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[Cites 9, Cited by 0]

Delhi District Court

M/S Servotech Power Systems Pvt. Ld vs Ms. Shashi Kala Hegde on 17 March, 2023

        IN THE COURT OF MS. RUCHIKA SINGLA,
     ADDL. DISTRICT JUDGE-03, NORTH-WEST DISTT.,
                ROHINI COURTS, DELHI


CS No.           : 77507/16

In the matter of:
M/s Servotech Power Systems Pvt. Ld.
At 806, 8th Crown Heights Hotel Crown Plaza,
Sector-10, Rohini, New Delhi-110088

                                                                       ........ Plaintiff


                                   VERSUS

Ms. Shashi Kala Hegde
Prop. M/s Siddhartha Enterprises
269,4th Cross, 80 Ft Road,
II Stage, RMV Extension,
Bangalore-560094,
Karnataka
                                                                 ........ Defendant

Date of institution                                          :     04.09.2015
Date on which judgment was reserved                          :     13.03.2023
Date of pronouncement of the judgment                        :     17.03.2023



                               JUDGMENT

Suit For Recovery Of Rs.36,65,970/- with Pendentelite and Future Interest Till Realisation

1) By this judgment, I shall decide the present suit for recovery of Rs.36,65,970/- with pendentelite and future interest till realisation.

CS DJ 77507/16 Servotech Power Systems Vs. Shashi Kala Hegde Page 1 of 18

2) Briefly stated the facts of the case as alleged by the plaintiff are that the plaintiff is a private limited company duly incorporated under the Companies Act. The present suit has been filed on behalf of the company through Sh.Nimesh Malhotra who has been duly authorized in this regard vide resolution dated 28.08.2015. It is stated that the plaintiff is dealing in the business of manufacturing and trading of power conditioning systems, batteries and other electrical products. The defendant is the proprietor of M/s Sidhartha Enterprises. The defendant approached the plaintiff for supply of certain products. In this regard, the defendant placed purchase order dated 196/12-13 and another purchase order no. L 196/12-13 both dated 25.07.2012 for goods worth Rs. 8,94,450/- and Rs. 14,86,050/- with the plaintiff.

3) These goods were duly supplied by the plaintiff to the defendant vide consignment note dated 26.07.2012 and 27.07.2012. For the payment of these goods, the defendant issued two cheques bearing no. 569619 and 569620 both dated 05.09.2012 for a sum of Rs.8,94,450/- and Rs. 14,86,050/- drawn on State Bank of Mysore, Banglore but these cheques were dishonoured vide return memos dated 06.09.2012. Thereafter the plaintiff requested the defendant to clear the bills but the same was not done. Finally, the plaintiff issued the legal notice dated 14.09.2012 against the defendant and when the payment was not made by the defendant, the plaintiff filed the present suit for the recovery of the outstanding amount of Rs. 23,80,500/-. The plaintiff has also charged interest @ 18% per annum w.e.f 05.09.2012 till 26.04.2015 which is Rs. 12,85470/-.

CS DJ 77507/16 Servotech Power Systems Vs. Shashi Kala Hegde Page 2 of 18

4) Summons of the suit were served upon defendant but the defendant was proceeded against ex-parte vide order dated 31.01.2018. Thereafter, the defendant moved an application U/o 9 Rule 7 CPC which was disposed off with directions to the defendant that she was at liberty to join the proceedings as and when she appears before this court. Further it was noted that the defendant did not move any application seeking permission to file the WS. Hence, as such there is no WS on record filed by the defendant. Thereafter, the matter was adjourned for PE.

5) In his evidence, the plaintiff examined AR of the plaintiff as PW-1 and he tendered his evidence by way of affidavit, which is exhibited as Ex.PW1/A. He relied upon the following documents in his evidence:-

1) The copy of the Certificate of Incorporation of the plaintiff company is Ex. PW-1/1.
2) Copy of Certificate of incorporation dt. 24.05.2017 is Ex. PW- 1/2.
3) The copy of Board of Resolution as Ex. PW-1/3.
4) Retail Invoice dt. 26.07.2012 for Rs. 8,94,450/- is exhibited as Ex. PW-1/4.
5) Retail Invoice dt. 26.07.2012 for Rs. 14,86,050/- is exhibited as Ex. PW-1/5.
6) The Consignment Note dt. 26.07.2012 is exihibited as Ex. PW- 1/6.
7) The Consignment Note dt. 27.07.2012 is Ex. PW-1/7.
8) Cheque no. 569619 for Rs. 8,94,450/- is Ex. PW-1/8.
9) Cheque no. 569620 for Rs. 14,86,050/- is Ex. PW-1/9.
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10) Document as per Indian Evidence Act and email dt. 28.07.2012 is exhibited as Ex. PW-1/10.

11) Affidavit under Section 65 B of Evidence Act is exhibited as Ex. PW-1/11.

