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M/S Indiatech (A Partnership Firm) vs . M/S Johnson Engineers Th. Sole ... on 18 May, 2023

        M/s Indiatech (A Partnership Firm) Th. Mr. Rajiv Kakkar (Partner)
      Vs. M/s Johnson Engineers Th. Sole Proprietor Mr. Christophar Pacheco

 IN THE COURT OF ADDITIONAL DISTRICT JUDGE­
   02, SOUTH DISTRICT, SAKET COURTS COMPLEX,
                   NEW DELHI

Presiding Judge: Sh. Dinesh Kumar.

CS DJ No. 7509/2016
Filing No. 32049/2011
CNR No. DLST01­000481­2011

In the matter of :

M/s Indiatech (A Partnership Firm)
Through Mr. Rajiv Kakkar (Partner)
74­B, Sector - 31,
Faridabad (Haryana)                                    ................Plaintiff
                          Versus
M/s Johnson Engineers
Through Sole Proprietor
Mr. Christophar Pacheco
206, Bhanot Corner,
Pamposh Enclave,
Greater Kailash Part­I
New Delhi.                                            ..............Defendant

  Date of Institution                             :       21.12.2011
  Date of reserving the judgment                  :       11.05.2023
  Date of pronouncement                           :       18.05.2023
  Decision                                        :       Decreed


  CS DJ No. 7509/2016
  CNR No. ­ DLST01­000481­2011
  Page 1 of 59             Dinesh Kumar/ADJ­02/South/Saket/ND/18.05.2023
      M/s Indiatech (A Partnership Firm) Th. Mr. Rajiv Kakkar (Partner)
   Vs. M/s Johnson Engineers Th. Sole Proprietor Mr. Christophar Pacheco

SUIT FOR RECOVERY OF RS. 14,96,069/­ (RUPEES
FOURTEEN LAKH NINETY SIX THOUSAND SIXTY
              NINE ONLY)

JUDGMENT

1. Vide this judgment, I shall dispose of the Civil Suit filed by the plaintiff for recovery of Rs.14,96,069/­. The brief facts of the case, as per the plaint, are as under:­ 1.1. The plaintiff is a partnership firm and is duly registered with the Registrar of Firms. The firm is engaged in the business of manufacturing of electrical control panels under the name and style of M/s Indiatech having its registered office at 74­B, HSIIDC, Sector - 31, Faridabad, Haryana. Shri Rajiv Kakkar is one of the partners of the plaintiff firm. He is fully conversant with the facts and circumstances of the case. The present suit is instituted, signed and verified by Mr. Rajiv Kakkar. He is fully authorized and competent to conduct the present case on behalf of the firm. 1.2. The defendant is a sole proprietorship firm. Mr. Christophar Pacheco is sole proprietor of the firm and is an Electrical Contractor.

CNR No. ­ DLST01­000481­2011 Page 2 of 59 Dinesh Kumar/ADJ­02/South/Saket/ND/18.05.2023 M/s Indiatech (A Partnership Firm) Th. Mr. Rajiv Kakkar (Partner) Vs. M/s Johnson Engineers Th. Sole Proprietor Mr. Christophar Pacheco 1.3. During the period from May 2008 to December 2009, the defendant had placed various purchase orders with the plaintiff firm for the supply of electrical panels at various places. The plaintiff supplied the electrical panels / materials to the defendant vide various invoices at different places as per the orders of the defendant. 1.4. The parties were maintaining mutual, open, running and current account of each other in which entries were made of the invoices raised by the plaintiff on the defendant from time to time and various payments made by the defendant to the plaintiff from time to time. The account has not been closed and settled till date. The last entry in the account was of the payment made by the defendant of Rs. 2,97,628/­ on 09.03.2010.

1.5. Under the said running account, payment of Rs. 10,99,681/­ is still pending. The defendant is liable to pay the same. Towards the total payment of Rs. 23,25,044/­ of the electrical panels as supplied by the plaintiff to the defendant from May 2008 to December 2009, the defendant has only made a payment of Rs. 12,25,363/­ and balance amount of Rs. 10,99,681/­ is CS DJ No. 7509/2016 CNR No. ­ DLST01­000481­2011 Page 3 of 59 Dinesh Kumar/ADJ­02/South/Saket/ND/18.05.2023 M/s Indiatech (A Partnership Firm) Th. Mr. Rajiv Kakkar (Partner) Vs. M/s Johnson Engineers Th. Sole Proprietor Mr. Christophar Pacheco still due and liable to be paid by the defendant to the plaintiff.

1.6. The plaintiff requested the defendant to make the outstanding payment of Rs. 10,99,681/­ of various pending invoices. However, the defendant did not release the said amount despite several requests. The defendant did not pay any heed to the requests of the plaintiff and failed to make outstanding payment of Rs. 10,99,681/­.

1.7. The plaintiff issued a legal notice dated 03.09.2011 to the defendant calling upon the defendant to make the payment of pending invoices along with the interest accrued thereon within 15 days of the receipt of the notice. The legal notice was served upon the defendant, however, the defendant deliberately and intentionally did not make the payment to the plaintiff. 1.8. The defendant is liable to pay a sum of Rs. 10,99,681/­ along with interest @ 18% p.a. to the plaintiff from January 2010 till filing of the present suit and future interest @ 18% p.a. on the said amount till the date of the payment. Accordingly, the defendant is liable to pay a total amount of Rs. 14,96,069/­ i.e. CS DJ No. 7509/2016 CNR No. ­ DLST01­000481­2011 Page 4 of 59 Dinesh Kumar/ADJ­02/South/Saket/ND/18.05.2023 M/s Indiatech (A Partnership Firm) Th. Mr. Rajiv Kakkar (Partner) Vs. M/s Johnson Engineers Th. Sole Proprietor Mr. Christophar Pacheco principal amount of Rs. 10,99,681/­, interest @ 18% i.e. Rs. 3,96,388/­ till the date of filing of the suit along with future interest @ 18% from the date of filing of the suit till the date of the payment.

1.9. This Court has territorial jurisdiction to try and entertain the present suit of the plaintiff as the purchase orders were issued and payments were received within the jurisdiction of this Court. The defendant also voluntarily carries on business within the territorial jurisdiction of this Court. Hence, the present suit has been filed with the following prayers :

a) "Pass a decree for money in favour of the plaintiff and against the defendant for a sum of Rs. 14,96,069/­ (Rupees fourteen lakh ninety six thousand sixty nine only).

b) Grant pendentilite and future interest on the said decreetal amount @ 18% per annum in favour of the plaintiff and against the defendant from the date of filing of the present suit till the actual realization of the aforesaid decreetal amount.

c) Award the cost of the suit in favour of the plaintiff and against the defendant.

d) Or to pass any such other order or orders as this Hon'ble Court may deem fit and proper in the facts and circumstances of the case."

CNR No. ­ DLST01­000481­2011 Page 5 of 59 Dinesh Kumar/ADJ­02/South/Saket/ND/18.05.2023 M/s Indiatech (A Partnership Firm) Th. Mr. Rajiv Kakkar (Partner) Vs. M/s Johnson Engineers Th. Sole Proprietor Mr. Christophar Pacheco

2. Summons were directed to be issued to the defendant vide order dated 21.12.2011. The defendant appeared and filed his Written Statement. He has contested the suit on the basis of the following grounds :­ 2.1. The present suit is totally misconceived and is without any cause of action. The suit is barred by limitation. The suit has not been filed by a duly constituted and registered partnership firm. Sh. Rajiv Kakkar has not been authorized by the plaintiff firm to file the present suit on its behalf.

2.2. The dispute between the parties pertains primarily to the purchase order dated 08.11.2008 pursuant to which certain goods were to be supplied by the plaintiff to the defendant at one of his site i.e. Rockmans Beer Garden, 4th Floor Ambiance Mall, Gurgaon. The plaintiff did not supply the goods as per the delivery schedule mentioned in the purchase order and the supplies were much delayed as against the stipulated delivery time which was within 10 days of the purchase order. The plaintiff against the purchase order dated 08.11.2008 raised certain invoices dated 09.12.2008 for a sum of Rs. 2,79,537/­, invoice dated CS DJ No. 7509/2016 CNR No. ­ DLST01­000481­2011 Page 6 of 59 Dinesh Kumar/ADJ­02/South/Saket/ND/18.05.2023 M/s Indiatech (A Partnership Firm) Th. Mr. Rajiv Kakkar (Partner) Vs. M/s Johnson Engineers Th. Sole Proprietor Mr. Christophar Pacheco 11.12.2008 for a sum of Rs. 64,361/­ and invoice dated 15.12.2008 for a sum of Rs. 5,65,724. The value to the said invoices was Rs. 9,09,622/­. The goods having not been supplied as per the terms of the purchase order, the said goods, on account of late delivery, were not accepted. The same led to delay in completion of certain works entrusted upon the defendant by M/s Rockman Breweries Ltd. for their Rockman Beer Gardens on 04th Floor, Ambience Mall, Gurgaon, Haryana on account of which M/s Rockman Breweries Ltd. refused to make certain payments due to the defendant. The defendant suffered substantial damage and loss of delay in delivery by the plaintiff at the said site.

2.3. The defendant, being left with no alternative, filed a suit for recovery against M/s Rockman Breweries Ltd. in the High Court of Delhi and has claimed certain amount which are due to the defendant from them.

2.4. The claim of the plaintiff in the present suit is only to the extent of 3 invoices dated 09.12.2008, 11.12.2008 and 15.12.2008 for a value of Rs.

CNR No. ­ DLST01­000481­2011 Page 7 of 59 Dinesh Kumar/ADJ­02/South/Saket/ND/18.05.2023 M/s Indiatech (A Partnership Firm) Th. Mr. Rajiv Kakkar (Partner) Vs. M/s Johnson Engineers Th. Sole Proprietor Mr. Christophar Pacheco 9,09,622/­. The claim is of rejected goods and is barred by limitation as it is beyond 3 years from the date when the invoices against the purchase order dated 08.11.2008 were allegedly raised by the plaintiff. Therefore, plaintiff cannot claim any amount in the present suit against the purchase order dated 08.11.2008. The defendant has already paid the plaintiff the full amount against the other alleged purchase orders, although even the deliveries against the same were delayed.

2.5. The ledger account of the plaintiff as maintained by the defendant in fact shows a debit balance of Rs. 19,888/­ having been paid in excess to plaintiff.

2.6. The other purchase orders which are relied upon by the plaintiff in filing the present suit being purchase order dated 26.10.2009, 16.10.2009 and 22.12.2009 have already been fully paid by the defendant to the plaintiff. The said purchase orders pertain to the other sites of the defendant and not to the site of Rockman Breweries Ltd.

