW1/G
11. 'Non-Starter Report' dated 12.12.2024 Ex. PW1/H
12. Certificate under Section 63(4)(c) of BSA Ex.PW1/I
13. Affidavit under Order 11 Rule 6(3) CPC Ex.PW1/J
23. Mr. Tarun Jain appeared as PW-2. He filed evidence- affidavit Ex.PW2/1. He relied upon documents, as under:
Sl. No. Documents Exhibits
1. GST Registration Certificate of the plaintiff Ex.PW1/A
2. GST Details of the defendant Ex.PW1/B
3. Eight Tax Invoices Ex.PW1/C (colly.)
4. Ledger w.e.f. 01.04.2021 to 31.03.2022 Ex.PW1/D
5. GST Return Ex.PW1/E
6. Certificate under Section 63(4) of BSA Ex.PW1/I
THE DEFENDANT'S EVIDENCE:
24. The defendant appeared as DW-1. He filed evidence- affidavit Ex.DW1/A. He relied on documents, as under:
Sl. No. Documents Exhibits
1. Letter dated 23.01.2024 issued by CA Ex.DW1/1 (colly)
2. Ledger w.e.f. 01.08.2017 to 02.08.2019 Ex.DW1/2
3. 26 Invoices w.e.f. 24.08.2017 to 30.06.2019 Ex.PW1/3 (colly)
4. Statement qua ICICI Bank Ex.DW1/4 (colly)
SANJAY Digitally signed by
SANJAY SHARMA
SHARMA Date: 2025.12.09
13:28:54 +0530
CS (Comm.) No. 647/2024 Suresh Jain vs. Rahul Gupta Page No. 7 of 33
5. Statement qua DCB Bank Ex.DW1/5 (colly)
6. Complaint dt. 11.02.2025 to PS Gandhi Nagar Ex.DW1/6 (colly)
7. Cross-examination of the plaintiff in CC NI Ex.DW1/7 Act 774/2022 dated 09.07.2024
8. Ledger w.e.f. 01.04.2017 to 26.03.2019 Ex.DW1/8 (colly)
9. A copy of Passbook of the defendant Mark 'A'
25. DW-2 Mr. Kishan Bhardwaj, Inspector, CGST, Laxmi Nagar Division, Scope Minar, Delhi-110092 brought Form GSTR-3B of January, 2022 of the defendant Ex.DW2/A.
26. DW-3 Mr. Deepak, Deputy Manager-II, ICICI Bank, Laxmi Nagar, Delhi-110092 brought statement of bank account pertaining to A/c. No. 083105001682 in the name of ' M/s. Kamlesh Garments' w.e.f. 01.10.2017 to 09.09.2019 alongwith certificate under Section 2A of 'The Banker's Book of Evidence Act, 1891' and certificate under Section 65B(4)(c) of 'The Indian Evidence Act, 1872' Ex. DW3/A (colly).
27. DW-4 Mr. Aditya Kumar Prajapati, Assistant Manager-II, DCB Bank, Laxmi Nagar, Delhi-110092 brought statement of bank account pertaining to A/c. No. 18522900001854 in the name of 'M/s. Kamlesh Garments' w.e.f. 09.05.2018 to 19.02.2020 alongwith certificate under Section 65B of 'The Indian Evidence Act, 1872' Ex.DW4/A. APPEARANCE:
28. The Court has heard arguments of Mr. Padam Kumar Khanna, Ld. Counsel for the plaintiff and Mr. Ghanshyam Singh, Ld. Counsel for defendant and perused the written arguments filed by the plaintiff and the defendant. THE CONTENTIONS OF THE PLAINTIFF:
29. Ld. Counsel for the plaintiff contended that the plaintiff supplied 'fabrics' worth Rs. 10,49,323/- to the defendant w.e.f. 06.09.2021 to 25.09.2021, vide tax invoices Ex.PW1/CDigitally (colly.).signed SANJAY SHARMA by SANJAY SHARMA Date: 2025.12.09 13:29:07 +0530 CS (Comm.) No. 647/2024 Suresh Jain vs. Rahul Gupta Page No. 8 of 33
30. Ld. Counsel for the plaintiff contended that the plaintiff deposited GST qua the said invoices, vide GSTR Ex.PW1/E. He contended that the defendant availed 'Input Tax Credit' (ITC) qua the said invoices. He contended that the defendant admittedly issued two cheques which were returned unpaid on presentation. He contended that thereafter, the plaintiff issued demand notice dated 28.01.2022 Ex.PW1/F. He contended that thereafter, the defendant reversed ' Input Tax Credit' (ITC) qua the said invoices in March, 2022. He contended that there is presumption under Section 16(2)(a) and (b) of 'The Central Goods and Services Tax, 2017' regarding possession of tax invoices and receipt of goods. He contended that the defendant has not examined Mr. Pawan Chaudhary, CA who reversed 'Input Tax Credit' (ITC) and issued letter dated 23.01.2024 Ex.DW1/1. He contended that the defendant filed ledger Ex.DW1/2 containing a credit entry dated 01.08.2017 in the sum of Rs. 2,71,380/-. However, the defendant stated, in his cross-
examination, that he cannot state as to why the said amount was shown due against the plaintiff. He contended that ledger filed by the defendant is fabricated. He contended that the defendant stated that an amount of Rs. 3,94,044/- was due against the plaintiff, as on 02.08.2019. He contended that the defendant did not raise such contention in reply dated 05.02.2022 Ex.PW1/G. He contended that in the said reply, the defendant has not mentioned that he had inadvertently claimed ' Input Tax Credit' (ITC). He contended that the defendant neither issued any notice nor instituted any suit for recovery of amount of Rs. 3,94,044/-. He contended that the defendant never asked the plaintiff to return the said cheques. He contended that the plaintiff is entitled to a decree of the suit amount alongwith interest, as prayed.
Digitally signed bySANJAY SANJAY SHARMA SHARMA Date: 2025.12.09 13:29:13 +0530 CS (Comm.) No. 647/2024 Suresh Jain vs. Rahul Gupta Page No. 9 of 33 THE CONTENTIONS OF THE DEFENDANT:
31. Ld. Counsel for the defendant contended that the defendant had no business dealing with the plaintiff since 30.06.2019. He contended that the defendant has not purchased 'fabrics' from the plaintiff w.e.f. 06.09.2021 to 25.09.2021, vide tax invoices Ex.PW1/C (colly.). He contended that the plaintiff has not delivered any fabric to the defendant, vide tax invoices Ex.PW1/C (colly.). He contended that the defendant denied that he had purchased 'fabrics' from the plaintiff, vide tax invoices Ex.PW1/C (colly.) and further, an amount of Rs. 3,94,044/- was due to the defendant, as on 02.08.2019, vide ledger Ex.DW1/2.
