Delhi District Court
Narender Khurana vs M/S Rana Polycot Limited on 21 April, 2026
CNR No. DLCT010086982022
IN THE COURT OF SHRI DEVENDRA KUMAR SHARMA:
DISTRICT JUDGE (COMMERCIAL COURT)- 03: CENTRAL
TIS HAZARI COURT (EXTENSION BLOCK) : DELHI.
CS (COMM) No. 1390/2022
In the matter of :-
Narender Khurana (Since deceased)
Through LRs
1. Mrs. Meena Khurana
2. Mrs. Rohini Khurana
3. Mrs. Shikha Khurana
4. Mr. Karan Khurana
All at 113, Dilkhush Building
Chowk Tilak Bazar,
Delhi-110006 ......Plaintiffs
Versus
M/s Rana Polycot Limited
Through its director/A.R.
Having its Registered Office at:
SCO No.49-50, Sector 8-C
Madhya Marg,
Chandigarh-160009
Email: [email protected],
[email protected],
[email protected]
Mobile No.9815900907
Also at:
Village Alamgir,
Chandigarh-Ambala Highway
Tehsil Lalru, District Mohali,
Punjab. ......Defendant
CS (COMM) No.1390/2022 Pg. 1 / 51
Digitally signed
Devendra by Devendra
Kumar Sharma
Kumar Date:
Sharma 2026.04.21
15:47:37 +0530
Date of Institution : 31.05.2022
Date on which Judgment reserved : 09.04.2026
Date on which judgment pronounced : 21.04.2026
SUIT FOR RECOVERY
JUDGMENT
1. Before this Court set to adjudicate on myriad issues flagged on behalf of both the parties, let the Court to spell out laconically the landscape of the pleadings.
(A) Pleading of the Parties:-
2. This is a suit for recovery of Rs.25,38,223/- filed by plaintiff against the defendants.
3. Succinctly stated facts of the case as set out in the plaint are that the plaintiff is proprietor of the firm M/s J.D. Sales Corp. having its registered office at 113, Dilkhush Building, Chowk Tilak Bazar, Delhi-110006. The plaintiff is engaged in the business of textile chemicals and dyes since the year 1943 having its customers/clients/vendors/suppliers across the country. The plaintiff's firm product range includes VAT Dyestuffs, Reactive and Disperse Dyes, Sulphur and Solvent Soluble Dyes, OBA's, Direct and Metal Complex Acid Dyes, Vat Pasters, Napthols and Pigment Emulsion etc.
4. It has been further averred in the plaint that the defendant No.1 is a Limited Company duly registered and incorporated under the Companies Act having its registered CS (COMM) No.1390/2022 Digitally signed Pg. 2 / 51 Devendra by Devendra Kumar Sharma Kumar Date:
Sharma 2026.04.21 16:03:17 +0530 office at SCO No.49-50, Sector-8C, Chandigarh-160009 and the Defendant No.2 is Managing Director/AR of the defendant no.1 company and is in-charge of and is responsible for the conduct of the business and managing day-to-day affairs of the defendant no.1. The defendants are in the business of manufacturing of yarn, dyed yarn and garments etc. and the plaintiff and the defendants are in business relationship since the last more than 15 years.
5. It has been further averred in the plaint that the defendants used to place order for purchase of dyes material through email/purchase orders at the registered office of the plaintiff i.e. 113, Dilkhush Building, Chowk Tilak Bazar, Delhi-110006 and the plaintiff used to supply the same from its said office to the defendants agent i.e. The Bharat Motor Transport Co. Pvt. Ltd. who used to book the same and transport the same at the defendant's place after issuing the requisite Lorry Receipt (LR) to the plaintiff. The details of the invoices, purchase order as well as lorry receipt are given in para 10 of the plaint.
6. It has been further averred that as per the books of account being maintained by the plaintiff in the normal and ordinary course of its business, a sum of Rs.15,29,050/- remained due and outstanding against the defendant. It is further averred that the defendant no.2 had also taken his personal obligation and responsibility to make payment due and payable by the defendant no.1 to the plaintiff. The relevant terms and conditions as mentioned in the invoice issued by the plaintiff have been referred to in para 14 and 15 of the plaint and it has been stated Digitally signed CS (COMM) No.1390/2022 Pg. 3 / 51 Devendra by Devendra Kumar Sharma Kumar Date:
Sharma 2026.04.21 16:03:34 +0530 that the plaintiff clearly called upon their customers/defendants to accept the goods with full responsibility and the plaintiff will not be held responsible for the quality of the goods supplied in any manner whatsoever. It has been further averred that as per the contract/agreement between the parties, it was agreed that interest will be charged @ 22.5% per annum on overdue account if bill is not paid within due date and that any dispute arose between the parties shall be subject to Delhi Jurisdiction.
7. It has been further averred that the plaintiff had been corresponding with the defendants from time to time as regards to release of the balance payment and also for issuance of C- Forms qua the goods sold by the plaintiff to the defendants. The plaintiff had sent emails dated 23.02.2017, 24.02.2017, 01.03.2017, 06.03.2017, 08.05.2017, 11.05.2017, 16.05.2017, 21.03.2018, 22.03.2018, 27.03.2018 and 12.04.2018 and the defendants, vide its email dated 04.02.2017 and 20.03.2018, acknowledged its liability to pay and sought time to furnish the C-Forms. Thereafter, the plaintiff on the same day provided its address for sending the C-Forms.
8. It has been further averred in the plaint that the defendants had issued few C-Forms thereby acknowledging the bills pending for clearance and their legal liability due towards the plaintiff which they failed to discharge intentionally and deliberately. The details of the C-Forms received by the plaintiff are given in para 22 of the plaint.
9. It has been further averred that despite repeated requests/reminders, the defendants failed to clear the outstanding CS (COMM) No.1390/2022 Digitally signed Pg. 4 / 51 Devendra by Devendra Kumar Sharma Kumar Date:
Sharma 2026.04.21 16:03:39 +0530 amount. Thus, left with no other option, plaintiff had sent a legal notice dated 28.09.2020 to the defendants calling upon them to make the payment of Rs.20,42,289/- which was due till September 2020 alongwith interest. It has been further averred that though in terms of agreement/invoices, the interest was agreed @ 22.5% p.a., however, the plaintiff is claiming the interest @ 12% p.a. from the defendants w.e.f. December 2016 till date of filing of suit which comes to Rs.10,09,173/-. It has been further averred that the legal notice was served upon both the defendants and the defendants had sent a reply dated 17.11.2020 thereby acknowledging the business done with the plaintiff as regards the invoice payments as stipulated in the plaint in dispute, however, denied their liability to pay on false and frivolous grounds and also tried to set up a case that a sub-
standard goods were supplied. Despite receipt of said reply, the plaintiff had been regularly following up with the defendants and the defendant no.2 assured the plaintiff to discharge their legal liability by stating that they were facing some financial crisis and required some more time to resolve all the issues with the plaintiff.
10. It has been further averred that the plaintiff had approached the office of Central District Legal Services Authority at Tis Hazari Courts for initiating pre-institution mediation proceedings. The defendants did not participate in the mediation proceeding despite service of notices and thus, a non- starter report dated 23.10.2021 was issued. Thus aggrieved by the act of the defendants, the plaintiff has filed the instant suit praying for a decree in sum of Rs.25,38,223/- (Rs.15,29,050/-
Digitally signedCS (COMM) No.1390/2022 Devendra by Devendra Kumar Sharma Pg. 5 / 51 Kumar Date:
Sharma 2026.04.21 16:03:44 +0530 towards Principal amount and Rs.10,09,173/- towards interest @ 12% p.a.) alongwith pendente lite and future interest @12% p.a. from the date of filing of this suit till its realization.
11. During the pendency of the suit, the plaintiff has expired on 14.01.2023 and vide order dated 19.04.2023, the application filed on behalf of plaintiff U/o 22 Rule 3 r/w Section 151 CPC was allowed and the LRs of the plaintiff were permitted to be substituted in place of deceased plaintiff.
12. Pursuant to issuance of summons of suit, defendants had filed their written statement.
13. Subsequently, an application U/o VI Rule 17 r/w Section 151 of CPC for amendment of plaint was filed by plaintiff to incorporate averments with respect to documents which plaintiff was permitted to place on record pursuant to application U/o XI Rule 1(4) of CPC filed by the plaintiff. The said documents include audited balance sheets of defendant no.1 for the Financial Years 2016-17 to 2020-21 taken from the Ministry of Corporate Affairs (MCA) portal to prove that plaintiff's suit is well within limitation and that defendant no.1 has acknowledged its liability qua plaintiff in the said balance sheets. The said application was allowed vide order dated 25.02.2025 and plaintiff was permitted to amend the plaint.
14. In the amended plaint, besides the facts mentioned in original plaint, as detailed in foregoing paras, plaintiff has averred that the copies of the Audited Balance Sheets of the defendant no.1 from Financial Years 2016-17 to 2020-21 as taken from the Ministry of Corporate Affairs portal has also been filed CS (COMM) No.1390/2022 Digitally signed Pg. 6 / 51 Devendra by Devendra Kumar Sharma Kumar Date:
Sharma 2026.04.21 16:03:50 +0530 wherein the total current liabilities of the defendant no.1 towards its creditors as on 31.03.2017 was Rs.374.32 crores, as on 31.03.2018 was Rs.411.01 crores, as on 31.03.2019 was Rs.397.66 crores, as on 31.03.2020 was Rs.376.02 crores and as on 31.03.2021 was Rs.374.26 crores. Further, the amount payable by the defendants no.1 to the plaintiff firm was also reflected in the said balance sheets of the defendants. Hence, there is a clear-cut admission by the defendants about the said due payment to be made to the plaintiff firm and this itself is an acknowledgment of the debt which is also evident from C-Forms.