CNR No. ­ DLST01­000481­2011 Page 8 of 59 Dinesh Kumar/ADJ­02/South/Saket/ND/18.05.2023 M/s Indiatech (A Partnership Firm) Th. Mr. Rajiv Kakkar (Partner) Vs. M/s Johnson Engineers Th. Sole Proprietor Mr. Christophar Pacheco 2.7. The dealings between the parties were on the basis of separate purchase orders and the deliveries as well as invoices separately raised against them. There was no running account between the parties as alleged by the plaintiff. The payments were always made on the basis of respective purchase orders and not on running account basis. Therefore, all the payments of the plaintiff against the alleged purchase orders other than the purchase order dated 08.11.2008 have been already made.

2.8. The statement of account filed by the plaintiff is not correct as certain payments which had been made by the defendant to the plaintiff in cash have not been reflected in the alleged statement of account. As per the statement of account maintained in due course of business by the defendant, the defendant had also paid Rs. 2 Lakhs in cash on 31.12.2009 which has not been shown by the plaintiff in the alleged statement of account relied upon by the plaintiff. The ledger account of the plaintiff as maintained by the defendant in fact shows a debit balance of Rs. 19,888/­ as having been paid in excess to plaintiff.

CNR No. ­ DLST01­000481­2011 Page 9 of 59 Dinesh Kumar/ADJ­02/South/Saket/ND/18.05.2023 M/s Indiatech (A Partnership Firm) Th. Mr. Rajiv Kakkar (Partner) Vs. M/s Johnson Engineers Th. Sole Proprietor Mr. Christophar Pacheco 2.9. The plaintiff in invoice no. 144 has made wrong entries and charged double for some of the items and shown a sum of Rs. 9,948/­ in excess which is not correct. The entire due payment has already been made. There was no agreement between the plaintiff and the defendant for payment of any interest by the defendant to the plaintiff. Hence, it is prayed that the suit of the plaintiff may be dismissed.

3. The plaintiff filed replication to the written statement of defendant. It has denied the averments made in the written statement and reaffirmed the facts stated in the plaint.

4. On the basis of the pleadings, vide order dated 08.04.2013, following issues were framed :­

1. Whether the plaintiff is entitled for a decree of recovery of Rs. 14,96,069/­ alongwith pendent elite and future interest @ 18% per annum as claimed in the plaint? OPP

2. Whether the plaintiff has no cause of action to file the present suit, if so, to what effect? OPD

3. Whether the suit is barred by limitation? OPD

4. Whether the plaint has not been signed, verified or filed by a properly authorized person as claimed in the written statement? OPD CS DJ No. 7509/2016 CNR No. ­ DLST01­000481­2011 Page 10 of 59 Dinesh Kumar/ADJ­02/South/Saket/ND/18.05.2023 M/s Indiatech (A Partnership Firm) Th. Mr. Rajiv Kakkar (Partner) Vs. M/s Johnson Engineers Th. Sole Proprietor Mr. Christophar Pacheco

5. Whether the plaintiff has not approached this Court with clean hands and has concealed the material facts, if so, to what effect? OPD

6. Relief.

5. The plaintiff examined Sh. Rajiv Kakkar as PW1 in order to prove its case. He tendered his evidence by way of affidavit Ex. PW1/A. He has reiterated the facts stated in the plaint. He has relied upon the following documents:­

1. Certified copy of relevant entries in the register Registrar of Firms which are Ex.PW1/1 (colly).

2. Copies of the online purchase orders which are Ex.PW1/2 (colly).

3. Copies of various invoices showing supply of electrical panels to the defendant which are Ex.PW1/3 (colly).

4. Copy of statement of account as maintained by the firm of the plaintiff which is duly attested and showing transactions of the parties w.e.f. 01.04.2009 to 31.07.2011 which is Ex.PW1/4.

CNR No. ­ DLST01­000481­2011 Page 11 of 59 Dinesh Kumar/ADJ­02/South/Saket/ND/18.05.2023 M/s Indiatech (A Partnership Firm) Th. Mr. Rajiv Kakkar (Partner) Vs. M/s Johnson Engineers Th. Sole Proprietor Mr. Christophar Pacheco

5. Copies of legal notice along with postal receipt which are Ex.PW1/5 and Ex.PW1/6 respectively.

6. During examination of PW1, the defendant had taken objection regarding the exhibition of the documents. On 09.10.2015, Ld. Counsel for the plaintiff made a request to the Court to permit the plaintiff to summon official witness from the office of the Registrar of Firms to prove the registration of the plaintiff firm. However, Ld. Counsel for the defendant submitted that he did not dispute the exhibition of the said document and therefore there was no need of summoning such a witness to prove the document. Inadvertently, in the order­sheet the exhibition number of the document is wrongly mentioned as Ex.PW1/6. The Correct exhibition number is Ex.PW1/1 (colly.) During his cross examination, PW1 also produced the purchase order dated 08.11.2008 issued by the defendant which is Ex.PW1/D1.

7. The plaintiff has also examined another witness i.e. Sh. Umesh Dhiman, accountant of the plaintiff firm, as PW2. He has tendered his evidence by way of affidavit as Ex. PW2/A. He would state that he has been managing the proper account, bill books and other records and accounts of CS DJ No. 7509/2016 CNR No. ­ DLST01­000481­2011 Page 12 of 59 Dinesh Kumar/ADJ­02/South/Saket/ND/18.05.2023 M/s Indiatech (A Partnership Firm) Th. Mr. Rajiv Kakkar (Partner) Vs. M/s Johnson Engineers Th. Sole Proprietor Mr. Christophar Pacheco the plaintiff firm. During the period w.e.f. May 2008 to December 2009, the defendant had placed various purchase orders on the plaintiff for supply of electrical panels at various places. The parties were maintaining open, current, running account and as per the statement of account of the plaintiff firm for the period 2008­2010, sum of Rs. 14,96,069/­ along with interest is due against the defendant. He has relied upon the statement of account which is Ex. PW2/1. Ld. Counsel for the defendant had taken objection for exhibition of this document. The Court vide order dated 07.04.2016 had decided that the objection of the defendant was without merits.

8. Both the witnesses were duly cross examined by Ld. Counsel for the defendant. The plaintiff did not examine any other witness. Hence, vide separate statement of the Ld. Counsel for the plaintiff, PE was closed vide order dated 07.04.2016. Thereafter, the matter was fixed for defendant evidence.

9. The defendant examined himself as DW1. He has tendered his evidence by way of affidavit as DW1/A. He has reiterated the facts stated in the written statement. He has relied upon the statement of account from 01.04.2008 to CS DJ No. 7509/2016 CNR No. ­ DLST01­000481­2011 Page 13 of 59 Dinesh Kumar/ADJ­02/South/Saket/ND/18.05.2023 M/s Indiatech (A Partnership Firm) Th. Mr. Rajiv Kakkar (Partner) Vs. M/s Johnson Engineers Th. Sole Proprietor Mr. Christophar Pacheco 31.03.2009 and from 01.04.2009 to 31.03.2012 which is Ex. DW1/1 (colly) and the certificate u/s 65B of Indian Evidence Act which is Ex. DW1/2.

10. The witness was cross examined by Ld. Counsel for the plaintiff. During his cross examination, DW1 admitted 3 invoices no. 113, 114 and 116 along with road permits etc. which were exhibited as Ex.DW1/X1 (colly). He also admitted the notice under Order XII Rule 8 CPC sent by the plaintiff which is Mark A. He also admitted the copy of the plaint of a suit filed by the defendant against Rockman Breweries which was also exhibited as Ex.DW1/X1 in his cross examination.

11. During final arguments, it was noticed that two documents were given same exhibit number i.e. DW1/X1 during cross examination of DW1. Therefore, on 11.05.2023, in the presence of both the counsels and after recording their statements, fresh exhibit mark was put on Invoice No. 113, 114 and 116 alongwith Form VAT D3 and they were exhibited as Ex.DW1/DX2 (Colly). It appears that inadvertently, in the statement of the counsels, the documents were mentioned as Ex. PW1/DX2 (Colly).

CNR No. ­ DLST01­000481­2011 Page 14 of 59 Dinesh Kumar/ADJ­02/South/Saket/ND/18.05.2023 M/s Indiatech (A Partnership Firm) Th. Mr. Rajiv Kakkar (Partner) Vs. M/s Johnson Engineers Th. Sole Proprietor Mr. Christophar Pacheco

12. The witness DW1 also wanted to file his ITR in cross examination. However, the Court did not allow him to do so. The defendant did not examine any other witness. Vide separate statement of the DW1, the DE was closed vide order dated 30.11.2018 and the matter was fixed for final arguments.

13. Ld. Counsel for the plaintiff would argue that the plaintiff has duly proved that it is a partnership firm. The copy of Form A and Form C of the register of Registrar of Firms have been proved as Ex. PW1/1 (Colly). The defendant has admitted making purchase orders to the plaintiff and receiving of the goods from the plaintiff. It is proved that there is a running current and mutual account between the parties. As per the statement of accounts, the defendant is liable to pay Rs. 10,99,681/­ to the plaintiff along with interest @ 18 % p.a. The plaintiff has proved its statement of accounts which is Ex. PW1/4 and Ex. PW2/1. The purchase orders issued by the defendant in the year 2009 have also been proved which are Ex. PW1/2 (Colly). The defendant has not made any payment of the due amount even after service of the legal notice Ex. PW1/5. The defendant has raised a false defence in the WS and false evidence has CS DJ No. 7509/2016 CNR No. ­ DLST01­000481­2011 Page 15 of 59 Dinesh Kumar/ADJ­02/South/Saket/ND/18.05.2023 M/s Indiatech (A Partnership Firm) Th. Mr. Rajiv Kakkar (Partner) Vs. M/s Johnson Engineers Th. Sole Proprietor Mr. Christophar Pacheco been led by the defendant. The statement of account filed by the defendant is a false document. The suit of the plaintiff is within limitation as it is related to the recovery of the amount in relation to the material supplied at various sites of the defendant in the year 2009 pursuant to the purchase orders issued in the year 2009 and it has got nothing to do with the material supplied in the year 2008. The material supplied by the plaintiff was duly used and installed by the defendant at his site and they were never rejected and returned by the defendant. The defendant has not stated that he had used some other materials on his site than the material of the plaintiff. PW2 examined by the plaintiff has duly proved the statement of accounts. The pucharse orders and invoices have been duly proved. The ledger account of the defendant contains a false entry of payment of Rs. 2,00,000/­ in cash to the plaintiff and an entry dated 12.05.2011 regarding rejection of the goods of the plaintiff. Therefore, the plaintiff has also filed an application under Section 340 Cr.P.C. which is pending in the Court. DW1 in his cross examination has admitted that no written notice was sent to the plaintiff informing that the goods were rejected which shows that a false defence has been taken.