He contended that the plaintiff has not filed replication to written statement and denied contentions raised in written statement and thereby, the plaintiff admitted the averments made in written statement. He contended that the plaintiff has not even filed any 'Affidavit of Admission / Denial of Documents ' as mandated under Order 11 Rule 4 CPC and therefore, documents filed by the defendant alongwith written statement are deemed admitted. In that regard, he relied upon judgment of Hon'ble High Court of Delhi in Mohan Madan vs. Smt. Sheel Gulati , CS(OS) No. 357/2006 decided on 19.08.2015. He contended that the plaintiff, in his cross-examination, stated that he is carrying business from premises No. X/4008, Street No. 15, Shanti Mohalla, Gandhi Nagar, Delhi-110031 and he is not carrying business from any other address. He contended that GST Registration Certificate of the plaintiff Ex.PW1/A states additional place of business of the plaintiff as 'Ground Floor, X/1633, Gali Number 12, Rajgarh Colony, New Delhi, East Delhi, Delhi, 110031 '. He contended that the plaintiff admitted that he has not filed any acknowledgement of goods / invoices and / or e-way bills.
Digitally signed bySANJAY SANJAY SHARMA SHARMA Date: 2025.12.09 13:29:19 +0530 CS (Comm.) No. 647/2024 Suresh Jain vs. Rahul Gupta Page No. 10 of 33
32. Ld. Counsel for the defendant contended that the plaintiff is not a competent witness as he categorically stated that he does not prepare invoices, delivery challans and statement of account. He contended that the plaintiff stated, in his cross-examination, that his son Tarun Jain prepared the said documents. However, the said documents do not bear signature of Mr. Tarun Jain. He contended that the plaintiff did not file certificate under Section 63(4)(c) of 'The Bharatiya Sakshya Adhiniyam, 2023 ' alongwith plaint and subsequently, he filed the said certificate without seeking leave of the Court. He contended that the plaintiff has not examined any witness from GST Department to prove his GST Return qua invoices Ex.PW1/C (colly.). He contended that PW-2 Mr. Tarun Jain, son of the plaintiff is an interested witness and he has not affirmed averments made in the plaint. He contended that the plaintiff has failed to discharge burden of proof. He contended that the case of the plaintiff must stand on its strength and it cannot derive any advantage from weakness of the case of the defendant. He contended that the plaintiff has failed to prove his case on the scale of ' preponderance of probabilities'. He contended that the said cheques were issued in the year 2016 and 2018 as ' blank signed security cheques' and the plaintiff misused the said cheques. In that regard, he referred statements of bank accounts of the defendant Ex.DW3/A and Ex.DW4/A. He contended that the cheques issued subsequent to the said cheques were honoured in the year 2016 and 2018 respectively. He contended that the defendant's CA wrongly availed 'Input Tax Credit' (ITC) qua the said invoices Ex.PW1/C (colly.) and he reversed 'Input Tax Credit' (ITC). In that regard, he referred letter dated 23.01.2024 issued by Mr. Pawan Chaudhary, CA. He prayed for dismissal of the suit. Digitally signed SANJAY by SANJAY SHARMA SHARMA Date: 2025.12.09 13:29:26 +0530 CS (Comm.) No. 647/2024 Suresh Jain vs. Rahul Gupta Page No. 11 of 33 ISSUE NO. 1:
(1) Whether the plaintiff is entitled to a decree for recovery of Rs. 15,77,457/-?
(OPP)
33. The case of the plaintiff can be broadly summarized, as under:
(a) The plaintiff supplied 'fabrics' worth Rs.
10,49,323/- to the defendant w.e.f. 06.09.2021 to 25.09.2021, vide 8 tax invoices Ex.PW1/C (colly.);
(b) The defendant issued 2 cheques Mark 'P1' and 'P2' towards part payment of the said amount. However, the said cheques were returned unpaid on presentation;
(c) The defendant transferred an amount of Rs. 25,000/- to the account of Mr. Tarun Jain, the plaintiff's son on 25.11.2021; and
(d) The plaintiff issued demand notice dated 28.01.2022 Ex.PW1/F qua the cheque amount.
34. The case of the defendant is broadly summarized, as under:
(a) The defendant has no business transaction with the plaintiff since 30.06.2019;
(b) The defendant has not purchased 'fabrics' from the plaintiff from 06.09.2021 to 25.09.2021, vide tax invoices Ex.PW1/C (colly.);
(c) The defendant's CA inadvertently claimed 'Input Tax Credit' (ITC) qua invoices Ex.PW1/C (colly.);
(d) The defendant transferred an amount of Rs.
25,000/- to the account of Mr. Tarun Jain, the plaintiff's son in respect of a separate transaction;
(e) The cheques in question were issued as ' blank signed security cheques' in the year 2016 and 2018;
(f) The plaintiff has not filed ledger for the period from 01.04.2017 to 31.03.2019;
(g) Entries in books of account are not sufficient to fasten liability upon the defendant;
(h) The defendant's CA reversed 'Input Tax Credit' (ITC) in January, 2022;
(i) The defendant was entitled to recover an amount of Rs. 3,94,044/- from the plaintiff, as on 02.08.2019; Digitally signed by and SANJAY SANJAY SHARMA
(j) The defendant replied the demand notice, videSHARMA Date:2025.12.09 reply dated 05.02.2022 Ex.PW1/G. 13:29:38 +0530 CS (Comm.) No. 647/2024 Suresh Jain vs. Rahul Gupta Page No. 12 of 33