It is averred that the belated issuance of the C-Forms by the defendants is also a reflection and admission about the receipt of the goods from the plaintiff and about the due payment and also an acknowledgment of the fact that defendant had taken tax benefit by delayed issuance of C-Forms. It is thus prayed that the suit of the plaintiff be decreed as prayed for.
15. It is pertinent to mention here that the defendant no.2 had also filed an application U/o I Rule 10 r/w Section 151 of CPC seeking his deletion from the array of parties. Vide order dated 25.02.2025, the said application was allowed and the name of defendant no.2 was permitted to be deleted from the array of parties and the defendant no.1 was given liberty to file written statement to the amended plaint.
16. Thereafter, the defendant no.1 had filed the written statement to the amended plaint, through Sh. Sanjiv Sharma, Manager-Legal of the Defendant No.1 Company, who has been duly authorized to sign, verify the written statement and to proceed with the matter on behalf of defendant by virtue of Digitally signed CS (COMM) No.1390/2022 by Devendra Pg. 7 / 51 Devendra Kumar Sharma Kumar Date:
Sharma 2026.04.21 16:03:56 +0530 Board Resolution.
17. By way of preliminary objection, it has been stated that the Defendant No.2 is the Managing Director of the Defendant No.1 Company and he has never carried out any transactions with the plaintiff in his personal capacity and all the transactions alleged by the plaintiff were carried out between the plaintiff and the defendant no.1; that the defendant no.2 cannot be made personally liable for the alleged contractual obligations of defendant no.1 and hence, the defendant no.2 is neither a proper party nor a necessary party in the present suit. It has been further stated that the defendant no.2 has also filed an application U/o I Rule 10 r/w Section 151 CPC seeking deletion of his name from the array of the parties.
18. Another objection regarding suit of plaintiff being barred by limitation has also been taken. It has been stated that the last invoice allegedly issued by the plaintiff was on 30.11.2016 and the suit was filed after the prescribed period of limitation was over i.e. after 01.12.2019. Hence, the suit is liable to be rejected being barred by law of limitation. However, it is stated that the said invoices were never acknowledged by the defendants.
19. It has been submitted that the defendant no.1 had suffered huge losses due to bad and inferior quality of products supplied by the plaintiff and due to this reason the defendant no.1 had terminated the relationship with the plaintiff as is evident from the fact that the last invoice was issued by the plaintiff on 30.11.2016 after which the defendant no.1 never placed any order Digitally signed CS (COMM) No.1390/2022 Devendra by Devendra Pg. 8 / 51 Kumar Sharma Kumar Date:
Sharma 2026.04.21 16:04:01 +0530 with the plaintiff. It is further submitted that when the plaintiff's officer approached the defendant no.1 for the alleged remaining payment, the defendant no.1 apprised them of the fact that they had suffered huge losses because of the inferior and sub-standard quality of products supplied by the plaintiff. It is submitted that the plaintiff had admitted the said wrong doing and thereafter an oral understanding was reached between the parties.
20. It has been further submitted that it was amicably agreed between the defendant no.1 and the plaintiff that to put a quietus to all disputes, the defendant no.1 shall pay a full and final payment of Rs.3,02,290/- to the plaintiff which was admittedly made on 24.11.2016. The said payment was amicably agreed to be the full and final settlement against any dues of the plaintiff and it was also agreed that no action will be brought by either of the parties in the Court of law. It has been further submitted that as per the oral settlement, the plaintiff was to provide certain products to the defendant no.1 which were provided by the plaintiff in three installments subsequent to the full and final payment made by defendant no.1; that after the payment of Rs.3,02,290/-, the defendant no.1 was not liable to pay any amount to the plaintiff. It has been further submitted that despite there being an oral settlement between the parties, the plaintiff has instituted the present suit to harass the defendants and to extort money from the defendants.
21. It is further submitted that plaintiff has placed reliance on certain financial documents purportedly pertaining to the defendant in an attempt to demonstrate an alleged continuing liability of the defendant. However, such reliance is wholly CS (COMM) No.1390/2022 Digitally signed Pg. 9 / 51 Devendra by Devendra Kumar Sharma Kumar Date:
Sharma 2026.04.21 16:04:06 +0530 misplaced and untenable both in law and on facts. It has been further stated that the balance sheets relied upon by the plaintiff do not, in any manner, establish that the defendant have any subsisting liability or outstanding dues payable to the plaintiff. Further, it has been specifically denied that the said financial documents contain any admission or acknowledgment by the defendant of any debt in favour of the plaintiff; that there is neither any reference to the plaintiff in the said documents nor is there any reference to the alleged debt of the plaintiff and the burden lies entirely upon the plaintiff to establish how the said documents, even if assumed to be authentic and admissible, evidence any liability owed by the defendant to the plaintiff . It has been further submitted that the plaintiff has merely extracted a generalized reference to the overall debt of the defendant company from its balance sheets and is attempting to assert that its alleged debt forms a part thereof. Such a claim, devoid of any specific acknowledgment or supporting documentation, is not only baseless but also legally unsustainable. The documents filed by the plaintiff do not disclose any conclusive or corroborative evidence indicating that the defendant owe any debt or liability to the plaintiff. Hence, plaintiff's reliance on defendant's financial documents is wholly misplaced, legally untenable and deserve to be rejected in limine.
22. It has been denied that there was any acknowledgment of the alleged debt of plaintiff by the defendants in any manner and thus, no cause of action arose in favour of the plaintiff against the defendants. It has been further submitted that nowhere in the alleged emails dated 04.02.2017 CS (COMM) No.1390/2022 Digitally signed Pg. 10 / 51 Devendra by Devendra Kumar Sharma Kumar Date:
Sharma 2026.04.21 16:04:11 +0530 and 20.03.2018, the defendants have acknowledged their liability towards the plaintiff and the defendants had merely sought the address to which the C-Forms related to previous transactions were to be delivered. It has been further submitted that mere delivery of C-Forms in no way can be construed as acknowledgment of the liability to pay to the plaintiff and that it is well-settled principle of law that the issuance of C-Form does not extend the limitation for filing the suit.
23. The maintainability of the suit has also been challenged on the ground that this Court has no territorial jurisdiction to try the present suit. It has been stated that the defendant no.1 used to place the order in Chandigarh only and the plaintiff also used to supply the goods outside the territorial jurisdiction of this Court and the payments were also made by the defendants outside the jurisdiction of this Court. Thus, this Court has no territorial jurisdiction to adjudicate upon the present suit as neither the defendants reside nor works for gain nor the cause of action has arisen within the territorial jurisdiction of this Court.
24. On merits, it is denied that defendant no.2 was personally and solely in-charge of and was responsible for day-
to-day affairs of the defendant no.1. It is stated that the business relationship between the plaintiff and defendants no.1 lasted for many years due to the reason that defendant no.1 was making the timely payments, however, the quality of goods supplied by plaintiff kept on decreasing which ultimately forced the defendant no.1 to terminate the business relations after settling all the disputes. It has been reiterated that that parties have not Digitally signed by CS (COMM) No.1390/2022 Devendra Devendra Pg. 11 / 51 Kumar Sharma Kumar Date:
Sharma 2026.04.21
16:04:16
+0530
done any transaction after 2016 and the last payment was made by defendant no.1 on 24.11.2016 which was the full and final settlement between the parties. It has been denied that the defendants had placed the purchase orders at the registered office of the plaintiff and that the plaintiff used to supply the goods from its registered office to the defendant's agent. It has also been denied that M/s Bharat Motor Transport Co. Pvt. Ltd. used to book and transport the goods on behalf of the defendant no.1. It has been denied that the invoices issued by the plaintiff were duly accepted by the defendant. It has been denied that the defendants had agreed that interest @ 22.5% per annum is to be levied on the overdue amount if the payment was not made. It has been further stated that no such terms and conditions were agreed between the parties and it has been reiterated that issuance of C-Forms does not imply acceptance of quality of goods or acknowledgment of debt in any manner. Rest of the averments made in the plaint have also been controverted on merits and it is prayed that suit of plaintiff be dismissed.
25. The plaintiff had filed the replication. However, since the replication had not been filed within 45 days from the date of supply of copy of the W.S., the same was directed to be stuck off the record vide order dated 16.07.2025.
26. The plaintiff as well as defendant have filed their respective affidavits of admission/denial of the documents and the admission/denial of documents was also carried out.
(B) Issues :-
27. From the pleadings of the parties, following issues Digitally signed CS (COMM) No.1390/2022 Pg. 12 / 51 Devendra by Devendra Kumar Sharma Kumar Date:
Sharma 2026.04.21 16:04:21 +0530 were framed :-
1) Whether the plaintiff is entitled to a decree of recovery for a sum of Rs.25,38,223/- against the defendants (jointly and/or severally) as prayed for? (OPP)
2) Whether the plaintiff is entitled for any interest, if so, at what rate and for which period? (OPP)
3) Whether the suit of the plaintiff is not maintainable against defendant no.2 as the defendant no.2 has never carried out any transaction with the plaintiff in his personal capacity, as claimed? (OPD)
4) Whether the suit of the plaintiff is barred by limitation as the period of limitation was already expired on 01.12.2019, as claimed? (OPD)
5) Whether the goods supplied by the plaintiff was of sub-standard quality, if so, its effect upon the claim of the plaintiff? (OPD)
6) Whether there was an oral settlement between the plaintiff and defendant no.1 for a full and final payment of Rs.3,02,290/- and whether the said amount was paid on 24.11.2016 towards all the liabilities of the defendants? (OPD)
7) Whether there was no acknowledgment of any kind of outstanding by the defendants in any manner after 30.11.2016? (OPD)
8) Whether this Court has no territorial jurisdiction to adjudicate upon the present suit? (OPD)
9) Relief.Digitally signed
CS (COMM) No.1390/2022 Pg. 13 / 51
Devendra by Devendra
Kumar Sharma
Kumar Date:
Sharma 2026.04.21
16:04:27
+0530
28. It is pertinent to mention here that vide order dated 18.10.2025, the application on behalf of the defendant U/o XIV Rule 5(1) r/w Section 151 of CPC was allowed and issue no.3 was ordered to be deleted/struck off.
