Delhi District Court
Vivek Sarda Sole Proprietor Of M/S ... vs Saurabh Khandelwal Sole Proprietor Of ... on 28 April, 2026
IN THE COURT OF SH MUKESH KUMAR GUPTA
DISTRICT JUDGE(COMMERCIAL)-07(CENTRAL)
TIS HAZARI COURTS: DELHI
CS (Comm.) No. 494/2025
CNR No. DLCT01-006139-2025
Sh. Vivek Sarda
Sole Proprietor of
M/s Balaji Granimarmo
R/o A-33, 2nd Floor,
Mansarover Garden, New Delhi-110015
Email : [email protected]
Mobile No. 9911004089
......Plaintiff
Vs
Sh. Saurabh Khandelwal
Sole Proprietor of M/s Noida Buildwell
Registered Office at:
3752, First Floor,
Loha Wali Gali, Main Road,
Chawri Bazar, Delhi 110006
Also at :
6-212, E Block, Sector 63,
Noida, Uttar Pradesh-201301
Email:[email protected]
Mobile: +91 8826980926
...... Defendant
SUIT FOR RECOVERY OF RS.9,85,474/-
Date of institution of suit : 28.04.2025
Date on which reserved : 24.04.2026
Date of Judgment : 28.04.2026
CS (Comm.) No. 494/2025 Vivek Sarda Vs. Saurabh Khandelwal Page no. 1 of 34
Digitally signed
MUKESH by MUKESH
KUMAR GUPTA
KUMAR Date:
GUPTA 2026.04.28
Appearance(s) : Shri Jitin Mann, Adv. Ld. Counsels for plaintiff.
Shri Piyush Pahuja, Advocate, Ld. Counsel for the
defendant.
JUDGMENT
(A) PRELUDE:
1. By way of present judgment, I shall conscientiously adjudicate upon plaintiff's suit for recovery of Rs.9,85,474/- alongwith interest @ 19.5% per annum pendente-lite and future from the date of filing of suit till its realization against the defendant. The plaintiff has also prayed for costs of the suit.
(B) PLAINTIFF'S CASE: -
2) Eschewing Prolix reference to the pleadings, crystalizing the same,
the case of the plaintiff as averred in the plaint is that:
2.1) The plaintiff is engaged in the business of sale and purchase of granite, marble, tiles, and allied products while the defendant being the sole proprietor of M/s Noida Buildwell is stated to be in charge of and responsible for the conduct of its business.
2.2) It is the case of the plaintiff that the parties had ongoing business dealings over a period of time, pursuant to which the defendant visited the office of the plaintiff, situated at Delhi, for placing orders for the supply of goods, sending purchase orders, receiving invoices, documentation etc. besides making of part payments and other meetings connected with their business transactions with the plaintiff. It has been further averred that the plaintiff supplied the goods ordered by the defendant from time to time and raised invoices accordingly, also maintaining a running account reflecting all the transactions, including payments made and amounts outstanding.
CS (Comm.) No. 494/2025 Vivek Sarda Vs. Saurabh Khandelwal Page no. 2 of 34 Digitally signed MUKESH by MUKESH KUMAR KUMAR GUPTA Date: 2026.04.28 GUPTA 16:30:55 +0530 2.3) The plaintiff asserts that the goods so supplied were duly received by the defendant, which is evident from the acknowledgment of the defendant or its representative on the invoice/bill and the corresponding e-way bill placed on record. The plaintiff has also relied upon its statement of account/ledger to substantiate the transactions between the parties during the relevant period.
2.4) It is further the case of the plaintiff that it is registered under the Micro, Small and Medium Enterprises Development Act, 2006 (hereinafter referred to as MSMED Act, 2006) and is therefore, entitled to claim interest as per Section 16 of the MSMED Act, 2006 on delayed payments. According to the plaintiff, a sum of Rs.9,85,474/- (comprising of Rs.5,50,724/- towards the remaining principal amount and Rs.4,34,750/- towards accrued interest) remains outstanding and payable by the defendant towards unpaid invoices. The plaintiff has alleged that the defendant has withheld the aforesaid amount without any justification and is consequently liable to pay the outstanding sum along with interest. Placing reliance on Section 16 of the MSMED Act, 2006 the Plaintiff has claimed interest at the rate of 19.5% per annum from the date of the invoices till realization, including pendente-lite and future interest.
2.5) The plaintiff avers that despite repeated requests and demands for payment of the outstanding amount along with applicable interest, the defendant has failed to discharge his liability. The plaintiff has further claimed that the cause of action arose in Delhi at various stages, including the placement of orders, supply of goods, raising of invoices, part payments made by the defendant, and the failure of the defendant to clear the outstanding dues. The cause of action is stated to be continuing.
CS (Comm.) No. 494/2025 Vivek Sarda Vs. Saurabh Khandelwal Page no. 3 of 34 Digitally signed MUKESH by MUKESH KUMAR GUPTA KUMAR Date:
GUPTA 2026.04.28 16:31:00 +0530 2.6) It is also stated that Pre-Institution Mediation Settlement proceedings were initiated by the plaintiff, which did not culminate into any settlement and resulted into issuance of a Non-Starter Report dated 13.12.2024, by the concerned DLSA.
2.7) Hence, the present suit for recovery of ₹9,85,474/- along with pendente-lite and future interest at the rate of 19.5% per annum from the date of filing of the suit till realization, along with costs and other appropriate reliefs.
(C) DEFENDANT'S CASE:-
3. On receipt of summons for settlement of issues, the defendant contested the suit by filing a detailed Written Statement thereby taking various preliminary objections as averred and mentioned hereinunder:
3.1) The present suit is devoid of merit and is based on false, frivolous, and baseless averments, and is therefore, liable to be dismissed with exemplary costs under Section 35 of the CPC. It is further contended that the plaintiff has suppressed material facts and has not approached this Court with clean hands, having filed the present suit with malafide intent to harass the defendant.
3.2) It is contended by the defendant that the plaint suffers from lack of material particulars, as the plaintiff has failed to provide complete details regarding the alleged supply of goods, payments received, and the computation of the outstanding amount and as such, these omissions render the suit defective and not maintainable.
3.3) The Defendant has specifically contended that goods supplied under Invoice No. BGN/010/2022-23 dated 05.07.2022 were defective and not in accordance with the assurances given by the plaintiff. It is stated that the defendant had duly intimated the plaintiff CS (Comm.) No. 494/2025 Vivek Sarda Vs. Saurabh Khandelwal Page no. 4 of 34 Digitally signed MUKESH by MUKESH KUMAR GUPTA KUMAR Date:
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regarding the defects, on which the plaintiff had agreed to take back the said goods and adjust the corresponding amount. It is also asserted that no liability subsists, since full and final payment has already been made for all goods received in satisfactory condition.
3.4) The defendant has also raised objection to the territorial jurisdiction of this Court, contending that the defendant carries on business in Noida, Uttar Pradesh, and that all transactions between the parties took place at Noida. It is submitted that no part of the cause of action has arisen within the jurisdiction of this Court and, therefore, the plaint is liable to be returned under Order VII Rule 10 CPC.