35. In a civil case, the evidence is weighed on the scale of 'preponderance of probabilities'.
36. In Dr. N.G. Dastane vs. Mrs. S. Dastane , (1975) 2 SCC 326, Hon'ble Supreme Court of India held, as under:
"24. The normal rule which governs civil proceedings is that a fact can be said to be established if it is proved by a preponderance of probabilities. This is for the reason that under the Evidence Act, Section 3, a fact is said to be proved when the court either believes it to exist or considers its existence so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that it exists. The belief regarding the existence of a fact may thus be founded on a balance of probabilities. A prudent man faced with conflicting probabilities concerning a fact-situation will act on the supposition that the fact exists, if on weighing the various probabilities he links that the preponderance is in favour of the existence of the particular fact. As a prudent man, so the court applies this test for finding whether a fact in issue can be said to be proved. The first step in this process is to fix the probabilities, the second to weigh them, though the two may often intermingle. The impossible is weeded out at the first stage, the improbable at the second. Within the wide range of probabilities the court has often a difficult choice to make but it is this choice which ultimately determines where the preponderance of probabilities lies. Important issues like those which affect the status of parties demand a closer scrutiny than those like the loan on a promissory note : "the nature and gravity of an issue necessarily determines the manner of attaining reasonable satisfaction of the truth of the issue" Per Dixon, J. in Wright v. Wright (1948) 77 C.L.R. 191 at p. 210; or as said by Lord Denning, "the degree of probability depends on the subject-matter. In proportion as the offence is grave, so ought the proof to be clear" Blyth v. Blyth [1966] 1 A.E.R. 534 at
536. But whether the issue is one of cruelty or of a loan on a pronote, the test to apply is whether on a preponderance of probabilities the relevant fact is proved. In civil cases this, normally, is the standard of proof to apply for finding whether the burden of proof is discharged." (emphasis supplied)
37. The point for determination before the Court is whether the plaintiff has adduced sufficient evidence to discharge burden Digitally signed by SANJAY of proof on scale of 'preponderance of probabilities'.SANJAY SHARMA Date:
SHARMA 2025.12.09 13:29:46 +0530 CS (Comm.) No. 647/2024 Suresh Jain vs. Rahul Gupta Page No. 13 of 33
38. In order to prove his case, the plaintiff proved tax invoices Ex.PW1/C (colly.), ledger Ex.PW1/D, GSTR Ex.PW1/E, Cheques Mark 'P1' and 'P2' and demand notice Ex.PW1/F.
39. In his cross-examination, the plaintiff (PW-1) categorically stated that he has not filed acknowledgement / receipt of goods and e-way bills, as under:
"Q. Whether you have filed any document, on the file of the Court, that the defendant acknowledged the receipt of goods?
A. There is no such document on the file of the Court regarding acknowledgment of the receipt of the goods by the defendant.
... It is correct that there is no e-way bill."
40. Admittedly, there is no purchase order, transport receipt, acknowledgement of goods / invoices and e-way bills.
41. Issue before this Court is whether in the absence of the said documents, the plaintiff can prove delivery of ' fabrics' on the basis of other evidence relating to transactions.
42. In the opinion of this Court, the plaintiff can prove delivery of 'fabrics' on the basis of other evidence qua transactions.
43. While examining evidence, the Court must not see the nature and quality of evidence which should have been or could have been produced by the plaintiff.
44. The Court must evaluate the evidence on its record on the scale of 'preponderance of probabilities' to determine as to whether the plaintiff succeeded in discharging burden of proof.
45. To being with, it is admitted case of the defendant that he had business transactions with the plaintiff since 2016 till 30.06.2019, as under:
"PRELIMINARY OBJECTIONS &
SUBMISSIONS:
SANJAY
1.4 ... It is submitted that the defendant has not purchased the goods from the plaintiff from SHARMA 06.09.2021 to 25.09.2021 in any manner and after Digitally signed by dated 30.06.2019. ... SANJAY SHARMA Date: 2025.12.09 13:29:55 +0530 CS (Comm.) No. 647/2024 Suresh Jain vs. Rahul Gupta Page No. 14 of 33 BRIEF FACTS:
A. ... The defendant came in touch of the plaintiff and his son Shri Tarun Jain in the year 2016. The business relations were developed in between the plaintiff and defendant. At that time, the fabric / cloth was exempted from Sales / VAT / Tax. The plaintiff and his son had agreed for doing business with the defendant. ...
PARAWISE REPLY OF THE SUIT:
2. That Para No. 2 of the suit is a matter of record and not disputed to the extent that the defendant being proprietor of 'M/s. Kamlesh Garments', being one of the customer of the plaintiff had been purchased the goods and making the payment on account. ...
7. ... It is submitted that there was no agreement of paying interest by the defendant to the plaintiff from very beginning and moreover the defendant had used to purchase the goods from the plaintiff on account / running account and there remained an advance deposit with the plaintiff except for dated 20.04.2018 credit Rs. 44,853/- and 02.04.2019 credit Rs. 5,188/- and the defendant is to recover Rs. 3,94,044/- from the plaintiff. ..."
46. Admittedly, the defendant had business transactions with the plaintiff since 2016 till 30.06.2019. However, this is not the case of the defendant that he used to place written purchase order for delivery of 'fabrics'.
47. As regards delivery of tax invoices Ex.PW1/C (colly.), it can be stated that the defendant availed ' Input Tax Credit' (ITC) qua the said invoices Ex.PW1/C (colly.) and thereafter, his CA reversed 'Input Tax Credit' (ITC).
48. In this regard, it would be relevant to refer written statement filed by the defendant, as under:
"PRELIMINARY OBJECTIONS & SUBMISSIONS:
1.3 ... It is submitted that the defendant is likewise illiterate, studied upto 5th class only and taken the services of Chartered Accountant (CA) Pawan Chaudhary for the purpose of filing GST ReturnsSANJAY who had his office in Delhi NCR and later shifted far away at State - Jharkhand-814112 and has access to SHARMA the electronic record of the defendant who by mistakeDigitally signed by on the basis of GST portal / electronic record filedSANJAY SHARMA Date: 2025.12.09 13:30:01 +0530 CS (Comm.) No. 647/2024 Suresh Jain vs. Rahul Gupta Page No. 15 of 33 the GST Return of the defendant for the below mentioned invoices in brief as under:-
Invoice No. 2021-22 Taxable Value CGST 2.5% SGST 2.5% IGST Invoice 5% Value GST63/2021/22 06.09.2021 1,04,490.38 2,612.26 2,612.26 - 1,09,715/- GST64/2021/22 08.09.2021 1,46,605.90 3,665.15 3,665.15 - 1,53,936/- GST67/2021/22 11.09.2021 1,50,580.75 3,764.52 3,764.52 - 1,58,110/- GST71/2021/22 14.09.2021 1,28,653.38 3,216.33 3,216.33 - 1,35,086/- GST73/2021/22 16.09.2021 1,30,887.18 3,272.18 3,272.18 - 1,37,432/- GST77/2021/22 18.09.2021 82,265.53 2,056.64 2,056.64 - 86,379/- GST80/2021/22 22.09.2021 1,46,186.15 3,654.65 3,654.65 - 1,53,495/- GST82/2021/22 25.09.2021 1,09,686.15 2,742.15 2,742.15 - 1,15,170/-
and claimed Input Tax Credit wrongly which should have not been availed as those were the invoices for which M/s. Suresh Textiles had filed the return without actual supply of the material and later the said C.A. Pawan Choudhary have reversed the above mentioned Input Tax Credit in the month of January, 2022 when came to know that they had wrongly taken the ITC along with other ITC in the month of September, 2021 and gave it in writing on letter head under the signature and seal along with Form GSTR-3B of GST Return of ITC Reversed. Central Tax Rs. 24,983.89 and State / UT Tax Rs. 24,983.89 for the period January 2021-22."