CNR No. ­ DLST01­000481­2011 Page 16 of 59 Dinesh Kumar/ADJ­02/South/Saket/ND/18.05.2023 M/s Indiatech (A Partnership Firm) Th. Mr. Rajiv Kakkar (Partner) Vs. M/s Johnson Engineers Th. Sole Proprietor Mr. Christophar Pacheco Further as per Section 42 of the Sales of Goods Act, the goods are deemed to be accepted by the defendant. The defendant has failed to produce any receipt of Rs. 2,00,000/­ which is stated to be paid in cash to the plaintiff. DW1 in his cross examination has admitted that the material through invoices no. 90, 96, 120, 130, 144, 180 and 189 worth Rs. 10,99,681/­ were received by the defendant. Thus, the plaintiff has proved supply of the material to the defendant. The defendant was served with a notice under Order XII Rule 8 CPC by the plaintiff to produce the balance sheet and income tax returns. When a question to this effect was put to the DW1, he would answer that he was not sure whether he had received the said notice or not. The defendant has miserably failed to bring on record any material to substantiate his false defence. Hence, it is prayed that the suit of the plaintiff may be decreed.

14. Ld. Counsel for the defendant, on the other hand, would argue that the suit of the plaintiff is not maintainable and it is liable to be dismissed. It is stated that the plaintiff has not filed any authority letter or power of attorney from other partners of the plaintiff firm in favour of Mr. Rajeev Kakkar. It is also stated this Court does not have territorial CS DJ No. 7509/2016 CNR No. ­ DLST01­000481­2011 Page 17 of 59 Dinesh Kumar/ADJ­02/South/Saket/ND/18.05.2023 M/s Indiatech (A Partnership Firm) Th. Mr. Rajiv Kakkar (Partner) Vs. M/s Johnson Engineers Th. Sole Proprietor Mr. Christophar Pacheco jurisdiction as no cause of action has arisen within the territorial jurisdiction of this Court. The goods were manufactured at Faridabad and were delivered at Gurugaon. It is further stated that there was no mutual, current, running account between the parties and the payments were made on the basis of invoices. Further, the defendant had issued a purchase order Ex. PW1/D1. As per the purchase order, the delivery was to be made immediate and advance payment had to be made. However, neither the advance payment was made by the defendant nor the delivery was made immediately by the plaintiff. However, the plaintiff had dispatched the panels from Faridabad to Gurugaon at the site through 3 different tax invoices which are tax invoice no. 113 dated 09.12.2008 for a total sum of Rs. 2,79,537/­, tax invoice no. 114 dated 11.12.2008 for a total sum of Rs. 64,361/­ and tax invoice no. 116 dated 15.12.2008 for a total sum of Rs. 5,65,724/­. Form VAT D3 is only for the purpose of dispatch and it does not have any acknowledgment from the defendant. Even the said form is false and manipulated document as the date has been mentioned as 09.11.2008 while the tax invoice bears the date as 09.12.2008. The tax invoices of the above mentioned purchase order contains the CS DJ No. 7509/2016 CNR No. ­ DLST01­000481­2011 Page 18 of 59 Dinesh Kumar/ADJ­02/South/Saket/ND/18.05.2023 M/s Indiatech (A Partnership Firm) Th. Mr. Rajiv Kakkar (Partner) Vs. M/s Johnson Engineers Th. Sole Proprietor Mr. Christophar Pacheco VAT component. However, as the per the VAT law, the supplier ought to furnish the details specifying that the said tax invoices have been reported before the Tax Authorities. The plaintiff, however, has not furnished any evidence regarding submitting of the VAT. The plaintiff did not supply the goods as per schedule mentioned in the purchase order. The goods were supplied after delay. Therefore, they were not accepted by the client namely Rockman Beer Garden at Gurugaon on account of late delivery and the same led to delay in completion of works. The Rockman Beer Garden had refused to accept the panels and therefore, the plaintiff had not submitted the form / intimated the tax authorities about the said tax invoices. Due to delay in supply of the said material, the Rockman Beer Garden had refused to make the payment to the defendant and the defendant had suffered losses due to the said reason. Therefore, the defendant had to file a civil recovery suit against the Rockmen Breweries Limited.

15. It is further argued by the Ld. Counsel for the defendant that there are no mutual running current account between the parties. As per the ledger account filed by the plaintiff, the tax invoices were settled / paid concurrently.

CNR No. ­ DLST01­000481­2011 Page 19 of 59 Dinesh Kumar/ADJ­02/South/Saket/ND/18.05.2023 M/s Indiatech (A Partnership Firm) Th. Mr. Rajiv Kakkar (Partner) Vs. M/s Johnson Engineers Th. Sole Proprietor Mr. Christophar Pacheco The account was not mutual running and current account as per law. The PW1 in his cross examination has stated that except for the Rockman Beer Garden, all the payments have been made by the defendant. The tax invoices in respect of Rockman Beer Garden were prepared on 09.12.2008, 11.12.2008 and 15.12.2008 respectively whereas the present suit has been instituted on 20.12.2011. The statement of account filed by the plaintiff would show that the plaintiff had raised two invoices no. 120 dated 02.11.2009 and invoice no. 144 dated 27.11.2009. In tax invoice no. 144, the plaintiff has made wrong calculation at serial no. 2. The plaintiff has wrongly charged Rs. 9,948/­ more in the said invoice. The defendant had made payments of the invoices raised by the plaintiff concurrently and therefore, there was no mutual, current, and running accoutn between the parties. The plaintiff had raised invoice no. 90 for Rs. 3,06,752/­ on 09.09.2009. The said payment was made by the defendant in two installments of Rs. 1,00,000/­, and Rs. 2,06,752/­ on 04.09.2009 and 29.09.2009. Similarly, the plaintiff raised invoices no. 96 and 120 for a total sum of Rs. 3,20,983/­. The defendant made payment for those invoices in two installments on 04.11.2009 and 25.11.2009. Further, the CS DJ No. 7509/2016 CNR No. ­ DLST01­000481­2011 Page 20 of 59 Dinesh Kumar/ADJ­02/South/Saket/ND/18.05.2023 M/s Indiatech (A Partnership Firm) Th. Mr. Rajiv Kakkar (Partner) Vs. M/s Johnson Engineers Th. Sole Proprietor Mr. Christophar Pacheco plaintiff raised four invoices no. 144, 180, 188 and 189 for total sum of Rs. 2,97,628/­ which was paid by the defendant on 09.03.2010. The defendant made payment of Rs. 3,00,000/­ to the plaintiff on 08.04.2009 and he received the goods vide invoice no. 130 on 13.11.2009. Thus, the tax invoices were settled / paid concurrently. There was no mutual, open, running and current account and therefore, article 1 is not applicable in the present case as held by Hon'ble Supreme Court of India in Kesarichand Jaisukhlal Vs. Shillong Bank Corporation Ltd. AIR 1965 SC 1711, and Hon'ble High Court of Delhi in case titled Manish Garg Vs. East India Udyog Ltd. 2001 III AD DELHI 493. Hence, it is argued by Ld. Counsel that the claim of the plaintiff is barred by limitation as it is beyond 3 years from the date of last tax invoice. Once the PW1 in his evidence had admitted the fact during his cross examination that plaintiff had received all the payments from the defendant except for the Rockman Beer Garden, there was no necessity to cross examine the PW1 regarding the payment of Rs. 2,00,000/­ made in cash. Furter, that the plaintiff had wrongly demanded / charged Rs. 9948/­ in tax invoice no. 114 dated 27.11.2009 for a total sum of Rs. 91,626/­ and CS DJ No. 7509/2016 CNR No. ­ DLST01­000481­2011 Page 21 of 59 Dinesh Kumar/ADJ­02/South/Saket/ND/18.05.2023 M/s Indiatech (A Partnership Firm) Th. Mr. Rajiv Kakkar (Partner) Vs. M/s Johnson Engineers Th. Sole Proprietor Mr. Christophar Pacheco therefore, the defendant adjusted the excess payment. Further, the plaintiff had issued notice under Order XII Rule 8 CPC dated 28.04.2016 to the defendant asking to produce book of accounts / ledger books and income tax returns along with balance sheets with the Income Tax Department for the financial year 2008 - 2009, 2009 - 2010, 2010­ 2011 and 2011­ 2012. Thereafter, during the cross examination of DW1, the defendant was directed to bring all the relevant record pertaining to the suit and therefore, the defendant had brought the income tax returns on the next date i.e. on 30.11.2018. The Court had allowed the defendant to file the said income tax returns. Nothing is due and payable by the defendant to the plaintiff. The claim of the plaintiff is false and barred by limitation. Hence, it is prayed that the suit may be dismissed.

16. I have heard the submissions and carefully perused the entire material on record carefully. My issue wise findings are as under:

17. Issue No. 4:­ This issue is taken first as this issue is related to the maintainability of the suit. The issue reads as under:­ CS DJ No. 7509/2016 CNR No. ­ DLST01­000481­2011 Page 22 of 59 Dinesh Kumar/ADJ­02/South/Saket/ND/18.05.2023 M/s Indiatech (A Partnership Firm) Th. Mr. Rajiv Kakkar (Partner) Vs. M/s Johnson Engineers Th. Sole Proprietor Mr. Christophar Pacheco "4. Whether the plaint has not been signed, verified or filed by a properly authorized person as claimed in the written statement? OPD"

18. It is claimed by the defendant in the Written statement that Mr. Rajiv Kakkar is not authorised to sign and verify the plaint and to file the present suit as he has not been authorised by the other partners of the firm.

19. The present suit has been filed by the plaintiff which is stated to be a registered partnership firm. The plaintiff has brought on record the registration certificate i.e. Form A and C of the firm issued by Registrar of Firms. Those documents have been proved as per law. Perusal of the record would show that the plaintiff has filed the Certificate of Registration of plaintiff firm which is Ex.PW1/1 (colly). During examination of PW1, the defendant had taken objection regarding the exhibition of those documents. On 09.10.2015, Ld. Counsel for the plaintiff made a request to the Court to permit him to summon official witness from the office of the Registrar of Firms to prove the registration of the plaintiff firm. However, Ld. Counsel for the defendant submitted that he did not dispute the exhibition of the said document and therefore there was no need of summoning such a witness to CS DJ No. 7509/2016 CNR No. ­ DLST01­000481­2011 Page 23 of 59 Dinesh Kumar/ADJ­02/South/Saket/ND/18.05.2023 M/s Indiatech (A Partnership Firm) Th. Mr. Rajiv Kakkar (Partner) Vs. M/s Johnson Engineers Th. Sole Proprietor Mr. Christophar Pacheco prove the document. Thus, document Ex.PW1/1 (colly.) has been duly proved which shows that the plaintiff is a registered firm. The plaint has been signed and verified by Mr. Rajeev Kakkar which is shown to be one of the partner of the plaintiff firm as mentioned in Form A filed by the plaintiff which is part of Ex. PW1/A (Colly). It is proved that the plaintiff is a registered partnership firm and Mr. Rajeev Kakkar is one of the partner of the firm. In order to appreciate whether the suit has been filed by a duly authorised person or not, it would be relevant to discuss the relevant provisions of law under Section 2(a), 4, 18, 19, and 22 of the Indian Partnership Act, 1932 and also Order III Rule 1 and Order XXX Rule 1 of the CPC.