3.5) It is further contended that the interest claimed by the plaintiff at the rate of 19.5% per annum is excessive, arbitrary, and unsupported by any agreement. The Defendant submits that no proper computation has been provided and that any interest, if payable, ought to be at a reasonable rate in accordance with law.
3.6) The Defendant has also taken the objection that proper court fees have not been affixed, rendering the plaint liable to rejection under Order VII Rule 11 CPC. It is further contended that there exists no subsisting liability towards the Plaintiff and that the present suit is an abuse of the process of law. The Defendant has additionally asserted that the suit is without any cause of action, relying on the settled principle that a cause of action must comprise a bundle of material facts giving rise to a right to sue. It is contended that in the absence of any actionable wrong, no cause of action accrues in favour of the Plaintiff.
3.7) On merits, all the allegations made in the plaint have been denied as incorrect. Defendant has denied the existence of continuous business dealings as alleged by the plaintiff, including visits to the plaintiff's Delhi office, placement of orders, and maintenance of any CS (Comm.) No. 494/2025 Vivek Sarda Vs. Saurabh Khandelwal Page no. 5 of 34 Digitally signed MUKESH by MUKESH KUMAR GUPTA KUMAR Date:
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running account. The defendant has also denied the receipt and acknowledgment of goods in the manner alleged by the plaintiff. It is specifically contended that the goods under Invoice No. BGN/010/2022- 23 dated 05.07.2022 were defective and not in conformity with agreed specifications, and that the plaintiff had agreed to take back the same. The defendant reiterates that full and final payment has been made for all goods received in satisfactory condition and that no amount remains due. The defendant has further denied the correctness and authenticity of the statement of account/ledger relied upon by the plaintiff and disputed plaintiff's registration as also his entitlement to interest under the MSMED Act, 2006. The defendant has denied the alleged outstanding amount of ₹9,85,474/- and has further denied having received any demand or notice in respect thereof. In view of the above, the defendant has denied the reliefs sought by the plaintiff and has prayed for dismissal of the suit with costs, contending that the claim is baseless, unsupported by evidence, and not maintainable in law.
4. A detailed replication to the Written Statement has also been preferred by the plaintiff reiterating the contents of the plaint and vehemently denying the contents of the Written Statement. In the replication, the plaintiff has denied the preliminary objections raised by the defendant and specifically averred that all the goods were in compliance with the orders as well as to the requirements of the defendant. The plaintiff has specifically denied that the goods supplied to the defendant under the alleged invoice were found to be defective, unsatisfactory or contrary to the representations and assurance given by the plaintiff and averred that the supplied goods have been duly installed at various sites to the complete satisfaction of the defendant. The plaintiff CS (Comm.) No. 494/2025 Vivek Sarda Vs. Saurabh Khandelwal Page no. 6 of 34 Digitally signed MUKESH by MUKESH KUMAR GUPTA KUMAR Date:
GUPTA 2026.04.28 has denied that the Court has no territorial jurisdiction to entertain the present suit and reiterated that all the interactions/transactions between the parties has been done in Delhi and also the registered office of the defendant is situated at Delhi, which lies within the territorial jurisdiction of this Court. It has been further averred that the jurisdiction clause mentioned in the sale invoice clearly and unambiguously specifies that a dispute arisen shall be subjected to the Delhi jurisdiction and the same does not violate Section 28 of the Indian Contract Act, 1872. The plaintiff has specifically denied that he is entitled to the reliefs claimed and has prayed that the suit be decreed in terms of the prayer made in the plaint.
(D) CRYSTALISING THE DISPUTE: -
5. On pleadings of the parties and documents placed on record and after hearing Ld. Counsels for the parties, the following issues were framed for adjudication vide order dated 02.12.2025.
ISSUES:
(1) Whether the goods supplied by the plaintiff were found to be defective and unsatisfactory, if so, its effect? OPD (2) Whether this court has no territorial jurisdiction to try and entertain the suit ? OPD (3) Whether the plaintiff is entitled to recovery of Rs.9,85,474/- against the defendant as claimed in the suit ? OPP (4) Whether the plaintiff is entitled to any interest on such amount, if so, at what rate and for what period? OPP (5) Relief.
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(E) EVIDENCE OF PLAINTIFF
6. Plaintiff, in support of his case, got examined himself as PW1 and reiterated the contents of the plaint on oath in his affidavit Ex.PW1/A. He got exhibited the following documents :
1. Invoice Ex.PW1/1 2. E-way Bill Ex.PW1/23. Self Certified/True copy of the Account Ex.PW1/3 Ledger maintained by the plaintiff
4. Registration Certificate of the firm of the Ex.PW1/4 plaintiff under MSME
5. Non-Starter Report Ex.P-1
7. He has specifically deposed that the supplied goods were neither defective nor unsatisfactory and were as per the requirements and to the complete satisfaction of the defendant. He has further deposed that no issues with regard to the quality of goods were ever raised by the defendant nor the same was ever intimated to the plaintiff. He has also deposed that the goods were duly accepted by the defendant after proper quality check at the designated site of the defendant as also the same has been duly consumed and installed by the defendant at the site. He has finally deposed that the suit is correct and the defendant is liable to pay the outstanding amount with interest and costs.
8. During a detailed cross-examination, Ld. Counsel for defendant Mr. Pahuja tried to puncture the testimony of PW1, on the aspects of territorial jurisdiction, supplied goods being defective and the payment being made leaving no outstanding against the defendant. He specifically denied that the affidavit was signed without reading its contents or that it CS (Comm.) No. 494/2025 Vivek Sarda Vs. Saurabh Khandelwal Page no. 8 of 34 Digitally signed MUKESH by MUKESH KUMAR GUPTA KUMAR Date:
GUPTA 2026.04.28 16:31:33 +0530 was not attested at Tis Hazari Courts. PW-1 affirmed that he is the proprietor of M/s Balaji Granimarmo, and that the MSME Certificate with respect to that firm has been placed on record alongwith the plaint. He has also admitted that no other document has been filed to specifically prove that he is the sole proprietor of the said firm. He further stated that the office of his firm is situated at Sector-49, Noida, Uttar Pradesh. The witness has denied that the defendant has its office at Plot No. 212, Block-E, Sector-63, Noida. He has also admitted that the goods were dispatched/delivered from Gautam Buddha Nagar, Uttar Pradesh, to the address of the defendant at Noida, Sector-150, Uttar Pradesh. He has also admitted that the defendant has made a payment of Rs. 14,78,147/- against the invoice/bill Ex.PW1/1 of Rs. 20,28,871/- but has denied that any part of the supplied goods (slab marbles) was defective or of inferior quality or that any quantity was ever rejected by the defendant on that ground. PW-1 has further specifically denied that defective goods were rejected and returned by the defendant due to defect or substandard quality or that objections were raised by the defendant regarding the quality of the goods. He has also denied that he failed to replace or take back any alleged defective goods, or that he did not issue any credit notes against such goods. He likewise denied that, despite having assured the defendant of adjustment of the amount of defective goods, he failed to adjust or deduct the same in the ledger account Ex. PW1/4.