49. At this juncture, it would be relevant to refer cross- examination of the defendant, as under:
"Q. Is it correct that you have taken input tax credit from GST Department against invoices as mentioned in Para No. 2 of the plaint from (i) to (viii)? At this stage, the witness is shown Para No. 2 of the plaint and invoices.
Ans. I have not taken GST input against the said invoices.
Q. What is the kind of services you are availing from your CA?
Ans. He looks after my work relating to GST only. I provide him invoices at the end of the month for GST purposes.
Q. Is it correct that you have stated in Para No. 1 of your evidence affidavit that "who by mistake on the basis of GST portal / electronic record filed the GST return of the defendant's firm for the invoices mentioned thereunder and claimed input tax credit wrongly"? What action you SANJAY have taken against your CA? SHARMA Ans. When I informed him regarding the said fact, he returned GST input." Digitally signed by SANJAY SHARMA Date: 2025.12.09 13:30:07 +0530 CS (Comm.) No. 647/2024 Suresh Jain vs. Rahul Gupta Page No. 16 of 33
50. Therefore, it is evident that the defendant had provided tax invoices Ex.PW1/C (colly.) to his CA for claiming ' Input Tax Credit' (ITC).
51. It is proved that the plaintiff delivered tax invoices Ex.PW1/C (colly.) to the defendant.
52. In that regard, it would be relevant to refer Section 16 of 'The Central Goods and Services Tax, 2017', as under:
"16. Eligibility and conditions for taking input tax credit (1) Every registered person shall, subject to such conditions and restrictions as may be prescribed and in the manner specified in section 49, be entitled to take credit of input tax charged on any supply of goods or services or both to him which are used or intended to be used in the course or furtherance of his business and the said amount shall be credited to the electronic credit ledger of such person. (2) Notwithstanding anything contained in this section, no registered person shall be entitled to the credit of any input tax in respect of any supply of goods or services or both to him unless,-
(a) he is in possession of a tax invoice or debit note issued by a supplier registered under this Act, or such other tax paying documents as may be prescribed;
[(aa) the details of the invoice or debit note referred to in clause (a) has been furnished by the supplier in the statement of outward supplies and such details have been communicated to the recipient of such invoice or debit note in the manner specified under section 37;]
(b) he has received the goods or services or both. [Explanation : For the purposes of this clause, it shall be deemed that the registered person has received the goods or, as the case may be, services-"
53. Admittedly, the defendant had availed 'Input Tax Credit' (ITC) qua tax invoices Ex.PW1/C (colly.). He admitted that his CA availed 'Input Tax Credit' (ITC) on the basis of invoices provided by him. Therefore, there is presumption of possession Digitally signed of tax invoices and receipt of goods. SANJAY by SANJAY SHARMA SHARMA Date: 2025.12.09 13:30:13 +0530 CS (Comm.) No. 647/2024 Suresh Jain vs. Rahul Gupta Page No. 17 of 33
54. In Haryana Medical Hall and Others vs. Dr. Roshanlal Aggarwal and Sons Pvt. Ltd., 2023 SCC OnLine Del 8105, Hon'ble High Court of Delhi held, as under:
"The respondent had also produced GSTR returns, which were referred to by the learned Commercial Court. The contention that the said returns had no evidentiary value, is erroneous. The said returns clearly indicated that the respondent had paid central tax as well as state/UT tax and the benefit of such input tax credit of the said amount would be available to the appellants."
55. However, the said presumption is rebuttal in nature. Therefore, next issue before the Court is whether the defendant has been able to rebut the said presumption.
56. The case of the defendant is that his CA mistakenly availed 'Input Tax Credit' (ITC) qua tax invoices Ex.PW1/C (colly.) and when he came to know about the said fact, he reversed 'Input Tax Credit' (ITC) in the month of January, 2022. In this regard, he relied on letter dated 23.01.2024 Ex.DW1/1, as under:
SHASHI & CO. CA Pawan Choudhary Chartered Accountants +91-9555314255/6432-796257 [email protected] Address: At Baba Colony, Dumka Road Baijnathpur, Near UCO Bank, Deoghar Jharkhand-814112 DECLARATION FOR INPUT TAX CREDIT We have examined the books of accounts of Kamlesh Garments (Prop.: Rahul Gupta) (PAN - BJYPG8866J & GSTIN: 07BJYPG8866J1Z6) having shop at R-21, RAMESH PARK, LAXMI NAGAR, East Delhi, Delhi, 110092 produced the books of accounts before us and based upon such examinations and information and explanations received. We hereby declare that the input tax-credit has been wrongly availed against the below mentioned invoices of Suresh Textile which should have not been availed as these are the invoices for which Suresh Textile has filed the return without giving us the actual supply Digitally of signed the material. by SANJAY SANJAY SHARMA SHARMA Date:
2025.12.09 13:30:20 +0530 CS (Comm.) No. 647/2024 Suresh Jain vs. Rahul Gupta Page No. 18 of 33 Invoice No. 2021-22 Taxable Value CGST 2.5% SGST 2.5% IGST Invoice 5% Value GST63/2021/22 06.09.2021 1,04,490.38 2,612.26 2,612.26 - 1,09,715/- GST64/2021/22 08.09.2021 1,46,605.90 3,665.15 3,665.15 - 1,53,936/- GST67/2021/22 11.09.2021 1,50,580.75 3,764.52 3,764.52 - 1,58,110/- GST71/2021/22 14.09.2021 1,28,653.38 3,216.33 3,216.33 - 1,35,086/- GST73/2021/22 16.09.2021 1,30,887.18 3,272.18 3,272.18 - 1,37,432/- GST77/2021/22 18.09.2021 82,265.53 2,056.64 2,056.64 - 86,379/- GST80/2021/22 22.09.2021 1,46,186.15 3,654.65 3,654.65 - 1,53,495/- GST82/2021/22 25.09.2021 1,09,686.15 2,742.15 2,742.15 - 1,15,170/-
Total 9,99,355.42 24,983.89 24,983.89 10,49,323 Later, we have reversed the above-mentioned Input Tax Credit in the month of January-2022(Return copy enclosed) when we came to know that we have wrongly taken the ITC along with other ITC in the month of September-2021.
For SHASHI & CO.
Chartered Accountants
Firm Registration Number: 004785C
Pawan Kumar Choudhary
(Partner)
Μ.ΝΟ. 443503 Place:New Delhi
UDIN: 25443503BMIDGF1519 Date:23.01.2024"
57. In this regard, the defendant examined DW-2 Insp. Kishan Bhardwaj, CGST and relied on Form GSTR-3B of January, 2022 Ex.DW2/A.