(C) Evidence :-
29. In order to prove its case, Sh. Karan Khurana, Son/LR No.(iv) of deceased plaintiff has examined himself as PW-1. He reiterated the averments made in plaint in his affidavit Ex.PW-1/A and relied upon following documents:-
S.No. Details of documents Exhibit No.
1. The copies of the said bilty/LR & all invoices Ex.P1 (Colly) are no. 130004 dated 08.02.2016, no. 13005 dated 08.02.2016, 13301 dated 18.07.2016, no. 13323 dated 28.07.2016, no. 13511 dated 29.09.2016, 13197 dated 31.05.2016, no. 13335 dated 03.08.2016, no. 13342 dated 04.08.2016, no. 13363 dated 06.08.2016, no. 13433 dated 30.08.2016, no. 13435 dated 30.08.2016, 13487 dated 16.09.2016, no. 13508 dated 27.09.2016, no. 13568 dated 26.10.2016, no. 13571 dated 27.10.2016, no. 13578 dated 05.11.2016, no. 13606 dated 16.11.2016, no. 13607 dated 16.11.2016, no. 13608 dated 16.11.2016, no. 13631 dated 22.11.2016, no. 13642 dated 24.11.2016, no. 13658 dated 30.11.2016, no. 13600 dated 12.11.2016, no. 13619 dated 18.11.2016 and invoice no. 13644 dated 24.11.2016
2. E-mail dated 02.12.2016, 04.02.2017 and Ex.P2 (Colly) 20.03.2018
3. Copy of C-Forms having serial no. Ex.P3 (Colly) PB-AB/C1023666 dated 23.04.2018, PB-
AB/C1023667 dated 23.04.2018, PB170577265 dated 28.12.2017, PB170577333 dated 28.12.2017, PB170577458 dated 28.12.2017 and PB-
AB/C-1023668 dated 23.04.2018
Digitally signed
CS (COMM) No.1390/2022 Devendra by Devendra
Kumar Sharma Pg. 14 / 51
Kumar Date:
Sharma 2026.04.21
16:04:33
+0530
4. Legal Notice dated 28.09.2020 Ex.P4
5. Copy of reply dated 17.11.2020 Ex.P5
6. Copies of ledger account and statement Ex.PW-1/1
accounts (Colly)
7. Copy of postal receipt Ex.PW-1/2
8. Balance sheet of financial year 2016 to 2021 Ex.PW-1/3 taken from MCA portal
9. Affidavit under Section 65B of Evidence Act, Ex.PW-1/4 dated 03.11.2022
10. Non-starter Report dated 23.10.2021 Ex.PW-1/5
30. The PW-1 was cross examined at length in respect to his association/involvement with his father's firm J.D. Sales Corporation; genuineness of ledger account/statement of accounts Ex.PW1/1 (Colly); personal knowledge of business transactions between the plaintiff and the defendant company; dispute with respect to the quality of the products; balance sheet of the defendant company from financial years 2016-2021; admission of outstanding liability of the defendant; emails lying on record; terms and conditions mentioned in the invoices; alleged oral settlement/agreement between the parties in the year 2016; meeting with employees/director of the defendant company.
31. No other witness was examined on behalf of plaintiff. Therefore, PE was closed.
32. In order to prove his defence, the defendant has examined Sh. Sanjeev Sharma, its AR, as DW1. He reiterated the facts averred in the written statement in his affidavit Ex.DW-1/A and relied upon the original authorization letter as Ex.DW-1/1.
Digitally
signed by
CS (COMM) No.1390/2022 Devendra Devendra Pg. 15 / 51
Kumar Sharma
Kumar Date:
Sharma 2026.04.21
16:04:39
+0530
33. The DW-1 was cross examined at length inter-alia in respect to the genuineness of Board Resolution Ex.DW1/1/ his authorization; terms and conditions mentioned in the invoices; maintaining of business correspondence register, books of accounts, balance sheet, filing ITRs, acknowledgment of the liability by the defendant through emails; one time settlement or full and final settlement between the plaintiff and defendant; C- forms; profit/loss account; attestation of the affidavit Ex.DW1/A; placing on record documents/communication pertaining to substandard quality of product supplied by the plaintiff/loss suffered by defendant; liability of the defendant towards the plaintiff.
34. No other witness was examined on behalf of defendant . Therefore, DE was closed.
35. Arguments were addressed by Sh.P.K. Rawal and Sh.Vasu Purohit, counsels for the plaintiff and Sh. Aditya P. Arora and Sh. Yash Aggarwal, counsels for defendant No.1. Written submissions have also been filed on behalf of parties.
36. Counsel for plaintiff has submitted on the lines of the pleadings that the present suit is based on the purchase orders sent by the defendant through emails and invoices which are already admitted by the defendant in the admission denial as well as in the cross examination. It has been further submitted that the plaintiff had supplied goods/chemical dyes to defendant and raised invoices; that the payments were to be made as per the terms and conditions mentioned in the purchase order and invoices, however, the defendant failed to make payment of the Digitally signed CS (COMM) No.1390/2022 Devendra by Devendra Pg. 16 / 51 Kumar Sharma Kumar Date:
Sharma 2026.04.21 16:04:46 +0530 principal amount of Rs.15,29,050/-. It has been further submitted that the limitation period shall run from the date credit expires as per Article 15 of the Limitation Act and the purchase orders dated 17.12.2015 and 19.11.2015 itself mentions in column 6 that payment terms are within 75 to 90 days and Purchase order dated 24.11.2016 also mentions that payment terms are within 45 to 60 days, however, the plaintiff on various occasions had written to the defendant company and as well as went personally and met for the repayment of due amount but defendant only gave false assurances and finally issued C-form and acknowledged the liability. It has been further submitted that copy of Emails dated 02.12.2016, 04.12.2017 and 20.03.2018 have been admitted by the defendant and vide copy of the email dated 02.12.2016, the defendant had asked for the account statement pertains to plaintiff which itself demolishes the false case and moon shine defence set up by the defendant that full and final settlement took place in November, 2016. It has been further submitted that it is settled law that plea one time payment/settlement is itself an acknowledgment of liability and once the C-forms have been admitted by the defendants along with the admitted invoices and balance sheets it is clear case of acknowledgment of liability. It has been further submitted that as per para 12 of the plaint it has been categorically mentioned that account whereby the transactions were made were open running and since as the goods were ordered by the defendant and never denied the delivery of goods there was always element of mutuality in the transaction. Hence, the present case comes under Article 85 of Indian Limitations Act 1963 which provides that since debt shown earlier was shown as merged in subsequent transaction Digitally signed CS (COMM) No.1390/2022 by Devendra Pg. 17 / 51 Devendra Kumar Sharma Kumar Date:
2026.04.21 Sharma 16:05:08 +0530 and was uninterrupted, continuous in nature then the limitation period shall start at the end of financial year. Hence, in that case also the suit filed by the plaintiff is well within limitation as Hon'ble Supreme Court had also extended the period of limitation suo moto in the year 2020. It has been further submitted that there is no denial of the open and running account on the part of defendant as also no cross examination or suggestions have been put to that effect.
37. It has been further submitted that belated C-Form were issued in the year 2017 and 2018 respectively and the defendant has taken taxation benefits and the defendant cannot take dual stand in respect of taxation period vis-à-vis to plaintiff. It has been further submitted that Delhi High Court in case titled as Chemical Fertilizer Ltd. has held that defendant cannot take the contradictory stand against the succession authority vis-à-vis the plaintiff and it was also held that C-Form is implied admission of the liability and decreed the suit under order 12 rule 6 of C.P.C. It was further held by the Delhi High Court that C- Form alongwith other circumstances can be considered while deciding that there is an acknowledgment of the liability or implied acknowledge of the liability. It has been further submitted that the defendant's witness admission that C-Form were prepared after verifying the same through books of account itself is sufficient to acknowledge the liability. It has been further submitted that once it is stand of the defendant on oath that C- Form prepared after verifying of the books of account of the defendant company, non-filing of the relevant books of account is an acknowledgment of the liability. It has been further submitted Digitally signed CS (COMM) No.1390/2022 Devendra by Devendra Pg. 18 / 51 Kumar Sharma Kumar Date:
Sharma 2026.04.21 16:05:13 +0530 that all the documents which have been filed alongwith the plaint are admitted by the defendant and in defence of those documents not a single document has been filed by the defendant which creates suspicious in the mind of the plaintiff and therefore, an adverse inference may be drawn against the defendant.