9. On interest, the witness has admitted that there is no written agreement between the parties for levy of interest at 19.5% per annum on delayed payment. However, he has denied that any "extra" or incorrect interest has been charged in the ledger account in order to increase the CS (Comm.) No. 494/2025 Vivek Sarda Vs. Saurabh Khandelwal Page no. 9 of 34 Digitally signed by MUKESH MUKESH KUMAR GUPTA KUMAR Date:
2026.04.28 GUPTA 16:32:07 +0530 alleged outstanding thereby asserting that the interest charged has been calculated in accordance with the provisions of the MSMED Act, 2006. The witness has also admitted that no bank statement of the plaintiff has been placed on record but denied the suggestion that this was done deliberately to conceal the exact payments made by the defendant or to show a higher outstanding. He has categorically denied that the defendant has already made full payment of all goods delivered or that there is no outstanding due as on date. He also denied that the plaintiff has failed to adjust the alleged defective goods amount in the ledger, and also denied the suggestion that after such adjustment there would be no outstanding. PW-1 has also denied that all transactions took place solely within the jurisdiction of Noida or that both parties carry on business only at Noida and that no transaction arose within the jurisdiction of this Court. Though he has affirmed that the goods were delivered from the area of the plaintiff at Noida to the defendant at Noida, UP, and that orders were placed to the plaintiff at Noida, UP but has categorically denied that the suit has not been filed before a competent court of territorial jurisdiction. PW-1 has finally denied that a proper ledger account statement has not been filed after adjusting the amount of allegedly defective goods.
10. No other witness was examined by the plaintiff and the evidence of the plaintiff was closed on 24.03.2026.
(F) DEFENDANT'S EVIDENCE :-
11. The defendant in his defence got examined himself as DW-1 and reiterated the contents of the Written Statement on oath. He has taken all the defences in his evidence on oath including the aspect of territorial jurisdiction, defective and unsatisfactory supply of goods as also absence CS (Comm.) No. 494/2025 Vivek Sarda Vs. Saurabh Khandelwal Page no. 10 of 34 Digitally signed MUKESH by MUKESH KUMAR GUPTA KUMAR Date:
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of any agreement for high interest on delayed payments. DW1 also deposed in his evidence that the suit filed by the plaintiff deserved to be dismissed at the very outset.
12. During a detailed cross-examination by Ld. counsel for plaintiff, DW1 affirmed that he had filed his affidavit Ex.DW1/A after reading and understanding its contents. He has clarified that the address mentioned therein is his office address, while giving details of his current residential address. He admitted that he is the sole proprietor of M/s Noida Buildwell, a trading firm in existence for about seven years, engaged in the business of granite, tiles, wooden furniture, and sanitary ware, with an annual turnover of approximately Rs.10-15 lakhs, (improved to about Rs.20 lakhs). He has further admitted that his firm is not a manufacturer but a trader, purchasing goods from suppliers, including the plaintiff, and selling them onward to clients. The witness has acknowledged and admitted that his firm is registered under GST and the MSMED Act, 2006. Upon being shown the GST Registration Certificate (Ex. DW/PX1), he confirmed its correctness, including its registered address at Chawri Bazar, Delhi, and stated that he has no other GST registration except the aforesaid. Likewise he has admitted that his registration under MSMED Act, 2006 also bears the same address of Chawri Bazar, Delhi- 110006. He has also admitted that he avails input tax credit on GST invoices and that the invoice raised by the plaintiff is a GST invoice, though he expressed inability to recall whether input tax credit was claimed on the specific invoice in question. He also admitted to having made part payments to the plaintiff through his ICICI Bank, Chawri Bazar Branch. Significantly, DW1 was unable to specify the extent or quantity of alleged defective goods. He admitted that he had neither CS (Comm.) No. 494/2025 Vivek Sarda Vs. Saurabh Khandelwal Page no. 11 of 34 MUKESH Digitally by MUKESH signed KUMAR KUMAR GUPTA Date: 2026.04.28 GUPTA 16:32:17 +0530 returned any goods nor issued any written communication-such as letters, emails, or notices raising complaints regarding defects, and had not raised any debit note. He further conceded that no suit, counterclaim, set- off, or complaint had been filed by him against the plaintiff in respect of the alleged defective goods. When confronted with his written statement, he admitted that the plea of defect was made in general terms without specific particulars. DW1 further deposed that although orders were placed telephonically and sometimes through email, no such emails have been placed on record, and he could not recall relevant details, including contact information of the concerned representative. He also admitted that no account statement or ledger relating to transactions with the plaintiff has been filed by him. While acknowledging regular business dealings with the plaintiff since 2020-21 and admitting part payments, DW1 denied liability, including liability to pay interest. He also admitted that other cases filed by entities related to the plaintiff are pending against him, but denied any deliberate withholding of payment or that the goods supplied were in accordance with specifications.
13. No other witness was examined by the defendant and the evidence of the defendant was closed vide statement dated 24.03.2026.
(G) ARGUMENTS ADDRESSED:- ARGUMENTS OF PLAINTIFF.
14. Ld. counsel for the plaintiff Shri Jitin Mann has vehemently argued that the plaintiff has duly proved its case entitling him not on the principle amount but also to the interest claimed by way of not only his clear and categoric testimony but also by testimony of DW-1 recorded through cross-examination wherein which he has duly admitted the case CS (Comm.) No. 494/2025 Vivek Sarda Vs. Saurabh Khandelwal Page no. 12 of 34 Digitally signed by MUKESH MUKESH KUMAR GUPTA KUMAR Date:
2026.04.28 GUPTA 16:32:31 +0530 of the plaintiff in respect of supply of goods covered by invoice Ex.PW1/1. It has been argued that the goods were duly received by the defendant by acknowledging the same on the copy of invoice as also the e-way bill Ex.PW1/2 which has remained unbreached during evidence. It has been further argued that the defence taken by the defendant is not only sham but also unsustainable in law and on facts as can be clearly deciphered from the evidence of defendant himself. It has been stated that the defendant has failed to show on record by way of any cogent evidence that the goods in question were either defective or unsatisfactory as can be seen from the fact that the defendant has confirmed that he has neither returned the goods nor raised any debit note or has even filed his ledger/account statement and on the contrary, has admitted that he has also taken the GST Input Credit of the goods supplied through invoice Ex.PW1/1. It has been legally argued that there is a presumption under Section 42 of Sales of Goods Act which provides that the buyer is deemed to have accepted the goods after lapse of reasonable time if he retains the same without intimating to the seller that he has rejected them and the very fact stands substantiated from the testimony of the defendant before the Court during cross-examination. On the aspect of the territorial jurisdiction of the Court to entertain and try the instant suit, Ld. counsel has stated that the same has also proved to be a bogus defence in as much the defendant in his cross-examination has admitted not only the invoice but his GST Registration Certificate Ex.DW1/PX1, which shows the registered address of the defendant within the jurisdiction of this Court. It has also been argued that even the MSME Certificate has been admitted by the defendant showing the same address and the case is squarely covered within the purview of Section 20 of CPC. Additionally, Ld. counsel for plaintiff has argued that even CS (Comm.) No. 494/2025 Vivek Sarda Vs. Saurabh Khandelwal Page no. 13 of 34 Digitally signed MUKESH by MUKESH KUMAR GUPTA KUMAR Date:
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otherwise, the case is squarely covered within the principle of debtor must pay the creditor in as much as not only the invoices but also the registered address of the defendant is within the jurisdiction of this Court at Delhi and it is an admitted case that the payments as per the invoice were to be received at Delhi only and the part payments made by the defendant was also through its banker situated in Chawri Bazar, New Delhi within the jurisdiction of this Court. Finally addressing the arguments on the aspect of interest claim, Ld. counsel for plaintiff has reiterated that admittedly both plaintiff and defendant are MSMEs registered under the MSMED Act, 2006 which provides for a non obstente Section 16 and the interest rate at the rate 3 times the bank rate notified by RBI compounded with monthly rests is specifically provided. Ld. counsel has prayed for decreeing the suit with exemplary costs.