58. A perusal of Form GSTR-3B Ex.DW2/A would show that the defendant reversed 'Input Tax Credit' (ITC) qua tax invoices Ex.PW1/C (colly.) on 16.03.2022.
59. At this juncture, it would be relevant to note that the plaintiff presented the cheques Mark 'P1' and 'P2' and thereafter, he demanded cheque amount, vide demand notice dated 28.01.2022 Ex.PW1/F. The defendant replied the said demand notice, vide reply dated 05.02.2022 Ex.PW1/G. However, in the said reply Ex.PW1/G, the defendant has not stated that he wrongly claimed ' Input Tax Credit' (ITC) qua tax Digitally signed by invoices Ex.PW1/C (colly.) and he got it reversed.SANJAY SANJAY SHARMA SHARMA Date:
2025.12.09 13:30:27 +0530 CS (Comm.) No. 647/2024 Suresh Jain vs. Rahul Gupta Page No. 19 of 33
60. Therefore, reversal of 'Input Tax Credit' (ITC) by the defendant on 16.03.2022 is of no avail.
61. Moreover, the defendant has not examined CA Mr. Pawan Choudhary in order to explain the circumstances in which he had availed 'Input Tax Credit' (ITC) qua tax invoices Ex.PW1/C (colly.).
62. In Brihan Karan Sugar Syndicate Private Limited vs. Yashwantrao Mohite Krushna Sahakari Sakhar Karkhana , 2023 SCC OnLine SC 1163, Hon'ble Supreme Court of India held, as under:
"13. ... Exhibits 73, 73.1 to 73.4 are the statement of sales as well as advertisement and sale promotion expenses certified by a Chartered Accountant.
However, we find that the Chartered Accountant was not examined to prove the statements. In the examination-in-chief of Shri K.K. Kalani, in paragraph 10, only the figures of sales and marketing expenses have been quoted. Prima facie, it appears to us that at the time of the final hearing of the suit, it was incumbent upon the appellant-plaintiff to actually prove the figures of sales and expenditure incurred on the advertising and promotion of the product. Only by producing the statements without proving the contents thereof, the appellant could not have established its reputation or goodwill in connection with the goods in question. ..."
63. Therefore, reliance of the defendant on certificate dated 23.01.2024 Ex.DW1/1 regarding reversal of 'Input Tax Credit' (ITC) is of no avail.
64. Admittedly, the defendant had issued the said cheques Mark 'P1' and 'P2' in favour of the plaintiff. However, the defence is that the defendant had issued the said cheques as 'blank signed security cheques' in the year 2016 and 2018. It is further case of the defendant that cheques succeeding to the said cheques were encashed in the year 2016 and 2018. In this regard, the defendant relied on bank statements Ex.DW3/A and Digitally signed Ex.DW4/A respectively. SANJAY by SANJAY SHARMA SHARMA Date: 2025.12.09 13:30:34 +0530 CS (Comm.) No. 647/2024 Suresh Jain vs. Rahul Gupta Page No. 20 of 33
65. Before examining merit of contention of Ld. Counsel for the defendant on the aspect of misuse of the said cheques Mark 'P1' and 'P2', it would be relevant to refer reply-notice dated 05.02.2022 Ex.PW1/G, as under:
"It is made clear in the first sentence that my client, is a semi-literate person and is not even middle pass. My client used to often go from the shop for long durations for attending to exigencies of business. Therefore, in order to ensure that no person is harassed in the absence of my client from the shop for demanding payment, my client used to leave few blank signed cheques with the attendant remaining at the shop so that in case any eventuality arose to give any cheque to a person, one of the blank signed cheques could be given by the attendant to such person after getting the same filled up from the person collecting the cheque. It appears that your client has illegally by mis-representation and / or fraud collected two blank signed leaves and has illegally attempted to misuse the same by illegally filling up the same without the knowledge and consent of my client nor did my client make any purchase from your client after 2019 and therefore the question of issuing cheques in the month of October 2021 does not arise.
Similarly, it is apparent that Cheque leaf bearing No. 000034 allegedly dated 31.10.2021 allegedly for Rs. 1,53,936/- of DCB Bank, Laxmi Nagar, Delhi-110092 has apparently been illegally and fraudulently misused by your client by filling up the same without the knowledge and consent of my client, ...
Thus, it is apparent that both the cheques referred to in the notice under reply have been illegally and fraudulently misused by your client by illegally and fraudulently procuring the same without the knowledge and consent of my client. ...
3. ... The cheques falsely set out in para under reply have apparently been illegally misused by your client after illegally and fraudulently procuring the same without knowledge and consent of my client. ...
4. Para 4 of the notice under reply is vehemently SANJAY denied except that your client has illegally presented both the said cheques after illegally and SHARMA fraudulently procuring the same and fraudulently Digitally signed by misusing the same. ..." (emphasis supplied) SANJAY SHARMA Date: 2025.12.09 13:30:42 +0530 CS (Comm.) No. 647/2024 Suresh Jain vs. Rahul Gupta Page No. 21 of 33
66. From the aforesaid reply-notice dated 05.02.2022 Ex.PW1/G (also exhibited as Ex.DW1/P1), it is seen that initially, the case of the defendant was that he had left ' blank signed cheques' with his attendant with the instruction to issue after filling it to any person in his absence.
67. In complaint dated 11.02.2025 Ex.DW1/6 to PS Gandhi Nagar, the stand of the defendant was that the plaintiff obtained the said cheques Mark 'P1' and 'P2' as 'blank security cheques', translated, as under:
"2. That the applicant had a discussion with Suresh Jain having shop X/3470, New Jain Market, Shanti Mohalla, Gandhi Nagar, Delhi in the name of ' M/s. Suresh Textiles' for purchasing material on cash and credit and traders Suresh Jain had obtained two cheques, vide Cheque No. 607490 'State Bank of India' and Cheque No. 000034 'DCB Bank' as 'blank security cheques' and thereafter, we had started business with each other and I used to make payment, vide cheque and cash."
68. From the perusal of the said complaint Ex.DW1/6, it is evident that the defendant made a complaint that he had issued 'blank security cheques' to the plaintiff.
69. However, in his written statement, the defendant stated, as under:
"BRIEF FACTS:
A. ... The plaintiff had taken one blank signed cheque from the defendant as security on the pretext of business and market terms the Cheque Number 607490 of State Bank of India in the year 2016 and one Cheque Number 000032 of DCB Bank in the year 2018 without any liability."
70. From the aforesaid, it is evident that the case of the defendant regarding issuance of cheques to the plaintiff is vacillating, inconsistent and mutually destructive.