38. It has been further submitted that it is one of the ground of the defendant that one time settlement took place in the year 2016, however, during the cross examination it was stated by the defendant on oath that there is no such document of one time settlement. It has been further submitted that one time settlement is an acknowledgment of liability. It has been further submitted that it is the case of the plaintiff as mentioned in paragraph 22-A and 22-B of amended plaint that the name of the plaintiff has been shown in the list of sundry creditors and amount so due is also mentioned and included in the total debt shown in the respective years of balance sheet placed on record from the year 2016 till 2021. It has been further submitted that in response to the settled plea in the plaint the defendant fails to specifically denied the said claim of the plaintiff. Hence, the evasive denial is no denial. Secondly there are no specific question put to the plaintiff witness and on the other hand when the defendant witness was asked that defendant company manages books of account as well as balance sheet, the answer of the witness was in affirmative, however, when the defendant witness was called upon to produce or asked whether such document was filed before this Court, the defendant witness replied in negative which further shows the malafide and deliberate attempt on the part of the defendant company to run CS (COMM) No.1390/2022 Digitally signed Pg. 19 / 51 Devendra by Devendra Kumar Sharma Kumar Date:
2026.04.21 Sharma 16:05:20 +0530 away from the liability. It has been further submitted that there is no question or suggestion put with regard to open running account alongwith C-Form alongwith invoices and ledger related to the plaintiff and no suggestion has been given by the defendant and defence were put to the plaintiff witness. It has been further submitted that it was held by the Hon'ble Delhi High Court in case titled Bal Kishan Vs. State in 1976, in case titled Qausir Jahan Begum Vs. Ramzan Karim and Rajinder Pal Vs. Darshana Devi where the Hon'ble Delhi High Court and Hon'ble Supreme Court of India held that once the witness in the witness box was given no suggestion as a defence or no cross examination is put to the witness leaving the substance unexplained is an admission on the part of the defendant and the cross examination in chief deemed to be admitted by the defendant. It has been further held by the Hon'ble Delhi High Court in case titled as A.R.C. Arora Project Pvt. Ltd Vs. Karan Pal Singh as well in IL & FS Financial Service Ltd. Vs. Adhunik Megalaya Steel Pvt. Ltd. that there is no requirement on the part of debtor to address creditor by name to show the amount due and it is not required to mention by name or in words specifically or acknowledgment of the liability and the acknowledgment of liability can be inferred after considering the surrounding circumstances. In the present case C-Form have corroborated with the invoice as invoice alongwith amount due is mentioned in the C-Form signed by the defendant and admitted by the defendant keeping away the vital document and scrutiny shows the malafide on the part of the defendant hence the defence of the defendant is moon shine defence and the suit of the plaintiff is liable to be decreed. It has been further submitted that sole ground taken by the defendant is that the suit is barred Digitally signed CS (COMM) No.1390/2022 Devendra by Devendra Kumar Sharma Pg. 20 / 51 Kumar Date:
Sharma 2026.04.21 16:05:26 +0530 by limitation, however, none of the judgment relied upon by the defendant applies to the facts of the present case. It has been further submitted that it is settled law that balance sheet forms an acknowledgment of liability and in the balance sheets of the defendant company the debt is acknowledged and included in the list of sundry creditors. It has been further submitted that neither at the time of filing the written statement nor at the time of cross examination any evidence is led by the defendant whether the amount is included or not. It has been further submitted that the documents have only been denied being illegible and not specifically nor any counter documents have been filed by the defendant. It has been further submitted that it is settled law that evasive denial is no denial in the eyes of law. It has been further submitted that even the defendant has admitted that "it is correct that Ex. DW1/1 which is filed today is not the copy of the board resolution filed by the defendant company alongwith WS as mark-A." and further stated that "it is correct that defendant company has not passed any resolution before filing the written statement dated 17.02.2022 and therefore, no resolution was annexed with the Written Statement". It has been further submitted that since no counter document has been filed by the defendant and even board resolution was not proved as per law, an adverse inference is liable to be drawn against the defendant. Lastly, it has been submitted that terms and conditions of the invoices have been admitted by defendant in the cross- examination and hence, plaintiff is entitled to a decree as prayed with interest.
In support of the contentions, counsel for the plaintiff has relied upon following judgments:-
Digitally signed
CS (COMM) No.1390/2022 Devendra by Devendra Pg. 21 / 51
Kumar Sharma
Kumar Date:
Sharma 2026.04.21
16:05:31 +0530
a) Chemicals Systems Technologies (India) Pvt. Ltd. vs.
Simbhaoli Sugar Mills Ltd., CS (OS) 1480/2009 & CS No.27/2010 decided on 01.02.2023.
b) Rattan India Power Ltd. vs. Bharat Heavy Electricals Ltd.
OMP (ENF) (COMM) 149/2017 DOD 06.03.2025.
c) Shyam Dri Power Ltd. vs. Bhav Shakti Steel Mines Co.PET 475/2009
d) Vidyasagar Prasad vs. UCO Bank & Anr. Civil Appeal No.1031/2022 DOD: 22.10.2024
e) ARC Arora Projects Pvt. Ltd. vs. Karan Pal Singh, FAO (OS) 87/2023, DOD: 04.12.2023
f) IL&FS Financial Services Ltd. vs. Adhunik Meghalaya Steels Pvt. Ltd. C.A. No. 5787 of 2025
g) R.S. Shekawat Vs. Delhi Race Club (1940) Ltd. RFA No.592/2017 DOD 11.10.2017
h) Suo Moto Petition No.3/2020
i) Gopal Krishnaji Ketkar vs. Mohommad Haji Latif & Ors.
1968 3 SCR 862
j) Hira Lal & Ors. vs. Badkulal & Ors 1953 1 SCC 400
k) Bal Kishan vs. State & Anr. 1976 RLR 112 N
l) Rajinder Pershad vs. Darshana Devi 2001 5 SCALE 203
m) Qaiser Jahan Begum vs. Ramzan Karim 1998 46 DRJ 7
n) Bharath Skins Corporation vs. Taneja Skins Company Pvt.
Ltd. RFA (OS) 13/2002 DOD 21.12.2011
39. Per contra, counsel for defendant has submitted on the lines of the pleadings that suit is barred by limitation as the last invoice was raised by the plaintiff on 30.11.2016 and last payment was made by the defendant company on 24.11.2016; that the parties amicably settled their disputes in November 2016 and the defendant had paid a sum of Rs.3,02,290/- on 24.11.2016 which was accepted as full and final discharge of all dues. It has Digitally signed CS (COMM) No.1390/2022 Devendra by Devendra Kumar Sharma Pg. 22 / 51 Kumar Date:
Sharma 2026.04.21 16:05:37 +0530 been further submitted that once such full and final settlement was accepted, no further liability survived and the oral settlement closed the accounts and therefore, no fresh cause of action could accrue to the plaintiff after November 2016. It has been further submitted that the reliance of plaintiff on issuance of C-Forms and balance sheets of the defendant company (2016-2021) is wholly misconceived as the DW1 during his cross-examination dated 19.08.2025 has categorically denied acknowledgment of liability through various communications through emails whereas the PW1, when confronted with the balance sheets during his cross-examination dated 12.08.2025, has admitted that in the documents filed on record there is no such list of sundry creditors showing the plaintiff's name. It has been further submitted that that C-Forms are issued only for compliance under the Central Sales Tax Act, 1956 and cannot be construed as acknowledgment of liability under Section 18 of the Limitation Act. It has been further submitted that the plaintiff had placed on record copies of its audited balance sheets for the year 2016-2021 only after the defendant had raised the issue of limitation. It has been further submitted that the balance sheet can extend limitation only where it contains a specific and unequivocal acknowledgment of liability which is clearly absent in the present case. It has been further submitted that the plaintiff's sister concern, M/s L.D. Rangwala, had filed a suit bearing CS (COMM) 686/2022 against the defendants on similar facts and the same was dismissed on 30.01.2025 on limitation alone and it was held that the handing over of the C-Forms and emails would not extend the limitation period, since the issuance of C-Forms only acknowledges a past transaction and not the present liabilities to Digitally signed CS (COMM) No.1390/2022 Devendra by Devendra Pg. 23 / 51 Kumar Sharma Kumar Date:
Sharma 2026.04.21 16:05:43 +0530 pay. It has been further submitted that the defendant's dealings were exclusively with late Narender Khurana and not with PW1; that entire testimony of PW1 is hearsay and that he has no personal knowledge of the business transaction between the plaintiff firm and the defendant company. It has been further submitted that the defendant no.1 had verbally informed the plaintiff regarding the substandard and inferior quality of goods supplied, which caused the defendant substantial losses and ultimately led to termination of the business relationship. Lastly, it has been submitted that no part of the cause of the action has arisen within the territorial jurisdiction of this Court as the purchase orders were placed at Chandigarh, supplies were made outside Delhi and payments were effected outside Delhi.
40. It has been further submitted that the Plaintiff's reliance on the e-mail dated 02.12.2016 is misconceived and misplaced; that the said communication pertains exclusively to invoices for the financial year 2013-2014 and bears no nexus whatsoever with the invoices forming the subject matter of the present suit. It has been further submitted the said e-mail, therefore, cannot constitute any acknowledgment of liability in respect of the present claim and is legally irrelevant. It has been further submitted the Plaintiff's attempt to invoke Article 1 of the Limitation Act, 1963, is wholly misconceived. It has been further submitted that the present transactions do not constitute a "mutual, open and current account" with reciprocal demands, but are in the nature of a one-sided commercial arrangement, where goods were supplied by the Plaintiff, and payments were made by the Defendants. There were no cross-liabilities or mutual Digitally signed CS (COMM) No.1390/2022 Devendra by Devendra Pg. 24 / 51 Kumar Sharma Kumar Date:
Sharma 2026.04.21 16:05:48 +0530 dealings so as to attract Article 1. It has been further submitted that the benefit of computing limitation from the close of the financial year, as contemplated under Article 1 is available only in cases of such mutual and reciprocal accounts and that in the absence of the essential ingredients of mutuality, the Plaintiff cannot seek to avail this extender period of limitation. Consequently, limitation in the present case must necessarily be computed from the date of the issuance of the last invoice, and not from the end of the financial year. On such computation, the claims sought to be raised are clearly barred by limitation. It has been further submitted that the Plaintiff has failed to place on record any document whatsoever which constitutes a valid acknowledgment of liability in writing within the meaning of Section 18 of the Limitation Act, 1963. It has been further submitted that there is no communication, correspondence, account confirmation, or any signed document emanating from the Defendant acknowledging the alleged debt and the entire case of the Plaintiff is sought to be built on vague and generic entries, which neither identify the Plaintiff nor reflect any conscious acknowledgment of liability. It has been further submitted that in the absence of a clear, specific, and written acknowledgment attributable to the Plaintiff, the essential precondition for extension of limitation remains unfulfilled. Consequently, the present suit, being ex facie barred by limitation, is liable to be dismissed on this ground alone.