ARGUMENTS OF DEFENDANT:
15. Ld. Counsel for defendant, Mr. Piyush Pahuja, on the other hand has vehemently contested all the arguments addressed by the plaintiff thereby taking a categoric stand that the plaintiff has utterly failed to prove its case in as much as it has failed to provide complete and specific details of the goods supplied and the payments made, which he was obligated to under the provisions of CPC and as such, the plaint on which the claim is made lacks in material particulars. It has been vehemently argued that the goods supplied under the invoice in question were not only defective but also unsatisfactory and the defendant was duly informed of the same defects on which he has even assured that the goods shall be taken back and the amounts pertaining to the invoice would be duly adjusted against future orders. Ld. counsel has argued that the institution of the present suit based on said invoice is therefore an CS (Comm.) No. 494/2025 Vivek Sarda Vs. Saurabh Khandelwal Page no. 14 of 34 Digitally signed MUKESH by MUKESH KUMAR GUPTA KUMAR Date:
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abuse of process of law for which the plaintiff is liable to be even penalized by exemplary costs. Ld. counsel has vehemently argued that the defendant has made full and final payment of all goods received in satisfactory condition and nothing remains to be due. He has further argued that even otherwise, the suit being based on the Ledger Account Ex.PW1/3 cannot be substantiated in the absence of the Accountant who has prepared the statement being examined before the Court, which the plaintiff has utterly failed to do. On the aspect of territorial jurisdiction, Ld. counsel has vehemently argued that the defendant is residing and carrying on his business at Noida, Uttar Pradesh and all the transactions between the parties including the alleged supply of goods had taken place in Noida only and no part of cause of action has even arisen within the jurisdiction of this Court and as such, the suit is liable to be dismissed on this very ground. Ld. counsel Sh. Pahuja for the defendant, while refuting the interest claimed, has said the same to be not only excessive arbitrary but also usurious against the settled principle of law. It has been stated that even if any interest is deemed to be payable, the same ought to have been calculated at reasonable rates in accordance with Section 3 of Interest Act, 1978 and not in an exaggerated or punitive manner. Ld. counsel, refuting any liability of the defendant or any interest on such liability as claimed, has finally prayed for dismissal of the suit with exemplary costs.
(H) ANALYSIS & DETERMINATION:-
16. I have heard the arguments addressed by the Ld. Counsels for the parties, perused the entire record including the oral and documentary evidence. I have given a thoughtful consideration to the same. My issue- wise determination is as under: -
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Issue No.2: (2)Whether this court has no territorial jurisdiction to try and entertain the suit ? OPD
17. For the sake of convenience, the Court shall take up this issue first. The onus of proving this issue has been held upon the defendant, who has taken a preliminary objection in his Written Statement that this Court lacks territorial jurisdiction to entertain the present suit on the plea that the defendant resides and carries on business in Noida, Uttar Pradesh, and that all transactions between the parties, including the alleged supply of goods, have taken place at Noida only. He has asserted that thus no part of the cause of action has arisen within the territorial jurisdiction of this Court. These contentions have been specifically denied by plaintiff.
18. If the aforesaid contentions are carefully examined in the light of evidence adduced by parties, it may be seen that the present suit for recovery of outstanding amount of Rs.9,85,474/- is in respect of supply of Slabs Marbel, supplied by the plaintiff to the defendant, vide the invoice dated 05.07.2022 Ex.PW1/1. This invoice, issued by the plaintiff to the defendant, categorically shows that the goods were supplied by the plaintiff to the defendant's office NOIDA Buildwell situated at NOIDA, Uttar Pradesh while the buyer of the said goods has been mentioned as NOIDA Buildwell, situated at First Floor, 3752, Loha Wali Gali, Main Chawri Bazar, New Delhi, which is admittedly the Principal Office of the defendant situated at Delhi as evident from the GST record exhibited as Ex.DW/PX1 as also his MSME Registration Certificate and also duly affirmed by the defendant during his cross-examination. Section 20(a) of the CPC inter alia provides that a suit shall be instituted in a Court within the local limits of whose jurisdiction the defendant, at the time of commencement of the suit, carries on business or personally works for CS (Comm.) No. 494/2025 Vivek Sarda Vs. Saurabh Khandelwal Page no. 16 of 34 Digitally signed MUKESH by MUKESH KUMAR GUPTA KUMAR Date:
GUPTA 2026.04.28 16:32:52 +0530 gain. The Explanation appended thereto clarifies that, in the case of a corporation, it shall be deemed to carry on business at its sole or principal office in India, and also at a place where it has a subordinate office, provided the cause of action has arisen at such place. The import of this provision is further elucidated by Illustration (a), which demonstrates that jurisdiction is not confined to a single jurisdiction but may vest in more than one Court depending upon the facts giving rise to the cause of action. For ready reference the said illustration is reproduced hereinunder: -
Illustrations
(a) A is a tradesman in Calcutta, B carries on business in Delhi. B, by his agent in Calcutta, buys goods of A and requests A to deliver them to the East Indian Railway Company. A delivers the goods accordingly in Calcutta. A may sue B for the price of the goods either in Calcutta, where the cause of action has arisen, or in Delhi, where B carries on business. (emphasis added)
19. Thus, the principle that emerges is that where a part of the cause of action arises at one place and the defendant carries on business at another, both Courts would have concurrent territorial jurisdiction. The provision is intended to afford flexibility to the plaintiff, enabling institution of the suit at a place having a real and substantial nexus either with the cause of action or with the defendant. At the same time, it ensures that the defendant is not subjected to a forum wholly unconnected with the transaction in question. Thus, it becomes evident that even if certain transactions or deliveries have taken place at a particular location, the Court within whose jurisdiction the defendant carries on business would also be duly competent to entertain the suit. Therefore, the objection as to lack of territorial jurisdiction must be tested on the touchstone of whether any part of the cause of action has arisen within the jurisdiction of the Court or whether the defendant CS (Comm.) No. 494/2025 Vivek Sarda Vs. Saurabh Khandelwal Page no. 17 of 34 Digitally signed MUKESH by MUKESH KUMAR GUPTA KUMAR Date:
GUPTA 2026.04.28 16:32:57 +0530 carries on business within such jurisdiction, and if either condition is satisfied, the Court would be vested with the jurisdiction to adjudicate the matter.