71. In reply-notice dated 05.02.2022 Ex.DW1/P1, the case of the defendant was that the plaintiff fraudulently obtained the said cheques from his attendant in his absence without his knowledge.
Digitally signed by SANJAY SANJAY SHARMA SHARMA Date: 2025.12.09 13:30:50 +0530 CS (Comm.) No. 647/2024 Suresh Jain vs. Rahul Gupta Page No. 22 of 33
72. On the contrary, in complaint dated 11.02.2025 Ex.DW1/6 and written statement, he stated that he had issued the said cheques as 'blank security cheques'.
73. Admittedly, the defendant had business relationship with the plaintiff till 30.06.2019. Cheque No. 607490 drawn on ' State Bank of India' was pertaining to the year 2016. Cheque No. 000034 drawn on 'DCB Bank' was pertaining to the year 2018. It means the plaintiff obtained 'blank security cheques' from the attendant of the defendant in his absence without his knowledge in the year 2016 and 2018 respectively. However, the defendant never objected to collection of Cheque No. 607490 till 2018 and his attendant issued another 'blank security cheque', vide Cheque No. 000034 drawn on 'DCB Bank' in the year 2018. Still, the defendant never issued any written notice or complaint or communication to the plaintiff.
74. If the defendant had issued the said cheques as ' blank security cheques', there is no explanation as to why the defendant did not ask the plaintiff to return Cheque No. 607490 drawn on 'State Bank of India' at the time of issuance of Cheque No. 000034 drawn on 'DCB Bank' in the year 2018. There is no explanation as to why the defendant never asked the plaintiff to return the said 'security cheques' after 2018 till filing of the suit, if the defendant had no liability towards the plaintiff and he was entitled to recover an amount of Rs. 3,94,044/- from the plaintiff since 02.08.2019.
75. At this stage, it would be relevant to refer cross- examination of the defendant, as under:
"... I did not issue any written notice to the plaintiff to demanding the cheques regarding which complaint under Section 138 NI Act filed by the plaintiff. ... "Digitally signed by SANJAY
SANJAY SHARMA
SHARMA Date:
2025.12.09
13:30:56 +0530
CS (Comm.) No. 647/2024 Suresh Jain vs. Rahul Gupta Page No. 23 of 33
76. The defendant cannot derive any advantage from the contention / evidence that the cheques succeeding the cheques Mark 'P1' and 'P2' were presented for transactions in his account in the year 2016 and 2018.
77. There is no legal preposition or banking rule / regulation that a drawer cannot issue a cheque from the cheque book of the preceding years.
78. The defendant after issuing the said cheques Mark 'P1' and 'P2' from the cheque book obtained by him in the year 2016 and 2018 cannot contend that the said cheques are ' blank security cheques' and the plaintiff misused the said cheques by filling the amount in the year 2021.
79. The case of the defendant is that he had not made payment of Rs. 25,000/- to the account of the plaintiff and he had made payment of the said amount to the account of Mr. Tarun Jain, the plaintiff's son on 25.11.2021 towards a separate transaction.
80. In this regard, it would be relevant to note that Mr. Tarun Jain appeared as PW-2. However, the defendant did not confront him with his defence that the defendant was in urgent need of cash amount of Rs. 25,000/- and he transferred an amount of Rs. 25,000/- to the account of PW-2 Mr. Tarun Jain who had given him cash amount of Rs. 25,000/-.
81. In this regard, the plaintiff categorically stated that the defendant deposited an amount of Rs. 25,000/- in his son's account, as under:
"... It is correct that there was no agreement with the defendant to make payment of the amount to my son Tarun Jain. Vol. The defendant deposited an amount of Rs. 25,000/- in my son's account."
82. Moreover, it is not the case of the defendant that PW-2 Mr. Tarun Jain had no connection with business of the plaintiff.
Digitally signed SANJAY by SANJAY
SHARMA
SHARMA Date: 2025.12.09
13:31:03 +0530
CS (Comm.) No. 647/2024 Suresh Jain vs. Rahul Gupta Page No. 24 of 33
83. In this regard, it would be appropriate to refer written statement of the defendant, as under:
BRIEF FACTS:
A. ... The defendant came in touch of the plaintiff and his son Shri Tarun Jain in the year 2016. The business relations were developed in between the plaintiff and defendant. ...
84. Moreover, timeline of the transactions would show that transfer of an amount of Rs. 25,000/- to the account of PW-2 Mr. Tarun Jain was in relation to tax invoices Ex.PW1/C (colly.).
85. The plaintiff supplied 'fabrics' worth Rs. 10,49,323/- to the defendant from 06.09.2021 to 25.09.2021. The plaintiff presented the cheques Mark 'P1' and 'P2' for encashment which were returned unpaid on 02.11.2021. The defendant transferred an amount of Rs. 25,000/- to the account of PW-2 Mr. Tarun Jain on 25.11.2021. Thereafter, the plaintiff issued demand notice dated 28.01.2022 Ex.PW1/F. However, the defendant, in his reply-notice dated 05.02.2022 Ex.DW1/P1, did not state that he transferred an amount of Rs. 25,000/- to the account of PW-2 Mr. Tarun Jain in respect of a separate transaction.
86. Thus, it is proved that the defendant transferred an amount of Rs. 25,000/- to the account of PW-2 Mr. Tarun Jain on 25.11.2021 towards partial discharge of his liability in respect of tax invoices Ex.PW1/C (colly.).
87. As regards contention of Ld. Counsel for the defendant that an amount of Rs. 3,94,044/- was due against the plaintiff, as on 02.08.2019 and reliance on ledger Ex.DW1/2, it can be stated that in reply-notice dated 05.02.2022 Ex.DW1/P1, the case of the defendant was that he cleared outstanding dues in mid 2019 and he did not state that an amount of Rs. 3,94,044/- was due against Digitally signed the plaintiff, as on 02.08.2019. by SANJAY SHARMA SANJAY Date:
SHARMA 2025.12.09
13:31:10
+0530
CS (Comm.) No. 647/2024 Suresh Jain vs. Rahul Gupta Page No. 25 of 33
88. In this regard, it would be relevant to refer reply-notice Ex.DW1/P1, as under:
"... As a matter of fact the dealings with your client and my client had stopped in mid 2019 after your client refused to have dealings with my client and insisted for the clearance of the earlier outstanding on account of purchases made by my client prior to mid 2019. My client therefore, stopped having any dealing with your client after 31 August, 2019 after having cleared all the outstanding dues of your client for the dealings held by my client with your client. Thereafter, my client never approached your client for purchase of any goods or material nor purchased any cloth or material from your client after having fully cleared your client's ledger account in mid 2019 as above stated."