20. The relevant Sections of the Partnership Act reads as under:

"2(a) In the Act, unless there is anything repugnant in the subject or context, an "act of a firm" means any act or omission by all the partners, or by any partner or agent of the firm which gives rise to a right enforceable by or against the firm;

"xxx "4. "Partnership" is the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all persons who have entered into partnership with one another are called individually, "partners" and collectively "a firm", and the CS DJ No. 7509/2016 CNR No. ­ DLST01­000481­2011 Page 24 of 59 Dinesh Kumar/ADJ­02/South/Saket/ND/18.05.2023 M/s Indiatech (A Partnership Firm) Th. Mr. Rajiv Kakkar (Partner) Vs. M/s Johnson Engineers Th. Sole Proprietor Mr. Christophar Pacheco name under which their business is carried on is called the "firm­name".

"xxx "18. Subject to the provisions of this Act, a partner is the agent of the firm for the purposes of the business of the firm.

"19. Implied authority of partner as agent of the firm­ (1) Subject to the provisions of Section 22, the act of a partner which is done to carry on, in the usual way, business of the kind carried on by the firm, binds the firm. The authority of a partner to bind the firm conferred by this section is called his "implied authority". (2) In the absence of any usage or custom of trade to the contrary, the implied authority of a partner does not empower him to ­ "(a) submit a dispute relating to the business of the firm to arbitration, "(b) open a banking account on behalf of the firm in his own name, "(c) compromise or relinquish any claim or portion of a claim by the firm, "(d) withdraw a suit or proceeding filed on behalf of the firm, "(e) admit any liability in a suit or proceeding against the firm, "(f) acquire immovable property on behalf of the firm, "(g) transfer immovable property belonging to the firm, or (h) enter into partnership on behalf of the firm.

"xxx "22. Mode of doing act to bind firm­ In order to bind a firm, an act or instrument done or executed by a partner or other person on behalf of the firm shall be done or executed in the firm­name, or in any other manner expressing or implying an intention to bind the firm."

21. The relevant provisions of law under the Code of Civil Procedure, 1908 reads as under:

CNR No. ­ DLST01­000481­2011 Page 25 of 59 Dinesh Kumar/ADJ­02/South/Saket/ND/18.05.2023 M/s Indiatech (A Partnership Firm) Th. Mr. Rajiv Kakkar (Partner) Vs. M/s Johnson Engineers Th. Sole Proprietor Mr. Christophar Pacheco "Order III Rule 1. Appearances, etc., may be in person, by recognized agent or by pleader.­­ Any appearance, application or act in or to any Court, required or authorized by law to be made or done by a party in such Court, may, except where otherwise expressly provided by any law for the time being in force, be made or done by the party in person, or by his recognized agent, or by a pleader appearing, applying or acting, as the case may be, on his behalf :

"Provided that any such appearance shall, if the Court so directs, be made by the party in person.

"xxx "Order XXX Rule 1­ Suing of partners in name of firm.­­ (1) Any two or more persons claiming or being liable as partners and carrying on business in India may sue or be sued in the name of the firm (if any) of which such persons were partners at the time of the accruing of the cause of action, and any party to a suit may in such case apply to the Court for a statement of the names and addresses of the persons who were, at the time of the accruing of the cause of action, partners in such firm, to be furnished and verified in such manner as the Court may direct. "(2) Where persons sue or are sued partners in the name of their firm under sub­rule (1), it shall, in the case of any pleading or other document required by or under this Code to be signed, verified or certified by the plaintiff or the defendant, suffice if such pleading or other document is signed, verified or certified by any one of such persons...."

22. Thus, Section 4 of the Indian Partnership Act defines 'partnership'. One of the essential features of a partnership is that there must be mutual agency agreement between the partners and it must be carried on by all or any of the partners acting for all. A partner is an agent of the other partners and also the firm. Further, it is a creature of CS DJ No. 7509/2016 CNR No. ­ DLST01­000481­2011 Page 26 of 59 Dinesh Kumar/ADJ­02/South/Saket/ND/18.05.2023 M/s Indiatech (A Partnership Firm) Th. Mr. Rajiv Kakkar (Partner) Vs. M/s Johnson Engineers Th. Sole Proprietor Mr. Christophar Pacheco contract between the partners. The rights and liabilities of the parties to a partnership are enforceable by and against them individually. Each partner is the agent of the firm and binds the firm by all his acts done on behalf of and within the scope of business of the firm. The partner can be sued individually and also in the name of the partnership. These are the essentials of the partnership. Persons who have entered into partnership with one another are called individually, "partners" and collectively "a firm", and the name under which their business is carried on is called the "firm­name". Order III Rule (1) CPC vividly postulates and envisages that an act in or to any Court, required or authorized by law to be made or done by a party in such Court, may, except where otherwise expressly provided by any law for the time being in force, be made or done by the party in person, or by his recognized agent. In terms of the said provision, the "authorized agent" cannot act on behalf of the partnership firm, if there is express bar to act on behalf of the partnership firm and if there is no bar, then "authorized agent" can act on behalf of the partnership firm. Section 2(a) of the Indian Partnership Act, 1932 expressly authorizes the "authorized agent" to act on behalf of the CS DJ No. 7509/2016 CNR No. ­ DLST01­000481­2011 Page 27 of 59 Dinesh Kumar/ADJ­02/South/Saket/ND/18.05.2023 M/s Indiatech (A Partnership Firm) Th. Mr. Rajiv Kakkar (Partner) Vs. M/s Johnson Engineers Th. Sole Proprietor Mr. Christophar Pacheco Partners. I get strength from the judgment passed by the Hon'ble Supreme Court in Purushottam Umedbhai & Co Vs. M/s. Manilal And Sons wherein one of the partner of a registered firm had issued power of attorney in favour of a person and the said power of attorney was not signed by all the partners of the firm. Hon'ble Suprme Court has held that no doubt the Power of Attorney was not signed by all the partners of Manilal & Sons but only by Manubhai Maganbhai Amin, it was not necessary that the Power should have been signed by all the partners of the firm because Manubhai Maganbhai Amin was the manager of the firm. Under S. 18 of the Act a partner is an agent of the firm for the purposes of the business of the firm. Manubhai Maganbhai Amin was therefore the agent of the firm. It was also held that under S. 19(2) of the Act instances are stated where, in the absence of any usage or custom of trade to the contrary, the implied authority of a partner does not empower him to do matters mentioned in clauses (a) to (h). It is significant that in these clauses there is no prohibition to a partner executing a Power of Attorney in favour of an individual authorizing him to institute a suit on behalf of the firm. In the present case, Mr. Rajiv Kakkar, the partner CS DJ No. 7509/2016 CNR No. ­ DLST01­000481­2011 Page 28 of 59 Dinesh Kumar/ADJ­02/South/Saket/ND/18.05.2023 M/s Indiatech (A Partnership Firm) Th. Mr. Rajiv Kakkar (Partner) Vs. M/s Johnson Engineers Th. Sole Proprietor Mr. Christophar Pacheco himself has brought the suit against the defendant. He being the partner of the firm is also an agent of the firm and he is entitled to bring a suit on behalf of the partnership firm without any authority letter from the other partner/s.

23. In the light of the discussion hereinabove, I am of the considered opinion that the plaint has been signed and verified by duly authorized person as Mr. Rajiv Kakkar being the partner of the plaintiff firm is authorized to file the suit and to verify the plaint. The issue is accordingly decided against the defendant.

24. Issue No. 3 : This issue reads as under :

"3. Whether the suit is barred by limitation? OPD

25. The onus to prove this issued was on the defendant. The defendant has claimed that there was no mutual running current account between the parties and that the payment was made invoice to invoice basis. Further, the entire payment was made to the plaintiff and the issue was related to the purchase order dated 08.11.2008 pursuant to which certain goods were supplied by the plaintiff to one of his sites at Rockman Beer Garden. The said tax invoices were dated 09.12.2008, 11.12.2008 and 15.12.2008 while the suit CS DJ No. 7509/2016 CNR No. ­ DLST01­000481­2011 Page 29 of 59 Dinesh Kumar/ADJ­02/South/Saket/ND/18.05.2023 M/s Indiatech (A Partnership Firm) Th. Mr. Rajiv Kakkar (Partner) Vs. M/s Johnson Engineers Th. Sole Proprietor Mr. Christophar Pacheco has been filed after expiry of 3 years from the date of even the last tax invoice mentioned herein­above. The plaintiff, on the other hand, has averred that the suit is within limitation as there was a running mutual current account between the parties. The last invoice no. 189 dated 12.01.2010 for Rs. 23,640/­ was raised by the plaintiff in pursuant to the purchase order placed by the defendant. Hence, the suit is within limitation.

26. I have considered the submissions. The plaintiff has been relying upon the Article 1 of the Schedule of the Limitation Act, 1968, which provides that for the balance due on a mutual, open and current account, where there have been reciprocal demands between the parties, the limitation period is three years from the close of the year in which the last item admitted or proved is entered in the account and such year is to be computed as in the account. If the statement of account between the parties is to be regarded as a mutual, open and current account, then the period of limitation of three years would begin from the close of the year in which the last item admitted or proved is entered in the account. In the present case it has to be decided as to what was the nature of the account between the parties. An CS DJ No. 7509/2016 CNR No. ­ DLST01­000481­2011 Page 30 of 59 Dinesh Kumar/ADJ­02/South/Saket/ND/18.05.2023 M/s Indiatech (A Partnership Firm) Th. Mr. Rajiv Kakkar (Partner) Vs. M/s Johnson Engineers Th. Sole Proprietor Mr. Christophar Pacheco account might be open and current, but it has also to be mutual to take the benefit of Article 1 of the Schedule to the Limitation Act.

27. Such an issue had arisen before the Hon'ble High Court of Delhi in Era Constructions (India) Limited vs Mr. D.K. Sharma, MANU/DE 8653/2007. The facts of the said case were that the claimant filed a claim of Rs. 20,56,833/­ before the Arbitrator. The respondent was involved in the business of providing security services to industrial / business houses through his security guards. The claimant had taken the security services in respect of its different sites located in different States. An agreement had been entered into on 23.08.1995 between the parties for providing such security arrangements. As per the claimant, during the course of the agreement, a running account was maintained between the parties. The respondent used to raise bills on the petitioner and the petitioner on the other hand used to make payments. Hon'ble High Court held that there was no mutual account between the parties. It has held as under:

"5. Blacks Law Dictionary, 6th Edition, defines a running account in the following manner:

"Running account. An open unsettled account, as CS DJ No. 7509/2016 CNR No. ­ DLST01­000481­2011 Page 31 of 59 Dinesh Kumar/ADJ­02/South/Saket/ND/18.05.2023 M/s Indiatech (A Partnership Firm) Th. Mr. Rajiv Kakkar (Partner) Vs. M/s Johnson Engineers Th. Sole Proprietor Mr. Christophar Pacheco distinguished from a stated and liquidated account. Running accounts mean mutual accounts and reciprocal demands between the parties, which accounts and demands remain open and unsettled.