41. It has been further submitted that the Plaintiff's contention that issuance of C-Forms constitutes an acknowledgment of debt is wholly untenable in law. It is a settled Digitally signed CS (COMM) No.1390/2022 Devendra by Devendra Pg. 25 / 51 Kumar Sharma Kumar Date:
Sharma 2026.04.21 16:05:53 +0530 position that C-Forms, being statutory documents issued for the limited purpose of availing concessional tax benefits, do not by themselves amount to an acknowledgment of liability within the meaning of Section 18 of the Limitation Act, 1963. Thus, it is prayed that the suit filed by plaintiff is liable to be dismissed.
In support of the contentions, counsel for the defendant has relied upon following judgments:-
a) Taipack Ltd. vs. Ram Kishore Nagar Mal, 2007 SCC OnLine Del 804
b) Alliance Paints and Varnish Works (P) Ltd. vs. Hari Kishan Gupta, 2010 SCC OnLine Del 571
c) Zion Steel vs. Subtleweight Electric (India) P. Ltd. (2014) 71 VST 312
d) Lamicoat Int. P. Ltd. vs. Galore Prints Industries Ltd. , 2012 SCC OnLine Del 4336
e) Rajiv Khanna vs. M/s Sunrise Freight Forwarders PVt. Ltd.
& Anr. 2016 SCC OnLine Del 3359
f) Dahiben vs. Arvindbhai Kalyanji Bhanushali (2020) 4 SCC (Civ) 128
g) T. Arivandandam v. T.V. Satyapal & Anr. 1978 SCR (1) 742 (E) Analysis of Evidence and Findings:-
42. I have heard the learned Counsels for the parties and have also perused the record as well as the written submissions and case laws filed on behalf of the parties. My issue-wise findings are as under:-
ISSUE No.4 :-
Whether the suit of the plaintiff is barred by limitation as the period of limitation was already expired on 01.12.2019, as claimed? (OPD) Digitally signed Devendra by Devendra Kumar Sharma CS (COMM) No.1390/2022 Kumar Pg. 26 / 51 Date:
Sharma 2026.04.21 16:05:58 +0530 AND ISSUE No.7:-
Whether there was no acknowledgment of any kind of outstanding by the defendants in any manner after 30.11.2016? (OPD)
43. Both these issues are being taken up together as they are inter connected.
The onus of proving these issues were upon defendant.
In the written statement, the defendant has raised an objection that the alleged books of accounts, as maintained by the plaintiff, reflects that the date of last invoice was 30.11.2016 and there have been no transactions i.e. delivery of goods or payment thereof since 30.11.2016. It has been further alleged that the plaintiff has wrongly and unjustly stated that Defendant had acknowledged the debt through e-mails dated 04.02.2017 and 20.03.2018 and it is submitted that the defendant no.1 had merely sought the address on which C-Forms were to be delivered to the plaintiff vide the said emails and the issuance of C-Forms does not extend the period of limitation for filing of suit and more so, since C-Forms are merely admission of transaction(s) that took place in past, but are not acknowledgment of any present liability to pay U/s 18 of the Limitation Act. It has been further averred that reliance on balance sheets for the Financial Years 2016-17 to 2020-21 has been misplaced as there is no specific page or document therein in which defendant expressly acknowledges alleged debt owned to the plaintiff. Further, the name of plaintiff does not figure anywhere and hence, the suit of plaintiff is Digitally signed by Devendra CS (COMM) No.1390/2022 Devendra Kumar Sharma Pg. 27 / 51 Kumar Date:
2026.04.21 Sharma 16:06:04 +0530 hopelessly barred by limitation. He has relied upon judgments in case of Taipack Limited & Ors. vs. Ram Kishore Nagal Mal, 2007 SCC OnLine Del 804 and Alliance Paints and Varnish Works Pvt. Ltd. vs. Hari Kishan Gupta (Deceased) Through LRs 2010 SCC OnLine Del 571 in support of his contentions.
44. The plaintiff, on the other hand, had filed audited balance sheets of defendant no.1 for the Financial Years 2016-17, 2017-18, 2018-19, 2019-20 and 2020-21 to contend that by virtue of incorporation of liability towards plaintiff in the list of creditors and debtors, in the said balance sheets, the defendant no.1 has acknowledged that it owes payment to plaintiff and the same would amount to an acknowledgment for the purposes of Section 19 of the Limitation Act. He has relied upon judgment passed by Hon'ble Delhi High Court in case of ARC Arora Projects Pvt. Ltd. vs. Karan Pal Singh, FAO (OS) 87/2023 dated 01.12.2023 wherein reliance upon list of creditors and debtors in the balance sheet of company was permitted as acknowledgment of liability by holding that debt shown in balance sheet of a company amounts to an acknowledgment for the purposes of Section 19 of the Limitation Act.
45. It is pertinent to mention here that alongwith the W.S., defendants had also filed an application U/o VII Rule 11 r/w Section 151 seeking rejection of the plaint on the ground that plaint is barred by limitation and concealment of material facts regarding the full and final settlement between the parties. Vide order dated 25.02.2025, it was held by the Ld. Predecessor Court that though C-Forms by themselves may not be sufficient for plaintiff to establish that the suit has been filed within period of CS (COMM) No.1390/2022 Digitally signed Pg. 28 / 51 Devendra by Devendra Kumar Sharma Kumar Date:
Sharma 2026.04.21 16:06:10 +0530 limitation but conjoint reading with record summoned to prove relevant balance sheets of defendant no.1 may lead to a different conclusion. Thus while disposing the application, the issue of limitation was left to be decided after final trial.
46. Thereafter, the witness PW1 on behalf of the plaintiff and DW1, on behalf of the defendant, were examined.
47. In the present case, at the time of admission/denial of the documents, existence of all the invoices raised on behalf of the plaintiff were admitted and the invoices were exhibited as Ex.P1 (Colly).
48. Admitted fact in the present case is that the alleged last supply of the goods to the defendant on behalf of the plaintiff has been made on 30.11.2016 and as per ledger account, Ex.PW1/1 (Colly), the last date of payment is on 24.11.2016. Thus, ordinarily the limitation period would have expired on 01.12.2019 is same is treated to be open and running account and if it is treated to be mutual account then as per Article I of Limitation Act, it would have expired on 31.03.2020.
49. Law regarding the date when the cause of action for instituting a suit arises, is well settled. It has been held by the Hon'ble Supreme Court in case titled as Gannon Dunkerley and Co. Ltd. v. Union of India (1969)3 SCC 607 as under:-
"...... there is no right to sue until there is an accrual of the right asserted in the suit, and its infringement, or at least a clear and unequivocal threat to infringe that right by the Defendant against whom the suit is instituted..."Digitally signed
CS (COMM) No.1390/2022 by Devendra Pg. 29 / 51 Devendra Kumar Sharma Kumar Date:
2026.04.21 Sharma 16:06:16 +0530
50. Further, in the case titled as Khatri Hotels vs. U.O.I. & Anr. (2011 (10) Scale 190), the Hon'ble Supreme Court while examining a situation where a right to sue accrues on multiple causes of action and to decide as to when will the period of limitation begin to run for instituting a suit has held as under:-
"....21. The Limitation Act, 1963 (for short "the 1963 Act") prescribes time limit for all conceivable suits, appeals, etc. Section 2(j) of that Act defines the expression "period of limitation"
to mean the period of limitation prescribed in the Schedule for suit, appeal or application. Section 13 lays down that every suit instituted, appeal preferred or application made after the prescribed period shall, subject to the provisions of Section 4 to 24, be dismissed even though limitation may not have been set up as defence. If a suit is not covered by any specific article, then it would fall within the residuary article. In other words, the residuary article is applicable to every kind of suit not otherwise provided for in the schedule."
51. In case titled as Rajendra Bajoria and others v. Hemant Kumar Jalan and others, AIR 2021 SUPREME COURT 4594, the Hon'ble Supreme Court has held that the duty is cast upon the Court to determine whether the Plaint discloses a cause of action or whether the suit is barred by any law.
52. In the present case, as per averments made in para 29 of the amended plaint, the cause of action has been shown to have arisen on the basis of invoices and orders placed which from the last invoice appears to be on 30.11.2016 and there are other averments regarding the cause of action which have arisen on the basis of C-form and emails etc. However, in the entire para, there is no mention of any acknowledgment of liability in the balancesheet of the defendant company giving rise to the Digitally signed CS (COMM) No.1390/2022 Devendra by Devendra Pg. 30 / 51 Kumar Sharma Kumar Date:
Sharma 2026.04.21 16:06:21 +0530 cause of action. The claim of the plaintiff that his case is covered under Article 1 of the Limitation Act is being taken up first.
53. In the entire pleading, there is no averment regarding the limitation and as to when the limitation to file the present suit has arisen. During the course of arguments, two fold arguments have been advanced, first that the present dealing with the parties is dealing in the form of open, running and mutual account and the second limb of the argument is that there was acknowledgment in the form of issuance of C-form alongwith the mention of name of plaintiff in the balance sheet being filed by the defendant company showing the name of the plaintiff.
54. In case titled as Dilboo Vs. Dhanraji, (2000) 7 SCC 702, it was observed by the Hon'ble Apex Court that where there is a dispute that the suit is filed beyond period of limitation, it is for the plaintiff to aver and to prove that the suit is within the period of limitation as prescribed. In the absence of any averment or proof to show that the suit is within time, it is the Plaintiff who would fail.