20. In the instant suit, it is an undisputed fact that goods mentioned in the invoice Ex.PW1/1 has been duly supplied by the plaintiff to the defendant's office situated at NOIDA, however at the same time, the invoice Ex.PW1/1 specifies that the buyer of the goods supplied by the plaintiff has been mentioned as NOIDA Buildwell, situated at First Floor, 3752, Loha Wali Gali, Main Chawri Bazar, New Delhi. This fact is further corroborated by the defendant's GST record, Ex.DW/PX1 and even his MSME registration which shows that the Principal Office of the defendant is situated at Delhi. The defendant, during his cross- examination, has also conceded that the aforesaid address is the registered address of his business firm having no other GST registration except the one mentioned in the aforesaid GST record Ex.DW/PX1. Since the principal office is situated within the jurisdiction of this Court in Central District, this Court at Delhi shall also have jurisdiction to adjudicate upon the claim of the plaintiff. It is a well-settled principle of civil jurisprudence that the plaintiff is dominus litis, i.e., the master of the suit. This principal implies that the plaintiff has the prerogative to choose the forum and the parties against whom relief is sought, subject, of course, to the limitations imposed by law. The principle of dominus litis operates within the framework of the CPC, particularly in the context of territorial jurisdiction under Section 20 where more than one court has jurisdiction either because the cause of action arises wholly or in part within its jurisdiction, or because the defendant resides or carries on business therein it is the plaintiff who has the discretion to choose any CS (Comm.) No. 494/2025 Vivek Sarda Vs. Saurabh Khandelwal Page no. 18 of 34 Digitally signed MUKESH by MUKESH KUMAR GUPTA KUMAR Date:
GUPTA 2026.04.28 16:33:03 +0530 one of such competent courts for instituting the suit. Thus, the settled position is that where two or more courts have concurrent jurisdiction, the plaintiff, being dominus litis, is entitled to choose the forum as convenient to him, and such choice cannot be ordinarily interfered with, unless it is shown that the chosen court lacks jurisdiction or that the suit has been filed in abuse of the process of law which is not the case herein. In the instant case, the defendant has utterly failed to prove by way of any cogent evidence that only the Courts in NOIDA have exclusive territorial jurisdiction, and this Court lacks jurisdiction, to adjudicate upon the present suit.
21. Furthermore, it is pertinent to note that the invoice Ex. PW1/1 contains a specific stipulation at its bottom, namely "SUBJECT TO DELHI JURISDICTION" which clearly reflects the intention of the parties to confer jurisdiction upon the Courts at Delhi for adjudication of any dispute arising between them. Significantly, the said invoice bears the signature of the authorized signatory of the defendant, thereby indicating his acceptance of the terms and conditions contained therein, including the jurisdiction clause. Such a contractual clause reflects the consensual choice of forum between the parties, limiting jurisdiction to the Courts at Delhi, where otherwise two or more Courts may have concurrent jurisdiction. It is further relevant that nothing contrary to the aforesaid jurisdiction clause has been cogently or satisfactorily proved by the defendant. In the absence of any credible evidence to displace or challenge the said contractual stipulation, the same not only holds good but is binding on the parties.
22. Interestingly, the defendant has also made on account payments on CS (Comm.) No. 494/2025 Vivek Sarda Vs. Saurabh Khandelwal Page no. 19 of 34 Digitally signed MUKESH by MUKESH KUMAR GUPTA KUMAR Date:
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the plaintiff as per the admitted case of defendant from his bank account situated at Chawri Bazar, Delhi and not from Noida. The invoice Ex.PW1/1 further reflects that even bank account of the plaintiff's company is maintained at SBI, Rajouri Garden Branch Delhi and as per the ledger Ex.PW1/3 of the plaintiff, the defendant has made payments therein which means that the payments in respect of the supplied goods have been received by the plaintiff at Delhi. The Hon'ble Delhi High Court in Shrada Wassan and Ors. Vs. Anil Goel and Anr. 2009 SCC Online Del 1285, after examining a number of judgments has also succinctly held that when the money is expressly or impliedly payable under a contract and payments are to be made at Delhi, or received as such, a part of cause of action arises. Relying upon the pronouncement of law laid down by Hon'ble Supreme Court in A.B.C Laminart Pvt. Ltd. Vs. A.P. Agencies, (1989), 2 SCC 163, the Hon'ble court has even laid down that if a demand of the payment, preceding the suit, was made from Delhi for payments at Delhi, the principle of debtor must seek the creditor applies with the exception of a promissory notes. The principle is applied in respect of payments made by the defendant or received at the place of plaintiff under an express or implied contract and unless there is a clear ouster of jurisdiction. This principle was succinctly followed in subsequent judgments of our own Hon'ble High Court in TKW Management Solutions Pvt. Ltd. Vs. Sherif Cargo and Anr. (2023) SCC Online Del. 593, and Transasia Solutions Pvt. Ltd. Vs. Sherif Cargo and Anr., (2023) SCC Online Del. 593, by holding the jurisdiction of courts at Delhi on the ground that the payments were received in Delhi.
23. Applying the aforesaid legal principal to the facts of the present CS (Comm.) No. 494/2025 Vivek Sarda Vs. Saurabh Khandelwal Page no. 20 of 34 Digitally signed MUKESH by MUKESH KUMAR GUPTA KUMAR Date:
GUPTA 2026.04.28 16:33:15 +0530 case, it may be seen from the ledger account Ex.PW1/3 that the defendant has made on-account part payments to the plaintiff in multiple tranches, namely Rs.7,78,047/- on 29.08.2022, Rs.5,00,000/- on 08.12.2022 and Rs.2,00,000/- on 19.05.2023 in addition to a nominal test payment of Rs.100 paid on 29.08.2022. This fact of part payment has also been duly admitted by the defendant during his cross-examination as DW1 being made by the defendant from his bank ICICI situated at Chawri Bazar, Delhi-110006. In such circumstances, since the payments are received by the plaintiff in his bank account, maintained in SBI Branch, Delhi, the Courts in Delhi have the territorial jurisdiction to adjudicate upon the present suit. As evident from the GST record exhibited as Ex.DW/PX1, and the MSME Certificate, the Principal Office of the defendant, NOIDA Buildwell, is situated at First Floor, 3752, Loha Wali Gali, Main Chawri Bazar, New Delhi, which is well within the territorial jurisdiction this Court. As such, the Court has the territorial jurisdiction to adjudicate upon and decide the claim of the plaintiff in the instant suit.
24. Thus, taken on the yardstick of preponderance of probabilities and on the basis of the aforesaid discussion, this issue of territorial jurisdiction is accordingly, decided against the defendant and in favour of the plaintiff.
Issue No. 1&3: (1)Whether the goods supplied by the plaintiff were found to be defective and unsatisfactory, if so, its effect? OPD (3) Whether the plaintiff is entitled to recovery of Rs.9,85,474/- against the defendant as claimed in the suit? OPP
25. The onus of proving issue No.1 is on the defendant while that of issue no. 3 is on the plaintiff. These issues are taken together as they are CS (Comm.) No. 494/2025 Vivek Sarda Vs. Saurabh Khandelwal Page no. 21 of 34 Digitally signed MUKESH by MUKESH KUMAR KUMAR GUPTA Date: 2026.04.28 GUPTA 16:33:24 +0530 not only pivotal of the entire lis but are also inextricably interconnected. The evidence led is also common. These issues relate to entitlement of the plaintiff on one hand and the defence of the defendant on the other and the result of one will automatically affect the outcome of the other. For issue No.1, the defendant has, in his written statement, taken the defence that the goods supplied under invoice Ex. PW1/1 were defective, unsatisfactory, and contrary to the representations and assurances of the plaintiff. This plea has been specifically denied by the plaintiff in the replication. As the supply being defective has been categorically denied, the burden squarely lay upon the defendant to prove the alleged defects by leading succinct and cogent evidence.