"In other words, a running account is one which is unsettled and is open. It is distinct and different from a stated and/or liquidated account where the amount stands crystalised. In this context, it would be fruitful to refer to Article 1 and Article 26 of the Schedule to the Limitation Act, 1963. Article 1 relates to suits in respect of balance due on a mutual open and current account, where there have been reciprocal demands between the parties. The period of limitation prescribed is three years from the close of the year in which the last item admitted or proved is entered in the account and such year is to be computed as in the account. If the statement of account between the parties is to be regarded as a mutual open and current account, then the period of limitation of three years would begin from the close of the year in which the last item admitted or proved is entered in the account. It was contended on behalf of the claimant that the last admitted item in the account between the parties was the payment made by the petitioner to the respondent on 03.04.1999 and, therefore, the start of the period would be the close of the year in which this payment was made. He submitted that the financial year ending of 31st March was taken as the accounting year and, therefore, in point of fact, the period of limitation would begin not from 03.04.1999, but from 31.03.2000 which is the close of the year in which the last payment (i.e., on 03.04.1999) was made. This would be the position if Article 1 of the Schedule to the Limitation Act, 1963 were to apply.

"6. Article 26 of the said Schedule refers to suits for money payable to the plaintiff for money found to be due from the defendant to the plaintiff on accounts stated between them. The period of limitation that is prescribed under this Article is of three years and the time from which it begins to run is when the accounts are stated in writing signed by the defendant or his agent duly authorised in this CS DJ No. 7509/2016 CNR No. ­ DLST01­000481­2011 Page 32 of 59 Dinesh Kumar/ADJ­02/South/Saket/ND/18.05.2023 M/s Indiatech (A Partnership Firm) Th. Mr. Rajiv Kakkar (Partner) Vs. M/s Johnson Engineers Th. Sole Proprietor Mr. Christophar Pacheco behalf, unless where the debt is, by a simultaneous agreement in writing signed as aforesaid, made payable at a future time, when that time arrives. This is certainly not the case here.

"7. Therefore, it needs to be determined as to whether Article 1 of the Schedule to the Limitation Act, 1963 would be applicable in the present case. As already indicated above, the accounts maintained by the petitioner and the respondent were not settled and there were debit and credit entries throughout the period of transactions and ending with the last transaction of 03.04.1999 which was a payment made by the petitioner to the respondent. As already indicated above there is no evidence whatsoever that the accounts had been stated between the parties and much less in the form required under Article 26 of the Limitation Act, 1963. That being the position, I am of the view that the learned Arbitrator was correct in holding that the parties maintained a running account. But, merely because there was a running, open or current account in respect of transactions between the parties does not mean that Article 1 of the Limitation Act, 1963 would apply. This is where the learned Arbitrator has gone wrong. He observed as under:

"xxx "What the learned Arbitrator failed to consider was that for Article 1 of the Schedule to the Limitation Act, 1963 to apply, it was necessary to establish that the account was not only open and current but also mutual where there have been reciprocal demands between the parties. This aspect of the matter has clearly escaped the attention of the learned Arbitrator. Article 1 of the Schedule to the Limitation Act, 1963 falls in Part­I which pertains to suits relating to accounts. The said Article reads as under: "xxx "8. As already pointed out above, there is no difficulty in concluding that the account between the parties in the present case was open and current and had not been settled or stated. The only question that needs to be CS DJ No. 7509/2016 CNR No. ­ DLST01­000481­2011 Page 33 of 59 Dinesh Kumar/ADJ­02/South/Saket/ND/18.05.2023 M/s Indiatech (A Partnership Firm) Th. Mr. Rajiv Kakkar (Partner) Vs. M/s Johnson Engineers Th. Sole Proprietor Mr. Christophar Pacheco considered is whether the account could be construed as a mutual account where there have been reciprocal demands between the parties. As observed by the Supreme Court in the case of Kesharichand Jaisukhlal v. Shillong Banking Corporation Ltd., the leading case on mutual accounts is that of Hirada Basappa v. Gadigi Muddappa (1871) VI Madras High Court Reports 142, 144 wherein it was observed as under:

"To be mutual there must be transactions on each side creating independent obligations on the other, and not merely transactions which create obligations on the one side, those on the other being merely complete or partial discharges of such obligations.

"In The Hindustan Forest Co. v. Lal Chand and Ors. , the Supreme Court observed that the question of what is a mutual account had been considered by the courts frequently and the test to determine the same was well settled. In this context, the Supreme Court referred to the case of Tea Financing Syndicate Ltd. v. Chandrakamal Bezbaruah (1930) 2nd 58 Calcutta 649. In the said Calcutta decision the following test had been laid down: "There can, I think, be no doubt that the requirement of reciprocal demands involves, as all the Indian cases have decided following Halloway, A.C.J., transactions on each side creating independent obligations on the other and not merely transactions which create obligations on one side, those on the other being merely complete or partial discharges of such obligations. It is further clear that goods as well as money may be sent by way of payment. We have therefore to see whether under the deed the tea, sent by the defendant to the plaintiff for sale, was sent merely by way of discharge of the defendant's debt or whether it was sent in the course of dealings designed to create a credit to the defendant as the owner of the tea sold, which credit when brought into the account would operate by way of set­off to reduce the defendant's liability.? The Supreme Court after quoting the aforesaid observations made in the Calcutta decision, noted that the CS DJ No. 7509/2016 CNR No. ­ DLST01­000481­2011 Page 34 of 59 Dinesh Kumar/ADJ­02/South/Saket/ND/18.05.2023 M/s Indiatech (A Partnership Firm) Th. Mr. Rajiv Kakkar (Partner) Vs. M/s Johnson Engineers Th. Sole Proprietor Mr. Christophar Pacheco same has never been dissented from and that it lays down the law correctly. In Kesharichand Jaisukhlal (supra), a decision which follows the earlier decision in the case of The Hindustan Forest Company (supra), the Supreme Court while considering the transactions in the case before it held as under:

"In the instant case, there were mutual dealings between the parties. The respondent Bank gave loans on overdrafts, and the appellant made deposits. The loans by the respondent created obligations on the appellant to repay them. The respondent was under independent obligations to repay the amount of the cash deposits and to account for the cheques, hundis and drafts deposited for collection. There were thus transactions on each side creating independent obligations on the other, and both sets of transactions were entered in the same account. The deposits made by the appellant were not merely complete or partial discharges of its obligations to the respondent. There were shifting balances; on many occasions the balance was in favor of the appellant and on many other occasions, the balance was in favor of the respondent. There were reciprocal demands between the parties, and the account was mutual. This mutual account was fairly active up to June 25, 1947. It is not shown that the account ceased to be mutual thereafter. The parties contemplated the possibility of mutual dealings in future. The mutual account continued until December 29, 1950 when the last entry in the account was made. It is conceded on behalf of the appellant that if the account was mutual and continued to be so until December 29, 1950, the suit is not barred by limitation, having regard to Section 45(O) of the Banking Companies Act. The Courts below, therefore, rightly answered issue No. 1 in the negative.

"A Division Bench of this Court in the case of Manish Garg v. East India Udyog Ltd. 2001 III AD (Delhi) 493, after examining the aforesaid two decisions of the Supreme Court, held as under:

"8. Thus for an account properly to be called Mutual CS DJ No. 7509/2016 CNR No. ­ DLST01­000481­2011 Page 35 of 59 Dinesh Kumar/ADJ­02/South/Saket/ND/18.05.2023 M/s Indiatech (A Partnership Firm) Th. Mr. Rajiv Kakkar (Partner) Vs. M/s Johnson Engineers Th. Sole Proprietor Mr. Christophar Pacheco Account there must be mutual dealing in the sense that both the parties come under liability under each other. In this case, this ingredient is not satisfied. It was simply a case of debtor and creditor only and not a case of mutual obligations which will in the ordinary way result in enforceable liabilities on each side. Mutual Account is when each has a demand or right of action against the other.

"9. On an examination of the well settled law on the subject, it is clear that for an account to be nominated as mutual, there must be transactions on each side creating independent obligations. The nature of such an account has been aptly demonstrated in the case of Kesharichand Jaisukhlal (supra) where the deposits made by one party were not merely complete or partial discharges of such obligations towards the other party but there were shifting balances. On many occasions the balance was in favor of one party and on many other occasions, the balance was in favor of other party. There were reciprocal demands between the parties and, therefore, the account was held to be mutual. In the present case, as has been pointed out above, the statement of account reveals that the bills had been raised from time to time by the respondent on the petitioner. As against these bills, the petitioner had been making payments to the respondent from time to time. Though there was no one­to­one correspondence between the payments made and the bills raised, the amounts that represented payments have been shown on the debit side of the account and the amounts received from the petitioner were shown on the credit side. The said statement of account demonstrates that the payments made by the petitioner to the respondent were merely in discharge of its obligation to the respondent. There were no reciprocal demands between the parties. It was only that bills continued to be raised by the respondent from time to time and the petitioner continued to make payments in discharge of its obligation to pay the amounts reflected in the bills. The account that was maintained between the CS DJ No. 7509/2016 CNR No. ­ DLST01­000481­2011 Page 36 of 59 Dinesh Kumar/ADJ­02/South/Saket/ND/18.05.2023 M/s Indiatech (A Partnership Firm) Th. Mr. Rajiv Kakkar (Partner) Vs. M/s Johnson Engineers Th. Sole Proprietor Mr. Christophar Pacheco parties cannot, therefore, be construed to be a mutual account. Consequently, Article 1 of the Schedule to the Limitation Act, 1963 would not apply and, therefore, the benefit of that provision cannot be availed of by the respondent (claimant) for saving part of the claim from being barred by limitation. In the Award itself it is noted that the contract between the parties was essentially one for payment of wages in respect of the security personnel provided by the respondent to the petitioner. The specific period of limitation provided in respect of such contracts is indicated in Article 7 of the Limitation Act, 1963 and it is three years from when the wages accrue due...."(emphasis supplied).

28. Finally, Hon'ble High Court has held that the contract between the parties was essentially one for payment of wages in respect of the security personnel provided by the respondent to the petitioner. The specific period of limitation provided in respect of such contracts is indicated in Article 7 of the Limitation Act, 1963 and it is three years from when the wages accrue due. Even though the facts of the said case are not similar to the facts of the present case, the judgment for discussion on the law related to mutual, current, running account discussed in the said case is important for the decision in the present case. The judgments relied upon by the Ld. Counsel for the defendant are also important on the aspect as to what are the conditions which are required to be fulfilled to hold an account as mutual, current, running and open account.