(emphasis supplied)
89. Moreover, the defendant did not confront the plaintiff, in his cross-examination, that an amount of Rs. 3,94,044/- was due against him, as on 02.08.2019.
90. The defendant neither issued any demand notice nor instituted any suit for recovery of the said amount of Rs. 3,94,044/- against the plaintiff.
91. In this regard, it would be appropriate to refer cross- examination of the defendant, as under:
"Q. I put it to you that in reply-notice Ex.DW1/P1 at point X to X-1, it is mentioned that "My client therefore, stopped having any dealing with your client after 31 August, 2019 after having cleared all the outstanding dues of your client for the dealings held by my client with your client".
Ans. It is a matter of record.
Q. I put it to you that in Para No. 6 of your evidence affidavit, you have stated that "I am to recover against the plaintiff a sum of Rs. 3,94,044/- as on 02.08.2019 for which I am Pursuing legal remedy"
Ans. It is correct.
Q. Can you give break-up / details of the said amount of Rs. 3,94,044/-, which you are stating to be due SANJAY from the plaintiff?
Ans. It is against the advanced amount paid by me SHARMA to the plaintiff. It is already mentioned in the bills and Digitally signed by the statements of account. SANJAY SHARMA Date: 2025.12.09 13:31:16 +0530 CS (Comm.) No. 647/2024 Suresh Jain vs. Rahul Gupta Page No. 26 of 33 Q. Can you show any statement of account from file of this case that the said amount of Rs. 3,94,044/- was due from the plaintiff?
Ans. In that regard, I have filed statement of account Ex. DW1/2.
It is incorrect to suggest that statement of account Ex.DW1/2 is a false and fabricated document.
Q. I put it to you whether you had demanded the said due amount of Rs. 3,94,044/- from the plaintiff during the period 02.08.2019 to December 2024 in writing?
Ans. No."
(emphasis supplied)
92. As regards reliance of the defendant on ledger Ex.DW1/2 in order to demonstrate that an amount of Rs. 3,94,044/- was due against the plaintiff, as on 02.08.2019, it can be stated that the defendant failed to prove his ledger. The defendant has not filed any proof regarding entry dated 01.08.2017 in the sum of Rs. 2,71,380/- in ledger Ex.DW1/2. The defendant has not filed any debit note in respect of entries dated 15.07.2018 in the sum of Rs. 32,550/- and 27.08.2018 in the sum of Rs. 8,782/-.
93. In this regard, it would be relevant to refer cross- examination of the defendant, as under:
"... The amount of Rs. 2,71,380/- debited on 01.08.2017 in ledger account Ex.DW1/2 was the advanced payment. I have not proof except the said entry regarding payment of the said amount as advanced to the plaintiff. ...I have not issued any debit note in respect of entries dated 15.07.2018 and 27.08.2018 as shown in Ex.DW1/2. It is wrong to suggest that the document Ex.DW1/2 is a fabricated document. ..."
94. Therefore, the defence of the defendant that an amount of Rs. 3,94,044/- was due against the plaintiff and reliance on ledger Ex.DW1/2 is of no avail. Similarly, non-filing of ledger by the plaintiff for the period preceding to 2021-22 is inconsequential. On this aspect, the plaintiff categorically stated Digitally signed by that the entire amount before 06.09.2021 stood settled.SANJAY SANJAY SHARMA SHARMA Date:
2025.12.09 13:31:22 +0530 CS (Comm.) No. 647/2024 Suresh Jain vs. Rahul Gupta Page No. 27 of 33
95. As regards contention that non-filing of replication would amount to admission of facts stated in written statement and reliance on judgment in Mohan Madan (supra), it can be stated that non-filing of a replication would not amount to admission of the facts stated in the written statement. In this regard, in K. Laxmanan vs Thekkayil Padmini & Ors., AIR 2009 SC 951, Hon'ble Supreme Court of India held, as under:
"31. Pleadings as we understand under the Code of Civil Procedure (for short the "Code") and as is defined under the provision of Rule 1 Order VI of the Code consist only of a plaint and a written statement. The respondents / plaintiff could have filed a replication in respect to the plea raised in the written statement, which if allowed by the court would have become the part of the pleadings, but mere non filing of a replication does not and could not mean that there has been admission of the facts pleaded in the written statement. The specific objection in the form of denial was raised in affidavits filed in respect of the injunction applications which were accepted on record by the Trial Court and moreover the acceptance on record of the said affidavit was neither challenged nor questioned by the present appellant."
(emphasis supplied)
96. In Naresh Kumar Sodhi & Ors. vs. Hari Ram Chaurasia & Anr., 2015:DHC:1761, Hon'ble High Court of Delhi held, as under:
"3. I have considered the submissions and have also gone through the two judgments relied upon by the learned counsel for the appellants. The judgments which have been sought to be relied upon by the appellants, in the instant case, have no applicability and do not lay down the propositions that non-filing of replication to the written statement would tantamount to an admission of a fact. Order VI Rule 1 CPC clearly lays down that pleadings constitutes of only the plaint and the written statement. Therefore, replication not being a part of the pleadings, need not be filed by a party." (emphasis supplied)
97. Therefore, there is no warrant in law for the proposition that mere non-filing of replication amounts to admission of the Digitally signed by SANJAY case set-out in the written statement. SANJAY SHARMA SHARMA Date:
2025.12.09 13:31:33 +0530 CS (Comm.) No. 647/2024 Suresh Jain vs. Rahul Gupta Page No. 28 of 33
98. As regards contention that the plaintiff's evidence has no evidentiary value as certificate under Section 63 BSA was furnished by PW-2 Tarun Jain, it can be stated that PW-2 Tarun Jain is son of the plaintiff and the electronic device wherein the said electronic record was stored and retrieved was in his control and he downloaded electronic documents and furnished certificate under Section 63 BSA. A certificate under Section 63 BSA can be furnished by any responsible person having lawful control over the electronic device, at any stage of the suit. PW-2 Tarun Jain is also associated with the plaintiff's business. In this regard, it would be appropriate to refer evidence-affidavit Ex.DW1/A of the defendant, as under:
"5. ... I say that I came in touch of the plaintiff and his son Shri Tarun Jain in the year 2016. The business relations were developed in between the plaintiff and me. At that time, the fabric / cloth was exempted from Sales / VAT / Tax. I say that the plaintiff and his son Tarun Jain had agreed for doing business with me. ..."