55. The first argument that the account between the parties was an open, mutual and running account though argued but there is no mention of the account being running, mutual and open account in the entire averment. However, now it is to be seen with reference to the Schedule attached to the Limitation Act, 1963 wherein under Part-I and II, as to how the limitation period in the present case would be governed.Digitally signed
CS (COMM) No.1390/2022 Devendra by Devendra Kumar Sharma Pg. 31 / 51 Kumar Date:
Sharma 2026.04.21 16:06:25 +0530
56. Part-I of The Act, 1963 relates to the suit pertaining to accounts and Part-II deals with the suit relating to Contracts.
In the absence of any averment in the plaint that there was mutual dealing in the sense that both the parties come under liability under each other. In the present case, the account can be treated to be an open account between the parties on account of transaction mentioned in the plaint and this account can be treated to be running, unsettled or unclosed account but the account in question maintained by Plaintiff cannot be treated to be a mutual account, since neither there are shifting balances nor independent obligations arising because of any other relationship except that of a buyer and a seller. Reliance may be placed in this regard upon the judgment in case titled as Manish Garg Vs. East India Udhog Limited, (2001) Latest Case Law 2022 DEL and in case titled as Bharath Skins Corporation v. Taneja Skins Company Pvt. Ltd., 186 (2012) DLT 290 (DB).
57. In respect of what is an open and running account, the legal position was summarized in view of the two judgments of the Hon'ble Supreme Court in the cases of Hindustan Forest Company Vs. Lal Chand & Anr. AIR 1959 SCC 1345 and Kesharichand Jaisukhal Vs. Shillong Banking Corporation AIR 1965 SC 1711. The ratio of these judgments was followed by the Hon'ble High Court of Delhi in decision in RFA No. 666/2017 titled as Harjit Singh Vs. M/s Bharat Hotels Ltd. & Anr (DOD as 31.07.2017). The Para 10 in the case of Harjit Singh (supra) reads as under:-
"10. The law with respect to the meaning of the expression "open mutual and current account" of Article I of the Limitation Act is now well settled.
CS (COMM) No.1390/2022 Digitally signed Pg. 32 / 51
Devendra by Devendra
Kumar Sharma
Kumar Date:
Sharma 2026.04.21
16:06:31
+0530
For Article 1 of the Limitation Act to apply, the account must be open i.e account must not be closed, it must be for the current year and it should be mutual ice there should be mutuality of transactions in the sense of shifting balances or counter obligations of each party against the other...."
58. Thus, from the law laid down as discussed herein above, it can be safely inferred that if there is only a 'single' contractual relationship, namely, that of buyer and seller between parties, such case is not one of reciprocal demands and thus, Article-85 of the Schedule to the Act, corresponding to Article-1 of the Act will not apply to such suits and in the present case, it is a case of single contractual relationship and therefore, the account between the plaintiff and defendant cannot be termed as a mutual account and as a necessary corollary, Article-1 of the Schedule to the Act, 1963 has no application.
59. The nature of transaction between the plaintiff and defendant is of seller and buyer and it does not indicate the account between the parties as mutual account i.e. there is no credit balance shown some time in favour of the plaintiff firm and some time in favour of the defendant and there is no reciprocal demand between the parties. Therefore, in the present case, Article I of the Limitation Act has no application. It is a simplicitor case where the goods were supplied to the Defendant by the Plaintiff. In such a situation, the limitation shall run at the best from the last transaction between the parties as per account maintained. In the present case, the last transaction between the parties as per own averment in the plaint by the plaintiff is dated 30.11.2016 and therefore at the best, the limitation period would Digitally signed CS (COMM) No.1390/2022 by Devendra Pg. 33 / 51 Devendra Kumar Sharma Kumar Date:
2026.04.21 Sharma 16:06:43 +0530 have expired in terms of the last entry made in the ledger account and that would be on 01.12.2019. Thus, on this count, it can be safely held that since the account between the parties was not mutual and running account but it was an open and running account, therefore, the present suit is barred by limitation.
60. Further, the second limb of the arguments of the plaintiff is that by virtue of issuing C-forms and by virtue of filing the balance sheets and showing the name of the plaintiff in the name of Sundry Creditors, there is written acknowledgment on behalf of the defendant company of its liability and consequent extension of limitation period till the filing of the balance sheets from 2016 to 2021.
61. So far as issue of C-forms is concerned, that was put on rest in the detailed order dated 25.02.2025 as discussed hereinabove, wherein it was held by the Ld. Predecessor Court in para 24 that C-form may not itself be sufficient to extend the limitation period but there may be other documents proved during the trial like balance sheet of defendant no.1 which may lead to a different conclusion. The relevant para no.23 and 24 are reproduced for ready reference as under:-
"23. As far as plaintiff's reliance on C-Forms is concerned, defendant has challenged the same by placing reliance on Taipack Limited & Ors. (supra) and Alliance Paints and Varnish Works Pvt. Ltd. (supra). The plaintiff has, however, relied upon judgment in case of ARC Arora Projects Pvt. Ltd. (supra) wherein reliance upon list of creditors and debtors in the balance sheet of company was permitted as acknowledgment of liability by holding that debt shown in balance sheet of a company amounts to an acknowledgment for the purposes of Section 19 of the Limitation Act. The plaintiff thus filed audited balance sheets of defendant no.1 for the Financial Years 2016-17, Digitally signed CS (COMM) No.1390/2022 Pg. 34 / 51 Devendra by Devendra Kumar Sharma Kumar Date:
Sharma 2026.04.21 16:06:49 +0530 2017-18, 2018-19, 2019-20 and 2020-21 to contend that by virtue of incorporation of liability towards plaintiff in the list of creditors and debtors, in the said balance sheets, the defendant no.1 has acknowledged that it owes payment to plaintiff and the same would amount to an acknowledgment for the purposes of Section 19 of the Limitation Act. Though per se name of defendant no.1 is not reflected from the name of creditors from the said balance sheets, it is contended that the plaintiff can always lead necessary evidence by summoning the relevant record to prove the same at an appropriate stage of trial.
24. Though C-Forms by themselves may not be sufficient for plaintiff to establish that the suit has been filed within period of limitation but conjoint reading with record summoned to prove relevant balance sheets of defendant no.1 may lead to a different conclusion. Per se the documents placed on record vide its application U/o XI Rule 1(4) CPC r/w Section 151 CPC coupled with corresponding amendment in plaint by incorporating para 22(a) and 22(b), which has been allowed by the Court today, make the question of limitation in the instant case a mixed question of law and fact rather than pure question of law alone. Thus prayer of defendants that plaint filed by plaintiff ought to be rejected as being barred by limitation cannot be allowed at this stage. Accordingly, application U/o VII Rule 11 r/w Section 151 CPC filed on behalf of defendant is dismissed."
62. Thus, a limited scope was left regarding the issue of limitation and it was for the plaintiff to prove that by virtue of balance sheets of the defendant no.1 company, there was written acknowledgment of liability.
63. The copy of the balance sheets of the defendant no.1 company for the year 2016-2021 has been exhibited as Ex.PW1/3. These documents run on the paper book from page no.213 to 369.
64. In the affidavit in examination-in-chief, Ex.PW1/A, in para 28, the detail of total current liability of defendant no.1 in the different financial year starting from the year 2017 till 2021 Digitally signed CS (COMM) No.1390/2022 Devendra by Devendra Pg. 35 / 51 Kumar Sharma Kumar Date:
Sharma 2026.04.21 16:06:55 +0530 have been mentioned. It has also been claimed in the said para by PW1 that the dues amount of the plaintiff is also duly reflected in the said balance sheets of the defendant company and this is a clear cut admission by the defendants which is also evident from C-forms. Apart from that issuance of C-forms on 28.12.2017 and 23.04.2018 have also been claimed to be written acknowledgment of liability alongwith the receipt of goods and both the facts i.e. issuing of C-forms and filing balance sheets with list of sundry creditors have been claimed to be conjointly the written acknowledgment of liability.
65. In his cross-examination, when he was confronted with his deposition in para 28 in his affidavit in examination-in- chief, he has testified that name of the plaintiff firm is mentioned in the list of sundry creditors but when he was asked to point out the page number in which the name of plaintiff firm has been mentioned, he replied that he cannot point out any such document and further testified that in the documents filed on record, there is no such list of sundry creditors. Thus, by his own admission in his cross-examination, apparently it has come on record that no such list of sundry creditors were ever filed. As a matter of fact since beginning it was projected on behalf of the plaintiff that mere filing of balance sheet with the mention of outstanding liability should be presumed to include the liability qua the plaintiff as well without placing on record any such specific documents showing the name of the plaintiff and thereby defendant has admitted the liability qua the plaintiff. Mere filing of balance sheet by any company with details of outstanding liability cannot be treated to be acknowledgment as such of Digitally signed CS (COMM) No.1390/2022 by Devendra Pg. 36 / 51 Devendra Kumar Sharma Kumar Date:
2026.04.21 Sharma 16:07:00 +0530 specific liability qua the person/ entity supplied the goods or services and at the best it can be treated to be a cumulative liability of the defendant qua all the creditors. In such circumstances, the plaintiff is bound to either bring on record by summoning the documents or by cross-examining the witness on behalf of the defendant, the sundry list of creditors so as to pin point the liability and its admission qua specific creditor. However, in the present case no such document has been placed on record or summoned by the plaintiff in order to prove the written admission/acknowledgment of liability by the defendant. As a matter of fact even no notice U/o XI Rule 1(6) of CPC has ever been given to the defendant either to produce their balance sheet alongwith list of sundry creditors or their ledger account nor has been proved on record.
66. In order to bring the facts akin to the case laws relied upon by the plaintiff, the plaintiff was required to prove that apart from issuing the C-forms, there was written acknowledgment of liability in the form of balance sheets with list of sundry creditors but in the present case in the testimony of PW1 it has further come on record in the reply to the question as to whether there is any document on record showing admission of outstanding liability by the defendant company towards the plaintiff firm that there is no such documents.