CNR No. ­ DLST01­000481­2011 Page 37 of 59 Dinesh Kumar/ADJ­02/South/Saket/ND/18.05.2023 M/s Indiatech (A Partnership Firm) Th. Mr. Rajiv Kakkar (Partner) Vs. M/s Johnson Engineers Th. Sole Proprietor Mr. Christophar Pacheco

29. In the present case also, it is on record that the defendant used to place orders for supply of goods. The plaintiff used to supply the material as per purchase orders. There were no reciprocal demands between the parties. Therefore, there was no mutual account between the parties. Hence, the claim of the plaintiff does not fall under Article 1 of the Schedule to the Limitation Act.

30. Ld. Counsel for the defendant has not argued as to under which article of the Schedule to the Limitation Act, the claim of the plaintiff would fall. However, it can be inferred from the arguments and the material on record that the defendant is relying upon Article 14 of the Schedule to the Limitation Act. Article 14 of the Schedule to the Limitation Act, 1963 provides period of three years for the price of goods sold and delivered when no fixed period of the credit is agreed upon. The time starts running from the date of delivery of goods. However, the said article is also not applicable in the present case. I get strength from the judgment passed by the Division Bench of the Hon'ble High Court of Delhi in Bharath Skins Corporation Vs. Taneja Skins Company Pvt. Ltd.:MANU/DE/7351/2011 in which the facts were similar to the present case. The claim of the CS DJ No. 7509/2016 CNR No. ­ DLST01­000481­2011 Page 38 of 59 Dinesh Kumar/ADJ­02/South/Saket/ND/18.05.2023 M/s Indiatech (A Partnership Firm) Th. Mr. Rajiv Kakkar (Partner) Vs. M/s Johnson Engineers Th. Sole Proprietor Mr. Christophar Pacheco plaintiff in the said matter was that starting from 11.08.1978, hides were sold under 56 bills by the plaintiff to the defendant. As and when goods were supplied, a bill was raised for the value of the goods supplied and correspondingly a debit entry was made in the account of the appellant and as and when payment was received, the same was credited by making a credit entry in the account. Suit was filed for recovery of the balance amount. In the written statement, plea was taken that goods being supplied on credit, limitation would run for each supply and that the account between the parties was not a mutual account. Hon'ble High Court after discussing the law relating to the mutual account as mentioned hereinabove, held that since the dealings between the parties disclosed a single contractual relationship i.e. of buyer and seller between them, the account between them could not be termed as a 'mutual' account. As a necessary corollary, Article 1 of the Schedule to the Limitation Act, 1963 was held to be had no application in the said case. After discussing various judgments including Kesharichand Jaisukhlal v The Shillong Banking Corporation AIR 1965 SC 1711, Hirada Basappa v. Gadigi Muddappa [[1871] VI Madras CS DJ No. 7509/2016 CNR No. ­ DLST01­000481­2011 Page 39 of 59 Dinesh Kumar/ADJ­02/South/Saket/ND/18.05.2023 M/s Indiatech (A Partnership Firm) Th. Mr. Rajiv Kakkar (Partner) Vs. M/s Johnson Engineers Th. Sole Proprietor Mr. Christophar Pacheco High Court Reports. 142, 144], Tea Financing Syndicate Ltd. v. Chandrakamal Bezbaruah I. L.R[1931] 58 Cal. 642 and Monotosh K. Chatterjee v. Central Calcutta Bank Ltd. [1953] 91 C.L.J. 16, it has observed as under:

"13. From the aforesaid observations, it can be deduced that for the creation of an open, current and mutual account, there must be an intention between the parties, either express or implied, which may be deducible from the course of dealings to have mutual dealings, creating reciprocal obligations, independent of each other. A demand in relation to a matter of account means a claim for money arising out of a contractual business relationship between the parties. Where the dealings between the parties disclose a single contractual relationship, there will be demands only in favor of one party. For instance, where the relationship between A and B is that of lender and borrower respectively, A will have a demand against B in respect of every item of loan advanced. But B can have no demand against A. Where the dealings between the parties disclose two contractual relationships, there will arise demands in favor of each side against the other. For instance, where A advances money to B from time to time as loan, and B engages A as his agent for the sale of goods sent by B, there are two contractual relationships between the parties: one, that of lender and borrower and the other, that of principal and agent. A as creditor may have several demands against B who as principal may have, independently, several demands against A. The real test, therefore, to see whether there have been reciprocal demands in any particular case is to see: Whether there is a dual contractual relationship between the parties. "14. Where A sells goods to B from time to time and B makes payments towards the price from time to time, there is only a single contractual relationship, namely that of buyer and seller, between the parties. A has demands against B for items sold, but B can have no demands against A. Such case CS DJ No. 7509/2016 CNR No. ­ DLST01­000481­2011 Page 40 of 59 Dinesh Kumar/ADJ­02/South/Saket/ND/18.05.2023 M/s Indiatech (A Partnership Firm) Th. Mr. Rajiv Kakkar (Partner) Vs. M/s Johnson Engineers Th. Sole Proprietor Mr. Christophar Pacheco is not one of reciprocal demands and thus Article 85 of the Schedule to the Indian Limitation Act, 1908 corresponding to Article 1 of the Schedule to the Limitation Act, 1963 will not apply to suits on such accounts. We are fortified in our view by the following observations made by the Supreme Court in the decision reported as AIR 1959 SC 1349 Hindustan Forest Company v Lal Chand:­ "The learned Judge of the High Court who learned the suit held that art. 115 had no application and dismissed the suit as barred by limitation. The sellers went up in appeal which was heard by two other learned Judges of the High Court. The learned Judges of the appellate bench of the High Court held that art. 115 of the Jammu & Kashmir Limitation Act applied and the suit was not barred. They thereupon allowed the appeal and passed a decree in favour of the sellers. The buyer has now come up in appeal to this Court.

"5. Article 115 of the Jammu and Kashmir Limitation Act which is in the same terms as art. 85 of the Indian Limitation Act except as to the period of limitation, is set out below:

"xxx "6. If the article applied the suit would be clearly within time as the last item found to have been entered in the account was on June 23, 1947. The only question argued at the bar is whether the account between the parties was mutual.

"7. The question what is a mutual account, has been considered by the courts frequently and the test to determine it is well settled. The case of the Tea Financing Syndicate Ltd. v. Chandrakamal Bezbaruah I.L.R (1930) Cal. 649, may be referred to. There a company had been advancing monies by way of loans to the proprietor of a tea estate and the proprietor had been sending tea to the company for sale and realisation of the price. In a suit brought by the company against the proprietor of the tea estate for recovery of the balance of the advances made after giving credit for the price realised from the sale of CS DJ No. 7509/2016 CNR No. ­ DLST01­000481­2011 Page 41 of 59 Dinesh Kumar/ADJ­02/South/Saket/ND/18.05.2023 M/s Indiatech (A Partnership Firm) Th. Mr. Rajiv Kakkar (Partner) Vs. M/s Johnson Engineers Th. Sole Proprietor Mr. Christophar Pacheco tea, the question arose as to whether the case was one of reciprocal demands resulting in the account between the parties being mutual so as to be governed by art. 85 of the Indian Limitation Act. Rankin, C.J., laid down at p. 668 the test to be applied for deciding the question in these words : "There can, I think, be no doubt that the requirement of reciprocal demands involves, as all the Indian cases have decided following Halloway, A.C.J., transactions on each side creating independent obligations on the other and not merely transactions which create obligations on one side, those on the other being merely complete or partial discharges of such obligations. It is further clear that goods as well as money may be sent by way of payment. We have therefore to see whether under the deed the tea, sent by the defendant to the plaintiff for sale, was sent merely by way of discharge of the defendant's debt or whether it was sent in the course of dealings designed to create a credit to the defendant as the owner of the tea sold, which credit when brought into the account would operate by way of set­off to reduce the defendant's liability."

"8. The observation of Rankin, C.J., has never been dissented from in our courts and we think it lays down the law correctly. The learned Judges of the appellate bench of the High Court also appear to have applied the same test as that laid down by Rankin, C.J. They however came to the conclusion that the account between the parties was mutual for the following reasons :

"The point then reduces itself to the fact that the defendant company had advanced a certain amounts of money to the plaintiffs for the supply of grains. This excludes the question of monthly payments being made to the plaintiffs. The plaintiffs having received a certain amount of money, they became debtors to the defendant company to this extent, and when the supplies exceeded Rs. 13,000 the defendant company became debtors to the plaintiff and later on when again the plaintiff's supplies exceeded the amount paid to them, the defendants again became the debtors. This would show that there were reciprocity of CS DJ No. 7509/2016 CNR No. ­ DLST01­000481­2011 Page 42 of 59 Dinesh Kumar/ADJ­02/South/Saket/ND/18.05.2023 M/s Indiatech (A Partnership Firm) Th. Mr. Rajiv Kakkar (Partner) Vs. M/s Johnson Engineers Th. Sole Proprietor Mr. Christophar Pacheco dealings and transactions on each side creating independent obligations on the other."

"9. The reasoning is clearly erroneous. On the facts stated by the learned Judges there was no reciprocity of dealings; there were no independent obligations. What in fact had happened was that the sellers had undertaken to make delivery of goods and the buyer had agreed to pay for them and had in part made the payment in advance. There can be no question that in so far as the payments had been made after the goods had been delivered, they had been made towards the price due. Such payments were in discharge of the obligation created in the buyer by the deliveries made to it to pay the price of the goods delivered and did not create any obligation on the sellers in favour of the buyer. The learned Judges do not appear to have taken a contrary view of the result of these payments. "10. The learned Judges however held that the payment of Rs. 13,000 by the buyer in advance before delivery had started, made the sellers the debtor of the buyer and had created an obligation on the sellers in favour of the buyer. This apparently was the reason which led them to the view that there were reciprocal demands and that the transactions had created independent obligations on each of the parties. This view is unfounded. The sum of Rs. 13,000 had been paid as and by way of advance payment of price of goods to be delivered. It was paid in discharge of obligations to arise under the contract. It was paid under the terms of the contract which was to buy goods and pay for them. It did not itself create any obligation on the sellers in favour of the buyer; it was not intended to be and did not amount to an independent transaction detached from the rest of the contract. The sellers were under an obligation to deliver the goods but that obligation arose from the contract and not from the payment of the advance alone. If the sellers had failed to deliver goods, they would have been liable to refund the monies advanced on account of the price and might also have been liable in damages but such liability would then have arisen from the contract and not from the fact of the advances having been made. Apart CS DJ No. 7509/2016 CNR No. ­ DLST01­000481­2011 Page 43 of 59 Dinesh Kumar/ADJ­02/South/Saket/ND/18.05.2023 M/s Indiatech (A Partnership Firm) Th. Mr. Rajiv Kakkar (Partner) Vs. M/s Johnson Engineers Th. Sole Proprietor Mr. Christophar Pacheco from such failure, the buyer could not recover the monies paid in advance. No question has, however been raised as to any default on the part of the sellers to deliver goods. This case therefore involved no reciprocity of demands. Article 115 of the Jammu and Kashmir Limitation Act cannot be applied to the suit." (Emphasis Supplied)

31. After holding that Article 1 of the Schedule was not applicable, Hon'ble High Court held that Article 14 was also not applicable and that Article 113 was applicable in such cases. It has held as under:

"20. In case of a running and non­mutual account between the buyer and seller, when goods are delivered by the seller to the buyer, the value of the goods is debited in the debit column and when amounts are paid by the buyer to the seller, they are entered in the credit column. The difference is continuously struck in the column for balance. In such a case, when the buyer defaults to make balance payment, the seller‟s action is not for the price of goods sold and delivered but for the balance due at the foot of an account. Thus, Article 14 would have no application in suits of recovery of money due on a running and a non­mutual current account between the buyer and seller.