26. Imperatively, it is the duty of the defendant to inform the plaintiff about the defects in the supplied goods by way of a proper and verifiable communication. In the present case, the defendant in the Written Statement has not only raised the plea of supply of defective goods by the plaintiff but has also contended that he has duly informed the plaintiff about the same on which the plaintiff has assured the defendant for return of the supplied goods as well as adjustment of respective amount against the future orders. Pertinently, the defendant has not disputed the delivery of goods but has only disputed the quality thereof. However, the testimony of DW1 is marred by contradiction on the aspect of defective supply. DW1 has, though, reiterated the said plea during his deposition, however, he has failed to produce any cogent evidence to substantiate the same. Neither any written communication nor any email has been placed on record by the defendant to show that the defendant has ever raised any grievance regarding the quality of goods supplied under invoice Ex. PW1/1. This omission has, interestingly, been also expressly admitted by CS (Comm.) No. 494/2025 Vivek Sarda Vs. Saurabh Khandelwal Page no. 22 of 34 Digitally signed MUKESH by MUKESH KUMAR KUMAR GUPTA Date: 2026.04.28 GUPTA 16:33:31 +0530 DW1 during the course of his cross-examination.
27. Further, DW1 has categorically admitted that no goods were ever returned to the plaintiff and that no debit note was raised in respect of the alleged defective goods. The defendant has also failed to specify the quantity, nature, or extent of the alleged defects, either in the written statement or during the course of evidence. Such vague and unsubstantiated assertions do not inspire confidence and fall short of the standard required to discharge the burden of proof. It is also noteworthy that the defendant has even continued to make on-account part payments to the plaintiff for the period between 29.08.2022 and 19.05.2023. As reflected in the ledger account Ex. PW1/3, the defendant has made part payments in three tranches i.e. Rs.7,78,047/- on 29.08.2022, Rs.5,00,000/- on 08.12.2022 and Rs.2,00,000/- on 19.05.2023 besides a test payment of Rs.100/- paid on 29.08.2022. The defendant has duly admitted the factum of part payment during his cross-examination as DW1. As such, conduct of the defendant is completely inconsistent with the plea that the goods supplied were defective, an inconsistency which has also been not explained by any plausible reason. If the supplied goods were defective or required to be returned, it was reasonably expected for the defendant to ask for adjusting either the aforesaid amount or exchange the defective goods with fresh goods before making any payment. Even if the best case of the defendant is taken that the same was never asked for, even then there is no statement of account of defendant to show the return of the goods. Moreover, the defendant has not initiated any independent legal proceedings, such as filing of a suit, counterclaim, or complaint before any competent authority, in respect of the alleged defective goods. In these circumstances, the defendant has CS (Comm.) No. 494/2025 Vivek Sarda Vs. Saurabh Khandelwal Page no. 23 of 34 Digitally signed MUKESH by MUKESH KUMAR GUPTA KUMAR Date:
GUPTA 2026.04.28 16:33:35 +0530 failed to furnish any cogent or plausible explanation for not raising timely objections or taking appropriate remedial steps. The defence, therefore, appears to be a mere bald assertion and an afterthought, lacking any credible evidentiary support, to avoid payment.
28. Thus, in the absence of any clear and cogent evidence of the defendant in this regard and taken on the yardstick of preponderance of probabilities, the Court is of the considered view that the defendant has failed to discharge the onus in respect of issue No. 1.
29. Before adverting to the entitlement of the plaintiff to the suit amount, the Court shall first take up the issue of limitation which is a legal issue, which the court is required to determine for the purpose of deciding the entitlement of plaintiff to the relief claimed. As per Section 3 of the Limitation Act, 1963, any suit, application or appeal has to be filed within the period of limitation as prescribed under the schedule annexed to the Limitation Act and subject to provisions contained in Section 4 to 24. This has to be done irrespective of the fact whether limitation has been set up as a defence or not. It is a settled proposition of law that law of limitation is a law of repose, peace and justice which bars the remedy after the lapse of particular period by way of public policy and expediency. Further, it is obligatory on the part of the court to dismiss a suit or appeal if the same is made after the prescribed period, even though limitation is not set up as a defence or there is no plea regarding issue of limitation. Reliance is placed on (2011) 3 SCC 436 State of Orissa vs. Mamta Mohanty. It may be seen the present suit pertains to the recovery of an outstanding amount alleged to be due from the defendant towards goods supplied by the plaintiff. The plaintiff's case CS (Comm.) No. 494/2025 Vivek Sarda Vs. Saurabh Khandelwal Page no. 24 of 34 Digitally signed by MUKESH MUKESH KUMAR GUPTA KUMAR Date:
2026.04.28 GUPTA 16:33:41 +0530 is founded upon the invoice, Ex. PW1/1, bearing Invoice No. BGN/010/2022-23 dated 05.07.2022 for a sum of Rs.20,28,871/- stated to have been raised pursuant to an order placed by the defendant. The plaintiff has further relied upon the Ledger Account Ex. PW1/3, reflecting the debit and credit entries of transactions between the parties. In terms of Article 14 of the Schedule annexed to the Limitation Act, 1963, the period of limitation for the price of goods sold and delivered, where no fixed period of credit is agreed upon, is 3 years from the date of delivery of goods. In the instant case, the invoice Ex.PW1/1 has been raised by the plaintiff on 05.07.2022 against the defendant. If the court considers the date of invoice Ex.PW1/1 which is of dated 05.07.2022 for the purpose of reckoning the limitation, the present suit should have been filed on or before 05.07.2025. Accordingly, the present suit, having been filed on 28.04.2025, falls well within the prescribed period of limitation.
30. Now, the claim of the plaintiff and defence of the defendant is based on contesting claims, one is that of the plaintiff who has claimed to have supplied goods i.e. slabs marble to the tune of Rs.20,28,871/- in total vide invoice dated 05.07.2022 Ex.PW1/1 against which the defendant has made a part payments in three tranches i.e. Rs.7,78,047/- on 29.08.2022, Rs.5,00,000/- on 08.12.2022 and Rs.2,00,000/- on 19.05.2023 besides a test payment of Rs.100/- paid on 29.08.2022 leaving an outstanding balance of Rs.5,50,724/- as principal amount in its ledger Ex.PW1/3 which the plaintiff has claimed with interest amounting to Rs.4,34,750/- as per Section 16 of MSMED Act, 2006. On the other hand, the defendant has claimed that plaintiff has not only failed to give complete and specific details regarding the alleged supplied goods but also supplied the defective goods to the defendant. Now while the CS (Comm.) No. 494/2025 Vivek Sarda Vs. Saurabh Khandelwal Page no. 25 of 34 MUKESH Digitally by MUKESH signed KUMAR KUMAR GUPTA Date: 2026.04.28 GUPTA 16:33:47 +0530 plaintiff is required to establish its claim by way of credible and cogent evidence and once established, the defendant on the other hand is required to rebut the liability by establishing its defence in the same manner. The Court has to accordingly examine the same in the light of the pleadings, evidence on record, and the settled principles of law governing commercial disputes.