67. However, the case of PW1 did not rest on the big no but by voluntary statement he has claimed that he has received a balance confirmation email from the defendant company admitting the liability of the suit amount and he himself stated that the said email has not been filed on record. This cross-
Digitally signed
CS (COMM) No.1390/2022 by Devendra Pg. 37 / 51
Devendra Kumar Sharma
Kumar Date:
Sharma 2026.04.21
16:07:06
+0530
examination was there on 12.08.2025 before lunch. However, after lunch the witness PW1 without asking of any question regarding the said email has filed a screenshot of email dated 06.12.2019 stating itself to be the email sent acknowledging the balance confirmation. This document was never placed on record prior to the cross-examination on the issue of admission of liability in writing which was marked as Mark-P1.
68. This screenshot of email Mark-P1 has been produced in response to the question put to PW1 regarding written admission of liability without any appropriate certificate under Evidence Act and therefore, this document is not admissible in evidence. More so, perusal of the Mark-P1 further makes it clear that in his cross-examination, this witness has introduced a new story of written admission of liability on behalf of defendant company finding the time during the lunch hours which otherwise though not relevant to the present case but is a matter of concern as to how a smart witness can introduce a new story which was never pleaded. Though it was a smart move and story on behalf of PW1 but to his bad luck he placed on record a screenshot regarding the balance confirmation and that too of the year 2011-12 which is not even the subject matter of dispute in the present case. This document in no way has any relevance or relation with the present case and therefore, is of no help to the case of the plaintiff as there is no admission of the liability in the entire documents of the amount involved in the present suit.
69. Admitted case of the parties are that last invoice was issued on 30.11.2016 and last payment on behalf of the defendant was made on 24.11.2016 and therefore, in any case the limitation Digitally signed CS (COMM) No.1390/2022 by Devendra Pg. 38 / 51 Devendra Kumar Sharma Kumar Date:
2026.04.21 Sharma 16:07:13 +0530 period would have expired in the month of December 2016. In order to prove the extension of limitation period, the plaintiff was required to prove that there was written acknowledgment of liability in terms of Section 18 of the Limitation Act on behalf of the defendant within the limitation period.
70. Even PW1 in his cross-examination has admitted that in any of the email confirmations Ex.P2 (colly), there is no mention of any kind of due towards the defendant company while asking for C-forms. These emails Ex.P2 (colly) are dated 02.12.2016 to 20.03.2018 and in view of the admission of PW1 that there was no mention of any dues in these emails, it clearly demonstrates that these emails were only sent for the purposes of asking C-forms and had there been any dues it would have been found mention in these emails. The claim of PW1 that the outstanding was informed verbally while sending the emails appears to be an afterthought introduction of verbal demand.
71. Now coming to the admission and acknowledgment of liability within the limitation period on behalf of the defendant company, the testimony of DW1 becomes more important as this witness has appeared on behalf of the defendant company and there was occasion for the plaintiff to ask for production of documents pertaining to claim of the plaintiff that there was written acknowledgment of liability in the balance sheet/list of creditors of the defendant company as well as in its ledger account.
72. Witness DW1 was extensively cross-examined and this witness has admitted that the books of account was Digitally signed CS (COMM) No.1390/2022 Devendra by Devendra Kumar Sharma Pg. 39 / 51 Kumar Date:
Sharma 2026.04.21 16:07:18 +0530 maintained by the defendant company duly audited by the Auditor and respective Income Tax Returns till date on each and every year and there is also filing of Income Tax Returns before the Registrar of the Company and this witness has not brought any such document on the day of his cross-examination. After this cross-examination of DW1, the suggestion has been given that these documents have not been brought or filed on record as same goes against the interest of the defendant company. However, no prayer was made that since the line of custody of these documents are with the defendant company and since it is going against there interest, therefore, this witness should be asked to produce these documents. It appears that the further cross-examination was conducted with the presumption that mere filing of the balance sheets showing the cumulative liabilities of defendant company would be suffice to prove the claim of the plaintiff against the specific liability. Perusal of those balance sheets makes it clear that there is different dues amount shown in different financial years but there is no specific due amount shown in the entire balance sheet of any specific creditor and in such circumstances it was an opportunity on behalf of the plaintiff to ask the witness DW1 to produce the relevant documents which were going in favour of the plaintiff and against the interest of defendant company. Instead of that a suggestion has been given that in the list of creditors name of the plaintiff is also there since the year 2016 to 2025. This suggestion appears to be again given on the presumption that the name of the plaintiff must be there in the said list of creditor once the balance sheet has been filed by the defendant company before the Registrar of Companies. This witness DW1 himself has never Digitally signed CS (COMM) No.1390/2022 Pg. 40 / 51 Devendra by Devendra Kumar Sharma Kumar Date:
Sharma 2026.04.21 16:07:24 +0530 seen any list of creditors personally and therefore, even if there would have been admission on his behalf of mention of name of the plaintiff in the list of creditors would have left the case of plaintiff neither here nor there as the witness himself is not aware about the actual and factual position of list of sundry creditors.
73. Further cross-examination of DW1 has been conducted and he was asked that there is no document on behalf of the defendant company that the name of the plaintiff was written off from the profit and loss account. Non-production of document on behalf of the defendant in absence of any written notice to produce the document and in absence of proof of such notice cannot be treated to be giving rise any adverse presumption against the defendant.
74. This witness DW1 has admitted that C-forms were sent by the defendant company in 2017 and 2018 and has also admitted that C-forms are issued after verification through books of account. However, mere issuance of C-forms in absence of any cogent proof that there was any written admission of liability on behalf of the defendant itself cannot be construed to be written admission/ acknowledgment of liability so as to extend the limitation period.
75. DW1 has specifically denied that the suit amount was included in the current liabilities shown in the balance sheets of the defendant company and in such circumstances it was incumbent upon the plaintiff either to prove in the testimony led on his behalf regarding the written acknowledgment of liability Digitally signed CS (COMM) No.1390/2022 by Devendra Pg. 41 / 51 Devendra Kumar Sharma Kumar Date:
2026.04.21 Sharma 16:07:31 +0530 during the subsistence of limitation period or in the testimony led on behalf of the defendant. However, as discussed hereinabove the plaintiff has failed to bring on record any evidence in order to prove his claim that the limitation period got extended by virtue of issuing C-forms on behalf of the defendant coupled with the fact that balance sheet was filed showing the total liability towards the creditor.
76. In view of the above discussion, this Court is of the opinion that plaintiff has failed to prove on preponderance of probability that there was written acknowledgment of liability by the defendant within the meaning of section 18 of Limitation Act. Whereas defendant has succeeded in proving on the preponderance of probability that the suit is barred by limitation as the period of limitation was already expired on 01.12.2019 and there was no acknowledgment of any kind of outstanding by the defendant in any manner after 30.11.2016. Both the issues are accordingly decided in favour of the defendant and against the plaintiff.
ISSUE No.5:-
Whether the goods supplied by the plaintiff was of sub-standard quality, if so, its effect upon the claim of the plaintiff? (OPD)
77. Onus of proving this issue was on defendant who has alleged that plaintiff had supplied inferior and sub-standard quality of products to defendant due to which defendant suffered huge financial losses.
Digitally signed CS (COMM) No.1390/2022 Devendra by Devendra Kumar Sharma Pg. 42 / 51 Kumar Date: Sharma 2026.04.21 16:07:36 +0530
78. Admittedly, plaintiff and defendant had been in business since a very long time and there was no complaint regarding the quality of products (chemicals) supplied by plaintiff to defendant during the entire period the parties had business relations, save and except, since the year 2016 as claimed by defendant. It is alleged that due to sub-standard products supplied by plaintiff, the defendant suffered huge losses which defendant informed the plaintiff's officer who approached them for the alleged payment but plaintiff did not take the complaints made by defendant seriously. Ultimately defendant had to terminate business dealings with the plaintiff.
79. The counsel for defendant has relied upon testimony of DW1/Sh. Sanjeev Sharma, Manager-Legal of the Defendant No.1 Company to contend that plaintiff had supplied poor and sub-standard quality of products to defendant due to which defendant company suffered considerable loss and was compelled to close its business dealings with the plaintiff.
80. Per contra, counsel for plaintiff has contended that as per the terms and conditions on the invoices, it was specifically mentioned that "before using our products in full- scale production, the customer should make his own tests to determine the suitability of our products for his own purpose under his operating conditions. As the circumstances under which our products are stored, handled and used, are beyond our control, we cannot assume any responsibility for their use by the customer. In spite of the aforementioned specific instructions, if the customer uses our products in full-scale production without Digitally signed CS (COMM) No.1390/2022 Pg. 43 / 51 Devendra by Devendra Kumar Sharma Kumar Date:
Sharma 2026.04.21 16:07:42 +0530 prior tests, sustains and proves to us that he has sustained loss due to deficiency in quality of the goods supplied, our liability is limited to the value based on purchase price of the quality of our goods actually used. Submission of claim does not absolve the customer of the obligation to pay the amount due" and as such the plaintiff clearly called upon the defendant to accept the goods with full responsibility and the plaintiff will not be held responsible for the quality of the goods supplied in any manner whatsoever. Moreover, the defendant did not check the material received from plaintiff at any point of time and hence cannot take a plea of defective products. Further plaintiff was never informed about the defective products. The plea of defective products has been taken by defendant as an afterthought to put forth some defence to the claim of plaintiff and ought to be rejected.
81. As per the mandate of Section 41 of the Sale of Goods Act, the purchaser not having inspected the goods in question prior to delivery, has a right to inspect the same on delivery and report defects within a reasonable time of delivery. If not rejected within reasonable time, mandate of Section 42 stipulates that the purchaser would be deemed to have accepted the goods. Section 41 and Section 42 of the Sale of Goods Act read as under:-
"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 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 Digitally signed CS (COMM) No.1390/2022 Pg. 44 / 51 Devendra by Devendra Kumar Sharma Kumar Date:
Sharma 2026.04.21 16:07:48 +0530 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."