"21. In this regards, it is important to note the following observations made in the decision reported as (1849) 7 C.

3. 106 Dood v. Wigley when it was observed:­ "Where goods are ordered of a tradesman on the 1st of January and distinct orders for other goods are given on the 2nd, 3rd, 4th, 5th, etc., if from the previous dealings between the parties, or from general usage, or otherwise, it is to be inferred that it was contemplated by the parties, that, in the event of the dealing continuing, the several items should be included in the monthly, quarterly, or yearly bills, the result of such an arrangement, and the CS DJ No. 7509/2016 CNR No. ­ DLST01­000481­2011 Page 44 of 59 Dinesh Kumar/ADJ­02/South/Saket/ND/18.05.2023 M/s Indiatech (A Partnership Firm) Th. Mr. Rajiv Kakkar (Partner) Vs. M/s Johnson Engineers Th. Sole Proprietor Mr. Christophar Pacheco legal position of the parties, seems to be this,­upon the delivery and acceptance of the first parcel of goods, delivered on the 1st of January, an entire contract is created, and a complete cause of action accrues, the tradesman, being under no engagement to sell other goods, or to give credit beyond the price of the articles then delivered : when, on a subsequent day, other goods are delivered and accepted, a new contract arises, not simply a contract to pay for the goods then delivered, but a new entire contract by which the tradesman waives his existing right to payment of the goods delivered on the 1st of January, and the purchaser agrees to pay for both parcels as upon one entire sale... After the successive waiver and extinguishment of each preceding contract, the only subsisting contract and cause of action ex contractu will be the last."

"22. The observations in the decision reported as (1856) 18 C.B. 325 Bonsey v Woodsworth are also worthy of being noted; and are as under:­ "where a tradesman has a bill against a party for any amount, in which the items are so connected together that it appears that the dealing is not intended to terminate with one contract, but to be continuous, so that one item, if not paid, shall be united with another, and form one continuous demand, the whole together forms but one cause of action and cannot be divided."

"23. The upshot of the above discussion is that Article 14 of the Schedule to the Limitation Act, 1963 does not apply to suits for recovery of money due on a running and current but a non­mutual account between the buyer and seller i.e. an account of the kind with which we are dealing. "24. There being no Article in the Schedule to the Limitation Act, 1963 dealing with suits for recovery of money due on running and current but non­mutual accounts, in such circumstances, the residual article viz. Article 113 applies to such suits.

"25. Under Article 113, the period for limitation for filing a suit is three years and the same begins to run when the CS DJ No. 7509/2016 CNR No. ­ DLST01­000481­2011 Page 45 of 59 Dinesh Kumar/ADJ­02/South/Saket/ND/18.05.2023 M/s Indiatech (A Partnership Firm) Th. Mr. Rajiv Kakkar (Partner) Vs. M/s Johnson Engineers Th. Sole Proprietor Mr. Christophar Pacheco right to sue would accrue when claim was denied in response to the legal notice dated 26.06.1985 on 13.07.1985 but since `7,000/­ was paid on 13.07.1985 and 24.07.1985 (2,000/­ on the former date and 5,000/­ on the latter date), limitation would commence from 24.07.1985. The suit being filed on 02.09.1985, governed for purposes of limitation by Article 113 the suit would be within limitation." (emphasis supplied)

32. The Division Bench of Hon'ble High Court of Madras in case titled Renganathan Vs. M/s Sarvana Store, 2018 SCC Online Mad 5897, decided on 10.07.2018, while quoting the judgment of Hon'ble High Court of Delhi in Bharat Skins Corporation (Supra) has held that in such cases the residuary article 113 of the Schedule to the Limitation Act would be applicable. The judgments relied upon by the Ld. Counsel for the defendant are not applicable to the facts and circumstances of the present case.

33. In the present case also, it can be seen from the material on record that the defendant had placed various purchase orders to the plaintiff. The plaintiff had supplied material to the defendant on various dates through various invoices. The statements of accounts filed by the plaintiff and the defendant would show that payments had not been made by the defendant as per the invoices. Perusal of the statement of account filed by the plaintiff which is CS DJ No. 7509/2016 CNR No. ­ DLST01­000481­2011 Page 46 of 59 Dinesh Kumar/ADJ­02/South/Saket/ND/18.05.2023 M/s Indiatech (A Partnership Firm) Th. Mr. Rajiv Kakkar (Partner) Vs. M/s Johnson Engineers Th. Sole Proprietor Mr. Christophar Pacheco Ex.PW1/4 and the statement of account Ex.DW1/1 (colly) would show that payments of different amounts were made by the defendant on different dates while invoices of different amount were raised by the plaintiff. Ld. Counsel for the defendant has tried to show in the written arguments that the payments were made concurrently for the invoices raised by the plaintiff. However, I do not find any merits in the same. The payments are made on different occasions. Therefore, in the present case limitation period would start running from the date of legal notice when the claim of the plaintiff was denied by the defendant. In the present case, the plaintiff has shown the issuance of legal notice on 03.09.2011. No doubt, the plaintiff issued the legal notice after about one year and 6 months from the last payment received by it from the defendant. However, as held by Hon'ble High Court of Delhi in Bharath Skins Corporation Vs. Taneja Skins Company Pvt. Ltd.:MANU/DE/7351/2011, the limitation period in the present case has to start from the date of legal notice.

34. It is also worth noting that in his statement of account Ex.DW1/1 (colly) the defendant has debited the amount of Rs.9,09,622/­ in his account on 12.05.2011 on CS DJ No. 7509/2016 CNR No. ­ DLST01­000481­2011 Page 47 of 59 Dinesh Kumar/ADJ­02/South/Saket/ND/18.05.2023 M/s Indiatech (A Partnership Firm) Th. Mr. Rajiv Kakkar (Partner) Vs. M/s Johnson Engineers Th. Sole Proprietor Mr. Christophar Pacheco account of rejection of goods supplied by the plaintiff vide invoices 113, 114, and 116, dated 09.12.2008, 11.12.2008, and 15.12.2008 respectively. The defendant has debited amount of Rs.9,948/­ in his account on 12.05.2011 on account of mistake in bill no.144 dated 27.11.2009. So, the entry in the accounts of the defendant is of the year 2008 and then he debited the same in the year 2011 i.e. after expiry of more than 2 years. These acts of the defendant himself are sufficient to prove that the account between the parties was current, running and non­mutual. Therefore, the matter has to be governed under Article 113 of the Schedule to the Limitation Act. In both the cases, the suit is within limitation. The issue is accordingly decided in favour of the plaintiff and against the defendant.

35. Issue no. 1­ This issue reads as under:­ "1. Whether the plaintiff is entitled for a decree of recovery of Rs. 14,96,069/­ alongwith pendent elite and future interest @ 18% per annum as claimed in the plaint? OPP"

36. The plaintiff has claimed the amount of Rs.14,96,069/­ which includes principle amount of Rs.10,99,681/­ and interest amount of Rs.3,96,388/­ @ 18% CS DJ No. 7509/2016 CNR No. ­ DLST01­000481­2011 Page 48 of 59 Dinesh Kumar/ADJ­02/South/Saket/ND/18.05.2023 M/s Indiatech (A Partnership Firm) Th. Mr. Rajiv Kakkar (Partner) Vs. M/s Johnson Engineers Th. Sole Proprietor Mr. Christophar Pacheco p.a. The defendant has objected to the claim of the plaintiff while raising certain objections.

37. Even though, no issue has been framed, the defendant has taken objection that this Court does not have territorial jurisdiction to decide the present suit. It is argued that no cause of action had arisen within the jurisdiction of this Court and therefore, this Court does not have territorial jurisdiction to decide the present suit. Ld. Counsel for the plaintiff, on the other hand, would argue that all the purchase orders were issued by the defendant from his office which is within the territorial jurisdiction of this Court. He had also made payment to the plaintiff. Further, the defendant is residing and working for gains within the territorial jurisdiction of this Court and therefore, this Court has territorial jurisdiction to decide the present suit.

38. The present suit being a suit for recovery of money is governed by Section 20 of the CPC. The address of the defendant is of Greater Kailash, New Delhi which is situated within the territorial jurisdiction of this Court. The defendant has not denied that he had issued the purchase orders from his office. Thus, part cause of action had arisen within the territorial jurisdiction of this Court. In any case, the CS DJ No. 7509/2016 CNR No. ­ DLST01­000481­2011 Page 49 of 59 Dinesh Kumar/ADJ­02/South/Saket/ND/18.05.2023 M/s Indiatech (A Partnership Firm) Th. Mr. Rajiv Kakkar (Partner) Vs. M/s Johnson Engineers Th. Sole Proprietor Mr. Christophar Pacheco defendant is working for gains within the territorial jurisdiction of this Court. Hence, this Court has territorial jurisdiction to decide the present suit.

39. Another ground raised by the defendant to deny the claim of the plaintiff is that there are three invoices which are in dispute and the defendant was not liable to make payment of those three invoices. The invoices are Ex.DW1/DX2 (colly). It is averred by the defendant that the goods supplied by the plaintiff vide those invoices were supplied by the plaintiff after delay and therefore he had rejected those goods and hence he is not liable to make payment of those goods to the plaintiff. The plaintiff has denied rejection of any goods by the defendant.

40. Perusal of the record would show that the Goods vide invoices Ex.DW1/DX2 (colly) were admittedly sent by the plaintiff at the site of Rockman Breweries Ltd. at Beer Garden, 4th floor, Ambience Mall, Gurgaon. The DW1, in his cross examination, has admitted that he had placed order for goods which were supplied by the plaintiff through the invoices no. 113, 114, and 116 dated 09.12.2008, 11.12.2008 and 15.12.2008 respectively which are part of Ex.DW1/DX2(colly). He would state that the goods were not CS DJ No. 7509/2016 CNR No. ­ DLST01­000481­2011 Page 50 of 59 Dinesh Kumar/ADJ­02/South/Saket/ND/18.05.2023 M/s Indiatech (A Partnership Firm) Th. Mr. Rajiv Kakkar (Partner) Vs. M/s Johnson Engineers Th. Sole Proprietor Mr. Christophar Pacheco accepted and that the goods were delayed by one month. He has also admitted that the original invoices and challans/road permits were with the defendant which are Ex.DW1/DX2(colly). He has also admitted that the goods were accepted at the site alongwith the road permit. He would also state that no written notice was sent to the plaintiff informing that the goods were rejected, however they (plaintiff) were verbally informed.