31. It may be seen that the controversy between the parties lies within a narrow compass and primarily revolves around the factum of supply of defective goods which has already been decided in the earlier paragraphs.
32. Accordingly, moving ahead, perusal of pleadings and documents relied upon by the parties show that the claim of the plaintiff is based on the Ledger Accounts for the Financial Year 2022-2025, maintained by the plaintiff in ordinary course of his business. This Ledger Account has been duly proved by the plaintiff as Ex.PW1/3. The total principal amount due and outstanding as per the Ledger Account is Rs. 5,50,724/- against the defendant. Section 28 of Bhartiya Sakshya Adhiniyam, 2023 (Section 34 of Indian Evidence Act, 1872) provides that entries made in books of account including those maintained in electronic form are relevant when they are maintained in the ordinary course of its business, but such statement shall not alone be sufficient to charge any person with liability.
In simple words, these Ledger or Statement of Accounts so maintained are required to be corroborated by the plaintiff by way of other corroborating evidence for fastening a liability on the defendant. Reliance placed on (2000) 1 SCC 434 Ishar Dass Jain (Dead) through LR's Vs. Sohan Lal (Dead) by LR's. To corroborate the Ledger Account Ex.PW1/3, the plaintiff has produced and duly proved the tax CS (Comm.) No. 494/2025 Vivek Sarda Vs. Saurabh Khandelwal Page no. 26 of 34 Digitally signed MUKESH by MUKESH KUMAR GUPTA KUMAR Date:
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invoice raised by the plaintiff to the defendant vide Ex.PW1/1. This invoice contains the invoice number, the date as well as the address of the defendant as consignee as admitted by DW1 in his cross-examination. Further, the corresponding outstanding amount of the aforesaid invoice is clearly reflected in the said ledger account. The Ledger Account also reflects the part payments made by the defendant in three tranches. A careful scrutiny of the Ledger Account Ex.PW1/3 clearly shows that the defendant has already paid Rs.14,78,047/- in three tranches leaving an outstanding balance of Rs.5,50,724/- towards principal besides Rs.4,34,750/- calculated as interest as per the MSMED Act, 2006. The defendant has only vaguely disputed the outstanding liability on the ground that the plaintiff has supplied the defective goods which has already been decided in the foregoing paragraphs.
33. Further, for establishing sale and delivery of goods, the law is governed by Sale of Goods Act, 1930, Carriage by Road Act, 2007 and Carriage by Road Rules, 2011 and the plaintiff has to prove delivery by any of the following methods: -
i. admission by defendant or defendant acknowledges the delivery, or ii. endorsement of receipt by the defendant or his authorized representative on the invoice/invoices, or iii. filing and proving Form 7 or Form 8 (Bilty) under Carriage by Road Rules, 2011 to show that plaintiff delivered the goods to the carrier and is entitled to benefit under Section 39 of SoGA, or iv. by proving on record that the GST claimed to have been deposited by the plaintiff qua the invoices, i.e. defendant took input tax credit under Section 2 (63) of CGST Act, CS (Comm.) No. 494/2025 Vivek Sarda Vs. Saurabh Khandelwal Page no. 27 of 34 Digitally signed MUKESH by MUKESH KUMAR GUPTA KUMAR Date:
GUPTA 2026.04.28 16:33:57 +0530 2017 and plaintiff is entitled to presumption under Section 16 (2) of CGST Act, 2017.
34. Applying the aforesaid legal principles to the facts of present case, it may be seen that DW1 in his cross-examination has not been denied that the goods pertaining to the invoice Ex.PW1/1 has been duly delivered by the plaintiff to the defendant. Furthermore, the goods were supplied through carriage for which e-way bill Ex.PW1/2 and the tax invoice Ex.PW1/1 have been raised by plaintiff. The invoice Ex.PW1/1 bears the signature of Shri Saurabh Khandelwal as Authorized Representative, of the defendant's firm, which is interestingly same as the signature appended on the Written Statement as well as Defendant Evidence. Thus, it cannot be denied that the goods were in fact delivered and received by the defendant. Furthermore, the defendant has also not denied the aspect of not receiving the goods either in his pleadings or in his testimony or cross examination. As such, the plaintiff has duly proved the delivery of the goods mentioned in the aforesaid invoice Ex.PW1/1 to the defendant by all of the above modes and in such circumstances, the only question which remains before the Court whether the plaintiff has been able to prove the existence of an outstanding liability of Rs.5,50,724/- against the defendant.
35. For this purpose, the plaintiff has relied upon the ledger account for financial year 2020-2023 Ex. PW1/3 maintained by him in the ordinary course of business. The evidentiary value of such ledger entries must be assessed in conjunction with the invoice placed on record. The ledger reflects a continuous course of dealings between the parties and is consistent with the transaction evidenced by the invoice Ex.PW1/1. It is pertinent to mention here that the entries mentioned in the ledger account CS (Comm.) No. 494/2025 Vivek Sarda Vs. Saurabh Khandelwal Page no. 28 of 34 Digitally signed MUKESH by MUKESH KUMAR GUPTA KUMAR Date:
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Ex.PW1/3 are not isolated or sporadic but form part of a systematic and regular accounting practice mentioning even the on account payment made by defendant. It is also significant that no contradiction or discrepancy has been pointed out by the defendant in respect of these entries. Further, the defendant has not been able to succinctly challenge the correctness of ledger Ex.PW1/3 nor produced any alternative account with corroborative evidence to dispute the same. In such circumstances, the ledger Ex.PW1/3 being maintained in the ordinary course of business and corroborated by documentary evidence, deserves to be accepted as reliable in respect to the other remaining entries. Thus, the plaintiff has been able to prove his entitlement to an extent of Rs.5,50,724/- on the amount outstanding against the defendant and shall be entitled to recover the same from the defendant.
36. Now, once the plaintiff has discharged its onus by proving supply of goods and the corresponding liability through documentary evidence, it is for the defendant to show that either such liability has been discharged by way of payment or that no such liability has been made out against him by way of clear and cogent evidence refuting the case of the plaintiff, more so, when in commercial disputes, the transactions particularly of a substantial amount are evidenced through documents.
37. In view of the aforesaid discussion and findings, this Court is of the considered opinion that the plaintiff has been able to establish its case on the yardstick of preponderance of probabilities. The plaintiff has proved its entitlement to an extent of Rs.5,50,724/- on the amount outstanding against the defendant and the defendant has utterly failed to prove its defence which is found to be vague, unsubstantiated, unsupported by evidence which is rather mutually self-destructive. CS (Comm.) No. 494/2025 Vivek Sarda Vs. Saurabh Khandelwal Page no. 29 of 34 Digitally signed MUKESH by MUKESH KUMAR GUPTA KUMAR Date:
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38. Now adverting to the entitlement of the plaintiff to the interest amount of Rs.4,34,750/-, it may be seen that the plaintiff has claimed interest at the rate of 19.5% per annum on account of delayed payment by the defendant, and has computed the same as Rs. 4,34,750/-. The claim has been contested by the defendant on the grounds that no detailed or substantiated computation has been furnished, the rate of interest is usurious and unconscionable, and in the absence of any agreement stipulating such a rate the claim is untenable, and that, in any event, any interest found payable ought to be awarded at a reasonable rate in terms of Section 3 of the Interest Act, 1978.