(emphasis supplied)
99. In Arjun Panditrao Khotkar vs. Kailash Kushanrao Gorantyal and Ors., MANU/SC/0521/2020, Hon'ble Supreme Court of India held, as under:
"58. It may also be seen that the person who gives this certificate can be anyone out of several persons who occupy a 'responsible official position' in relation to the operation of the relevant device, as also the person who may otherwise be in the 'management of relevant activities' spoken of in Sub- section (4) of Section 65B. Considering that such certificate may also be given long after the electronic record has actually been produced by the computer, Section 65B(4) makes it clear that it is sufficient that such person gives the requisite certificate to the "best of his knowledge and belief" (Obviously, the word "and" between knowledge and belief in Section 65B(4) must be read as "or", as a person cannot testify to the best of his knowledge and belief at the Digitally signed same time)." by SANJAY SANJAY SHARMA SHARMA Date:
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100. Weighing the case of the plaintiff and the defendant on the scale of 'preponderance of probabilities', this Court is of the considered opinion that the scales are highly tilted towards the plaintiff.
101. What crystallized from the aforesaid discussion is that the plaintiff succeeding in proving the facts, as under:
(a) The plaintiff supplied 'fabrics' worth Rs.
10,49,323/- to the defendant w.e.f. 06.09.2021 to 25.09.2021, vide tax invoices Ex.PW1/C (colly.);
(b) The defendant availed 'Input Tax Credit' (ITC) in respect of tax invoices Ex.PW1/C (colly.);
(c) The defendant issued cheques Mark 'P1' and 'P2' in discharge of his liability qua the said invoices;
(d) The defendant transferred an amount of Rs. 25,000/- to the account of PW-2 Mr. Tarun Jain on 25.11.2021;
(e) The defendant failed to rebut statutory presumption under 'The Central Goods and Services Tax, 2017' and 'Negotiable Instruments Act, 1881'; and
(f) The defendant was liable to pay an amount of Rs. 10,24,323/-, as on 06.01.2022.
102. Therefore, the plaintiff is entitled to a decree for recovery of principal sum of Rs. 10,24,323/-.
103. As regards claim of the plaintiff for recovery of Rs. 5,53,134/- as pre-suit interest @ 18% per annum w.e.f. 26.11.2021 to 25.11.2024, it can be stated that there is no agreement between the parties regarding the rate of interest on unpaid amount. Moreover, there is no credit period mentioned in the invoices Ex.PW1/C (colly.). Invoices raised by the plaintiff stipulate that interest @ 24% p.a. will be charged from the date of invoice. An unilateral stipulation in invoices would not entitle the plaintiff to the said rate of interest. There is no evidence that the defendant ever agreed to the said rate of interest. The plaintiff Digitally signed by has not debited interest in his ledger Ex.PW1/D.SANJAY SANJAY SHARMA SHARMA Date:
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104. According to ledger for the period from 01.04.2021 to 31.03.2022 Ex.PW1/D, an amount of Rs. 10,24,323/- was due against the defendant. The plaintiff has not raised any GST invoice regarding pre-suit interest and debited the said invoice in his ledger. There is no evidence that the said rate of interest is usual market rate of interest. There is no evidence that the said rate of interest is paid by the banks. The plaintiff has not led any evidence to prove any market custom or usage or any practice of payment of the said interest on outstanding amount. The rate of interest claimed by the plaintiff on unpaid amount is on higher side. The plaintiff filed the suit for recovery after 2 years and 11 months from the date of last transaction on 25.11.2021.
105. It is one thing to say that the plaintiff is entitled to maintain a suit at any time within period of limitation of three years from the date of accrual of cause of action. It is another thing to say that the plaintiff can seek interest on unpaid amount for inordinate and unexplained delay in filing of the suit.
Precisely, this issue was raised before Hon'ble Supreme Court of India in a Five-Judge Bench judgment in Central Bank of India vs. Ravindra & Ors., (2002) 1 SCC 367, as under:
"46. ... Thirdly, the court is not powerless to deny the bank's claim for interest, if in the facts and circumstances of a given case the court is persuaded to hold that filing of the suit was delayed for the purpose of deliberately gaining an unfair advantage over adverse financial condition of the defendant. In such cases the pre-suit interest though claimed in accordance with the contract would be denied by the Court on the ground of public policy and on the ground of the creditor having tried to gain an unfair advantage over the debtor by a deliberate inaction of himself, no one can take advantage of its own wrong." (emphasis supplied) Digitally signed by SANJAY SANJAY SHARMA SHARMA Date:
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106. In view of the fact that the nature of transaction is commercial and the defendant withheld legitimate amount due to the plaintiff and utilized it for his gain, it would be appropriate to grant interest @ 6% per annum w.e.f. 26.11.2021 till filling of the suit. Accordingly, issue No. 1 is decided in favour of the plaintiff and against the defendant.
ISSUE NO. 2:
(2) Whether the plaintiff is entitled to pendente-lite and future interest @ 18% per annum?
(OPP)
107. The plaintiff is claiming pendente-lite and future interest @ 18% per annum. For the reasons aforesaid, the plaintiff is entitled to pendente-lite and future interest @ 6% per annum on the principal amount. Accordingly, issue No. 2 is decided in favour of the plaintiff and against the defendant.
RELIEF
108. Therefore, the suit of the plaintiff is decreed with costs and a decree in the sum of Rs. 10,24,323/- alongwith interest @ 6% per annum w.e.f. 26.11.2021 till realization is passed in favour of the plaintiff and against the defendant. Decree sheet be drawn.
Digitally signed File be consigned to record room. by SANJAY SHARMA SANJAY Date: SHARMA 2025.12.09 13:32:08 +0530 Announced in the open Court SANJAY SHARMA-II
on this 09 December, 2025 DJ (Commercial Court)-03 (Shahdara) th Karkardooma Courts, Delhi CS (Comm.) No. 647/2024 Suresh Jain vs. Rahul Gupta Page No. 32 of 33 Suresh Jain vs. Rahul Gupta CNR No.: DLSH01-007842-2024 CS (Comm.) No. 647/2024 09.12.2025 Present : Mr. P.K. Khanna, Ld. Counsel with Ms. Shefali Aggarwal, Ld. Counsel for the plaintiff. Mr. Ghanshyam Singh, Ld. Counsel for the defendant (through Video Conferencing).
Vide separate judgment, the suit of the plaintiff is decreed with costs and a decree in the sum of Rs. 10,24,323/- alongwith interest @ 6% per annum w.e.f. 26.11.2021 till realization is passed in favour of the plaintiff and against the defendant. Decree sheet be drawn. File be consigned to record room.
Digitally signed by SANJAY SANJAY SHARMA
SHARMA Date:
2025.12.09
13:32:18 +0530
Sanjay Sharma-II
DJ (Commercial Court)-03
Shahdara, KKD, Delhi
09.12.2025
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