82. In the instant case also defendant failed to prove that he had communicated to plaintiff regarding the supply of defective goods. Though defendant had taken this plea in his reply, Ex.P5, to plaintiff's legal notice, the same is also devoid of any details of the defective material, date when defendant discovered the alleged defect and if, prior to receipt of legal notice, Ex.P4, from plaintiff, it (defendant) had communicated to plaintiff in any manner about the alleged defective material. In its written statement also, the defendant failed to clarify from which lot of goods i.e. invoices Ex.P5 (Colly) the alleged defective goods pertained and when, if at all, he had informed plaintiff regarding the same. The steps taken by defendant to precipitate the issue when plaintiff failed to take note of oral requests made by defendant to take back defective goods is also not specified. Even the date when the defective goods were discovered and factum thereof was communicated by defendant to plaintiff has not been specified. In these facts and circumstances, defence of defective goods taken by defendant is without any basis.
CS (COMM) No.1390/2022 Digitally signed
by Devendra
Pg. 45 / 51
Devendra Kumar Sharma
Kumar Date:
2026.04.21
Sharma 16:07:53
+0530
83. Admittedly, no communication has been placed on record by defendant from which it can be concluded that defendant had ever communicated to the plaintiff regarding defective products, if any, supplied by plaintiff. The testimony of the witness examined by defendant namely DW1/Sh. Sanjeev Sharma is also not sufficient to bring out that the plaintiff had supplied sub-standard products to the defendant due to which it suffered huge financial losses.
84. Moreover, during his cross-examination, the DW1 admitted that no document has been placed on record by the defendant company pertaining to substantial loss or poor or substandard quality of products supplied by plaintiff as alleged by defendant/DW1 in para 5 (Mark A to A1) of his affidavit. Though he has stated that it was conveyed telephonically to the plaintiff but admitted that no proof or evidence in support of the same had been placed on record. Nothing had been produced on record by defendant/DW1 from which it can be ascertained as to on how many occasions defendant returned goods, alleged to be of defective and inferior quality, to plaintiff and quantum thereof.
85. Further, the plea of defective goods taken by defendant is even otherwise not maintainable in view of judgment in case of 'Lohmann Rausher Gmbh vs Medisphere Marketing Pvt. Ltd.' 117 (2004) DLT 95 wherein it was held by the Hon'ble High Court of Delhi:-
"......21. As per the mandate of Section 41 of the Sale of Goods Act, the defendant not having inspected the goods in question prior to delivery, had a right to inspect the case on delivery and report defects within a reasonable time of Digitally signed CS (COMM) No.1390/2022 by Devendra Pg. 46 / 51 Devendra Kumar Sharma Kumar Date:
2026.04.21 Sharma 16:07:59 +0530 delivery. If not rejected within reasonable time, mandate of Section 42 stipulates that the defendant would be deemed to have accepted the goods."
86. In the instant case besides failing to specify the quantity of the damaged goods, defendant has also failed to clarify at what point of time after delivery of goods by plaintiff, the alleged damage in the goods was detected. Hence unsubstantiated plea of damaged goods raised by defendant is not maintainable.
87. The nutshell of foregoing discussion is that defendant has failed to prove that the goods supplied to defendant by plaintiff were of sub-standard quality. This issue is, therefore, decided in favour of plaintiff and against the defendant.
ISSUE No.6:-
Whether there was an oral settlement between the plaintiff and defendant no.1 for a full and final payment of Rs.3,02,290/- and whether the said amount was paid on 24.11.2016 towards all the liabilities of the defendant? (OPD)
88. The onus of proving this issue was on defendant. Witness DW1 in his cross-examination has admitted that no document has been placed on record. By way of voluntary statement he has stated that it was oral. However, he himself has admitted that the defendant company is a public limited company. Thus, in the circumstances, it appears to be doubtful Digitally signed by Devendra CS (COMM) No.1390/2022 Devendra Kumar Sharma Pg. 47 / 51 Kumar Date:
2026.04.21 Sharma 16:08:04 +0530 that the defendant company has entered into an oral settlement and made payment against the oral settlement. Even for the sake of arguments, if it is assumed that there was oral settlement, even nothing has been placed on record in the form of ledger account that the said settlement was executed and appropriate entry was made in order to maintain the books of accounts of the defendant company. In absence of any relevant books of account, the claim of the defendant qua the oral settlement appears to be taking benefit of occasion when there was no written acknowledgment of liability within the limitation period. There is no evidence on record at all that any such oral settlement was arrived at between the parties, there is no details of any such oral settlement i.e. date, time or the persons involved in the said oral settlement. Thus, in absence of any clear and cogent evidence, it cannot be said that there was any oral settlement between the parties qua the amount of Rs.3,02,290/- and that too the delivery of goods are there by plaintiff subsequent to said payment.
89. In view of the aforesaid discussion, this Court is of the opinion that defendant has failed to prove that there was an oral settlement between the plaintiff and defendant no.1 for a full and final payment of Rs.3,02,290/- and that the said amount was paid on 24.11.2016 towards all the liabilities of the defendant. This issue is decided against the defendant and in favour of the plaintiff.
ISSUE No.8:-
Whether this Court has no territorial jurisdiction to adjudicate upon the present suit? (OPD) CS (COMM) No.1390/2022 Pg. 48 / 51 Devendra Digitally signed by Devendra Kumar Kumar Sharma Date: 2026.04.21 Sharma 16:08:10 +0530
90. Onus of proving this issue was upon defendant. The simple contention of the defendant is that since no part of cause of action arose within jurisdiction of this Court, it is not entitled to adjudicate upon the lis filed by the plaintiff. It is alleged by the defendant that it used to place order in Chandigarh only and the plaintiff also used to supply the goods outside the territorial jurisdiction of this Court and the payments were made by the defendant outside the jurisdiction of this Court. The defendant neither resides nor works for gain within the territorial jurisdiction of this Court. As such no cause of action, as alleged by the plaintiff, ever arose within territorial jurisdiction of this Court.
91. On the other hand, Counsel for the plaintiff has contended that plaintiff had supplied goods to defendant, from time to time, through various invoices and that it was specifically mentioned on the said invoices "all disputes subject to Delhi jurisdiction". The defendant accepted the invoices without raising any objection regarding the terms and conditions mentioned thereupon and thus, accepted the jurisdiction of Delhi Courts.
92. In the instant case, it is not disputed that defendant had purchased chemicals from the plaintiff. It is also not disputed that plaintiff is carrying out its business from Delhi while defendant is based at Chandigarh. Admittedly, there is no separate agreement between the parties with regard to jurisdiction of the Court which would adjudicate upon the dispute. It is seen from the copies of purchase orders placed on record by the plaintiff that the purchase orders were placed by Digitally signed CS (COMM) No.1390/2022 Pg. 49 / 51 Devendra by Devendra Kumar Sharma Kumar Date:
Sharma 2026.04.21 16:08:15 +0530 defendant at plaintiff's address of 113, Dilkhush Building, Chowk Tilak Bazar, Delhi-110006. The invoices, Ex.P5 (colly) have specific term mentioned thereupon "Subject to Delhi Jurisdiction". Further, all the goods were supplied by plaintiff to defendant from Delhi. The part payment for goods was made by defendant in the bank account of the plaintiff at Delhi. The defendant has, thus, failed to discharge the onus of proving that the Court at Delhi does not have territorial jurisdiction to entertain the suit of plaintiff. On the other hand, from the testimony of its witnesses and documents placed on record by it, plaintiff has succeeded in proving that this Court has jurisdiction to entertain the suit filed by it. This issue is also decided in favour of the plaintiff and against the defendant.
ISSUE No.1:-
Whether the plaintiff is entitled to a decree of recovery for a sum of Rs.25,38,223/- against the defendants (jointly and/or severally), as prayed for? (OPP) & ISSUE No.2:-
Whether the plaintiff is entitled for any interest, if so, at what rate and for which period? (OPP)
93. The onus of proving both the issues was on plaintiff. It is the case of the plaintiff that the firm had supplied the different kinds of goods to the defendant against the orders placed by defendant from time to time and raised various invoices/bills. All the material supplied by plaintiff was accepted by defendant without any complaint regarding defect and/or Digitally signed CS (COMM) No.1390/2022 Devendra by Devendra Kumar Sharma Pg. 50 / 51 Kumar Date:
Sharma 2026.04.21 16:08:20 +0530 damage in the quality and quantity of the material. Even defendant has failed to prove that there was one time settlement between the parties. Thus, from the admitted case of the parties, the plaintiff has been able to prove the supply of goods and due amount of Rs.15,29,050/- in the ledger account. However, since it has been held while deciding the issue No.3 and 7 that the present suit of the plaintiff is barred by the limitation, the plaintiff cannot be held entitled for recovery of principal amount or any interest thereon. Hence, issue No.1 and 2 are disposed off accordingly.
R E L I E F :-
94. In view of foregoing discussion, after appreciation of evidence led on record and in view of the law laid down regarding the cause of action and limitation as discussed herein above, this Court is of the opinion that the plaintiff has failed to prove on preponderance of probability his entitlement for recovery of Rs.25,38,223/- with interest as the suit is barred by limitation. Therefore, the suit of the plaintiff is dismissed.
95. However, in the facts and circumstances as discussed herein above, parties to bear their own costs.
Decree sheet be drawn up accordingly.
File be consigned to record room after due compliance.
Announced in the open Court Devendra Digitally signed by Devendra on 21st Day of April, 2026 Kumar Kumar Sharma Date: 2026.04.21 Sharma 16:08:26 +0530 (DEVENDRA KUMAR SHARMA) District Judge (Commercial Court)-03 Central, Tis Hazari Courts, Delhi CS (COMM) No.1390/2022 Pg. 51 / 51