39. If the aforesaid contentions are carefully perused, it may be seen that the plaintiff's firm, M/s Balaji Granimarmo, stands registered as an MSME under the MSMED Act, as evidenced by the MSME Udyam Registration Certificate (Ex. PW1/4) bearing registration no. UDYAM- DL-11-0113179. Further, the defendant, in his cross-examination, has categorically admitted that his firm, namely M/s NOIDA Buildwell, is also registered as an MSME under the said Act. Consequently, both parties are governed by the provisions of the MSMED Act, 2006.
40. The primary object of the MSMED Act is to promote, develop, and enhance the competitiveness of micro, small, and medium enterprises (MSMEs) in India. The Act provides a comprehensive legal framework and addresses issues relating to credit and policy intervention besides ensuring timely payment of dues to ensure liquidity of MSME. Section 15 of the Act mandates that where a supplier provides goods or services, the buyer is required to make payment on or before the date agreed upon in writing between the parties. In the absence of such an agreement, payment must be made before the "appointed day." In any event, even CS (Comm.) No. 494/2025 Vivek Sarda Vs. Saurabh Khandelwal Page no. 30 of 34 Digitally signed MUKESH by MUKESH KUMAR GUPTA KUMAR Date:
2026.04.28 GUPTA 16:34:14 where a written agreement exists, the payment period cannot exceed forty-five days from the date of acceptance or deemed acceptance of the goods or services. Further, Section 16 of the MSMED Act provides that where a buyer fails to make payment to an MSME supplier within the period prescribed under Section 15, the buyer becomes liable to pay compound interest on the delayed amount at a rate three times the bank rate notified by the Reserve Bank of India (RBI), with monthly rests, from the due date or the date of deemed acceptance, as the case may be. The said liability is mandatory in nature and operates notwithstanding any agreement to the contrary or any other law for the time being in force, thereby rendering any contractual stipulation or existence of any other statutory provision to the contrary ineffective. Further, the right of the supplier, to claim interest in terms of Section 16, is not contingent upon the nature of remedial proceedings undertaken by the supplier to effectuate recovery of the principal and/ or the interest due to him. Reliance is placed upon Indian Highways Management Company Limited Vs. Sowil Limited, 2022:DHC:815-DB.
41. In the present case, as decided above, the plaintiff has duly supplied the goods to defendant and raised the invoice dated 05.07.2022 Ex.PW1/1 in respect thereof. The ledger account Ex.PW1/3 reflects a sum of Rs. 4,34,750/- towards interest on account of delayed payment, calculated in terms of Section 16 of the MSMED Act. It is pertinent to note that although the defendant has taken a plea in the Written Statement that the plaintiff has not furnished any detailed or substantiated computation of interest and that the rate claimed is usurious and unconscionable, the defendant has failed to lead any cogent evidence in support of the said plea. Nothing has been brought on record to CS (Comm.) No. 494/2025 Vivek Sarda Vs. Saurabh Khandelwal Page no. 31 of 34 Digitally signed MUKESH by MUKESH KUMAR GUPTA KUMAR Date:
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demonstrate that the computation of interest by the plaintiff is contrary to the bank rate notified by the Reserve Bank of India at the relevant point of time. Moreover, the correctness and accuracy of the computation of interest as reflected in the ledger account Ex. PW1/3 has not been specifically disputed by the defendant, either in the Written Statement or during the course of his testimony. In the absence of any specific challenge or rebuttal, the said computation cannot be termed as false or inaccurate.
42. In so far as the contention of the defendant that, in the absence of any agreement between the parties stipulating such interest, the same ought to be awarded in accordance with Section 3 of the Interest Act, 1978 is concerned, the same is also devoid of any merit. As already discussed herein above, both parties being registered MSMEs are governed by the provisions of the MSMED Act, and the statutory mandate under Section 16 thereof operates notwithstanding any agreement to the contrary or any other law for the time being in force.
Accordingly, the plea of the defendant seeking application of Section 3 of the Interest Act, 1978 cannot be sustained in the eyes of law and is hereby rejected.
43. Thus, taken on the yardstick of preponderance of probabilities, the plaintiff is also entitled to the interest amount of Rs.4,34,750/- as claimed by him in the ledger account Ex.PW1/3. As such, the plaintiff is entitled to the recover the entire suit amount of Rs.9,85,474/- from the defendant.
44. Accordingly, Issue No.1 is decided against the defendant and in favour of the plaintiff, while Issue No. 2 is decided in favour of the CS (Comm.) No. 494/2025 Vivek Sarda Vs. Saurabh Khandelwal Page no. 32 of 34 Digitally signed MUKESH by MUKESH KUMAR KUMAR GUPTA Date: 2026.04.28 GUPTA 16:34:25 +0530 plaintiff and against the defendant.
Issue No. 4: (4) Whether the plaintiff is entitled to any interest on such amount, if so, at what rate and for what period? OPP
45. The onus of proving this issue has been held upon the plaintiff, who, as discussed above, has duly proved his right to charge and claim compound interest at monthly rest at a rate three times the bank rate notified by the RBI, in terms of Section 16 of the MSMED Act. As per the current prevailing RBI bank rate of 5.50%, three times thereof comes to 16.5%. Accordingly, the plaintiff shall be entitled to the interest at the rate of 16.5% per annum on the outstanding amount pendente lite and future from the date of filing of suit till its realization on compound basis.
Issue no.5: Relief
46. In view of the aforesaid discussions and finding of the court on the aforesaid issues, the court is of the considered opinion that the plaintiff has been able to successfully prove its entitlement to the reliefs as discussed above. The suit of the plaintiff is, accordingly decreed against the defendant for a sum of Rs.9,85,474/- with pendentlite and future interest @ 16.5% per annum on compound basis.
47. The suit of the plaintiff is accordingly decreed with interests as determined above.
48. In the specific facts and circumstances of the case, plaintiff shall also be entitled to the costs of the suit throughout.
49. Decree sheet be drawn accordingly.
CS (Comm.) No. 494/2025 Vivek Sarda Vs. Saurabh Khandelwal Page no. 33 of 34
Digitally signed
MUKESH by MUKESH
KUMAR KUMAR GUPTA
Date: 2026.04.28
GUPTA 16:34:37 +0530
50. File be consigned to record room after due completion.
Pronounced in Open Court today on this 28th day of April, 2026 MUKESH Digitally by MUKESH signed KUMAR KUMAR GUPTA Date: 2026.04.28 GUPTA 16:34:43 +0530 (Mukesh Kumar Gupta) District Judge (Commercial Court) -07 Central District, THC, Delhi 'ak' CS (Comm.) No. 494/2025 Vivek Sarda Vs. Saurabh Khandelwal Page no. 34 of 34