41. Section 41 and Section 42 of the Sale of Goods Act are worth quoting here. The Sections 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 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.

42. Hon'ble High Court of Delhi in the judgment titled Lohmann Rausher Gmbh vs Medisphere Marketing Pvt.

CNR No. ­ DLST01­000481­2011 Page 51 of 59 Dinesh Kumar/ADJ­02/South/Saket/ND/18.05.2023 M/s Indiatech (A Partnership Firm) Th. Mr. Rajiv Kakkar (Partner) Vs. M/s Johnson Engineers Th. Sole Proprietor Mr. Christophar Pacheco Ltd. 117(2004) DLT 95, has held that 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 delivery. If not rejected within reasonable time, mandate of Section 42 stipulates that the defendant would be deemed to have accepted the goods.

43. The defendant in the present case has not produced even a single document to the effect that goods covered by the aforesaid invoices were ever rejected by him at any point of time. The statement of the witness that the plaintiff was verbally informed is self serving statement not supported by any evidence. In view of the settled position of law in relation to Sections 41 and 42 of the Sales of Goods Act, the goods were not rejected by the defendant and it amounts to deemed acceptance.

44. There are two more aspects worth discussing here. The defendant has filed in his defence his ledger account related to the plaintiff which is Ex.DW1/1 (colly). In the said ledger statement, the defendant has debited the amount of those three invoices because of alleged rejection on 12.05.2011 while those invoices were raised in December CS DJ No. 7509/2016 CNR No. ­ DLST01­000481­2011 Page 52 of 59 Dinesh Kumar/ADJ­02/South/Saket/ND/18.05.2023 M/s Indiatech (A Partnership Firm) Th. Mr. Rajiv Kakkar (Partner) Vs. M/s Johnson Engineers Th. Sole Proprietor Mr. Christophar Pacheco 2008. If the defendant was of the view that the goods were rejected by him, the debit entries should have been made in the financial year 2008­09 itself and not in 2011­12.

45. Further, the defendant has claimed that the goods were supplied after delay and therefore they could not be utilized. Due to the said reason, the client i.e. Rockman Breweries Ltd. had stopped his payments and he had to file a suit for recovery against the said company. Now, in his cross examination, he has denied the suggestion that he had used the said material at site. He would state that the material was still lying at the site since the plaintiff did not take them back. However, he has not brought on record any evidence to show that he had used some other material supplied by some other person on the site. The defendant has also filed on record copy of the plaint of the suit filed by him against M/s Rockman Breweries Ltd. which is Ex.DW1/X1. It is interesting to note that in the said plaint the defendant herein has averred that he, in due course, duly executed the job which was contracted by him and duly commissioned the electrical works entrusted at site on 4 th floor, Ambience Mall, Gurgoan and on due completion of bill, he submitted his final bill and therefore, he is entitled to the entire amount CS DJ No. 7509/2016 CNR No. ­ DLST01­000481­2011 Page 53 of 59 Dinesh Kumar/ADJ­02/South/Saket/ND/18.05.2023 M/s Indiatech (A Partnership Firm) Th. Mr. Rajiv Kakkar (Partner) Vs. M/s Johnson Engineers Th. Sole Proprietor Mr. Christophar Pacheco which was withheld by the said company. Thus, it amounts to an admission on the part of the defendant that the work was not delayed due to any delayed supply of material by the plaintiff in the present suit. The principle of estoppel applies against the defendant and therefore, he cannot take the defence that the goods were supplied after delay by the plaintiff. The plaintiff has proved, on the preponderance of probability, that the defendant had received the goods and did not reject them.

46. The defendant has also averred that he had made a payment of Rs.2,00,000/­ in cash to the plaintiff which is not reflected in statement of account filed by the plaintiff. The plaintiff has denied receiving any such amount from the defendant. The burden was on the defendant to prove the said averment. However, no evidence except the self serving statement of account has been brought on record. During his cross examination, the DW1 would state that he had obtained a receipt of the said payment of Rs.2 Lakhs from the plaintiff. However, no such receipt has been brought on record. If any such receipt was issued by the plaintiff, the defendant had to produce the same in the Court. The burden was on the defendant to prove the payment by producing any CS DJ No. 7509/2016 CNR No. ­ DLST01­000481­2011 Page 54 of 59 Dinesh Kumar/ADJ­02/South/Saket/ND/18.05.2023 M/s Indiatech (A Partnership Firm) Th. Mr. Rajiv Kakkar (Partner) Vs. M/s Johnson Engineers Th. Sole Proprietor Mr. Christophar Pacheco receipt / voucher to show that he had made such a payment in cash. However, he has failed to produce any such evidence. I hold that the defendant has failed to prove that he had paid Rs.2,00,000/­ in cash to the plaintiff.

47. The defendant has also averred that in the invoice no. 144, the plaintiff has made a wrong entry and charged double of the agreed rate and has shown a sum of Rs.9,948/­ in excess. In his cross examination PW1 has admitted that the calculation in invoice no.144 appears to be wrong. PW­1 has stated that it seems that there was mistake in calculation of invoice no. 144. Thus, the defendant has shown that the plaintiff had wrongly charged Rs.9,948/­ in excess in the said invoice. The said amount is therefore required to be deducted from the total outstanding amount.

48. Ld. Counsel for the defendant also argued that Form VAT D3 does not have any acknowledgment from the defendant. The said document is a false and manipulated document and therefore, the plaintiff is not entitled for recovery of any amount.

49. I have considered the submission. However, I do not find any merits in the same. The defendant himself has admitted receiving of the goods vide invoice no. 113, 114 CS DJ No. 7509/2016 CNR No. ­ DLST01­000481­2011 Page 55 of 59 Dinesh Kumar/ADJ­02/South/Saket/ND/18.05.2023 M/s Indiatech (A Partnership Firm) Th. Mr. Rajiv Kakkar (Partner) Vs. M/s Johnson Engineers Th. Sole Proprietor Mr. Christophar Pacheco and 116 as discussed hereinabove. He has failed to prove that he had rejected the goods. The delivery of the goods is deemed to be admitted as mentioned hereinabove. Therefore, even if, there is any error in the Form VAT D3, the defendant cannot avoid his liability on the said ground. After deducting the amount of Rs. 9,948/­ from the total claimed principal amount of Rs. 10,99,681/­, the defendant is liable to make payment of Rs. 10,89,733/­ to the plaintiff.

50. The plaintiff has also claimed interest @ 18% p.a. Admittedly there is no agreement between the parties regarding the rate of interest. There is nothing on record to show that it is an agreed rate of interest. Be that as it may, it is discretion of the Court to award interest pendente lite and future interest even if there is a specific contract between the parties. I get strength from the judgment passed by Hon'ble Supreme Court of India in case titlted Central Bank of India Vs. Ravindra & Ors. SLP (C) 2421/1993 decided on 18.10.2001.

51. Further Section 61 (2) of the Sales of Goods Act provides that in the absence of a contract to the contrary, the Court may award interest at such rate as it thinks fit on the amount of the price to the seller in a suit filed by him for the CS DJ No. 7509/2016 CNR No. ­ DLST01­000481­2011 Page 56 of 59 Dinesh Kumar/ADJ­02/South/Saket/ND/18.05.2023 M/s Indiatech (A Partnership Firm) Th. Mr. Rajiv Kakkar (Partner) Vs. M/s Johnson Engineers Th. Sole Proprietor Mr. Christophar Pacheco amount of the price, from the date of tender of the goods or from the date on which the price was payable. In Clariant International Ltd. & Anr. Vs. Securities & Exchange Board of India (2004) 8 SCC 524, Hon'ble Supreme Court of India has held that in the absence of any agreement or statutory provisions or mercantile usage, interest payable can be only at the market rate and such interest is payable upon establishment of totality of circumstances justifying exercise of such equitable jurisdiction. It has also been held that the Courts of law can take judicial notice of both inflation and also the bank rate of interest.

52. In the present case, the interest claimed by the plaintiff is very high. In the facts and circumstances of the case and taking judicial notice about the rate of interest charged by nationalized banks, I hold that the plaintiff is entitled to interest @ 10% p.a. from the date of legal notice i.e. 03.09.2011 till preparation of decree. As the transaction in question is commercial in nature, the plaintiff is also entitled to interest at the same rate from the date of decree till realization of the amount. The issue is accordingly decided in favour of the plaintiff.

CNR No. ­ DLST01­000481­2011 Page 57 of 59 Dinesh Kumar/ADJ­02/South/Saket/ND/18.05.2023 M/s Indiatech (A Partnership Firm) Th. Mr. Rajiv Kakkar (Partner) Vs. M/s Johnson Engineers Th. Sole Proprietor Mr. Christophar Pacheco

53. Issue no.2­ The issue reads as under:

"2. Whether the plaintiff has no cause of action to file the present suit, if so, to what effect? OPD"

54. In view of the findings of issues discussed herein­ before, it is shown that the plaintiff has a cause of action to file the present suit. Hence, the issue is accordingly decided against the defendant.

55. Issue no. 5: This issue reads as under :

"5. Whether the plaintiff has not approached this Court with clean hands and has concealed the material facts, if so, to what effect? OPD"

56. The onus to prove this issue was on the defendant. However, nothing has come on record to prove that the plaintiff has not approached the Court with clean hands. The issue is therefore decided against the defendant.

57. Issue no. 6 ­ Relief: In view of the findings recorded hereinabove, the suit of the plaintiff is decreed. The plaintiff is entitled to a decree of recovery of Rs. 10,89,733/­ from the defendant. The plaintiff is also entitled to an interest @ 10% per annum from the date of legal notice i.e. 03.09.2011 till realization of the amount. The plaintiff is also entitled to the cost of the suit.

CNR No. ­ DLST01­000481­2011 Page 58 of 59 Dinesh Kumar/ADJ­02/South/Saket/ND/18.05.2023 M/s Indiatech (A Partnership Firm) Th. Mr. Rajiv Kakkar (Partner) Vs. M/s Johnson Engineers Th. Sole Proprietor Mr. Christophar Pacheco

58. The plaintiff is directed to deposit the deficient Court Fee, if any, within 15 days. The decree shall not be executable unless the entire Court fee is paid. The fact of deficiency of Court Fee if any be mentioned in the decree.

59. Decree sheet be prepared accordingly.

Pronounced in the open Court on this 18th day of May 2023.

(DINESH KUMAR) ADDL. DISTRICT JUDGE­02, SOUTH, SAKET COURTS, NEW DELHI.

DINESH               KUMAR
KUMAR                Date:
                     2023.05.18
                     14:36:39 +0530




  CS DJ No. 7509/2016
  CNR No. ­ DLST01­000481­2011
  Page 59 of 59             Dinesh Kumar/ADJ­02/South/Saket/ND/18.05.2023