12) Cheque returning Memo dt. 06.09.2012 is exhibited as Ex. PW-1/12.

13) Legal notice dt. 14.09.2012 is exhibited as Ex. PW-1/13.

14) The postal receipt is exhibited as Ex. PW-1/14.

15) The said AD Card is exhibited as Ex. PW-1/15.

16) Reply dt. 29.09.2012 is exhibited as Ex. PW-1/16.

6) In view of separate statement made on behalf of AR of the plaintiff, PE was closed vide order dated 03.12.2018.

7) Arguments have been advanced by both the parties. I have already heard arguments from Sh. Kamal Gupta, Ld. Counsel for plaintiff and Sh.Mani Mittal, Ld. Counsel for the defendant and gone through the record.

8) Before going into the merits of the case, there are certain legal objections which have been raised by Ld. Counsel for the defendant. Firstly, it is argued by the Ld. Counsel that the present suit has not been instituted properly by the company. It is submitted that the plaintiff company had relied upon only the extract of the Board Resolution which is exhibited as Ex. PW- 1/3. However, the minutes of the meetings have not been placed on record vide which the plaintiff can prove that Sh. Nimesh Malhotra has duly authorized to file the present suit. Further, he CS DJ 77507/16 Servotech Power Systems Vs. Shashi Kala Hegde Page 4 of 18 has not been authorized by the company to appear in the court as a witness. Hence, the suit is not maintainable.

9) Per contra, it is argued by the Ld. Counsel for the plaintiff that the suit has been validly instituted. The Board Resolution has already been proved as Ex.PW1/3. The defence of the defendant has been struck off. Hence, unnecessary objections are being raised by the defendant to harass the plaintiff. Further, no objection qua this was taken by the defendant at the time of leading evidence by the plaintiff. Hence, this objection cannot be taken at this stage.

10) Record perused. As pointed out by the Ld. Counsel for the plaintiff, the extract of the Board Resolution is proved as Ex.PW1/3. Further, no objection qua this was taken by the defendant at the time of leading evidence by the plaintiff. Hon'ble High Court of Delhi has observed in Sangat Printers Pvt. Ltd. v. Wimpy International Ltd. MANU/DE/0269/2012 that:

"In my opinion, the Trial Court has clearly erred in dismissing the suit on the ground that the suit has not been validly instituted. Firstly, the finding is wrong, because the Board of Directors' resolution was proved and exhibited as Ex.PW1/A. Before the commencement of cross- examination, the respondent/defendant did not object to the exhibition of this document, and therefore, in view of the decision of the Supreme Court in the case of R.V.E.Venkatachala Gounder vs. Arulmigu Viswesaraswami & V.P.Temple 2003 (8) SCC 752, the respondent/defendant is estopped from objecting to the CS DJ 77507/16 Servotech Power Systems Vs. Shashi Kala Hegde Page 5 of 18 proof of the document. The Supreme Court in the case of R.V.E.Venkatachala Gounder(supra) has held that if objection is taken by the objecting party at the relevant point of time, then, the litigant which wrongly exhibits/proves the documents, can thereafter take corrective action to ensure proper mode and manner of proof. Therefore once objection is not taken at the appropriate point of time, subsequently, no benefit can be derived of the same by the party subsequently objecting. In the present case, evidence was filed by way of affidavit and therefore since objection to the exhibiting/proof was not taken before commencement of the cross-examination, the objection is deemed to have been waived inasmuch as if cross-examination would not have begun and objection would have been taken to exhibiting/proof of document, then the appellant would have preferred to lead other evidences to ensure proof of the resolution, Ex.PW1/A. I therefore hold that the resolution Ex.PW1/A duly showed the entitlement of Sh. Parvinder Singh to file the suit."

11) Further, in the same judgment, Hon'ble High Court relied upon the celebrated decision of the Supreme Court in the case of United Bank of India v. Naresh Kumar 1996(6) SCC 660; AIR 1997 SC 3, in which judgment the Hon'ble Supreme Court has said that the cases filed by the companies should not be dismissed on technical ground with respect to validity of institution, and in fact the Supreme Court went on further to hold that as long as the suit is contested to the hilt, it ought to be held that the suit was validly instituted and filed. It was observed that:

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"In cases like the present where suits are instituted or defended on behalf of a public corporation, public interest should not be permitted to be defeated on a mere technicality. Procedural defects which do not go to the root of the matter should not be permitted to defeat a just cause. There is sufficient power in the Courts, under the Code of Civil Procedure, to ensure that injustice is not done to any party who has a just case. As far as possible a substantive right should not be allowed to be defeated on account of a procedural irregularity which is curable.
It cannot be disputed that a company like the appellant can sue and be sued in its own name. Under Order 6 Rule 14 of the Code of Civil Procedure a pleading is required to be signed by the party and its pleader, if any. As a company is a juristic entity it is obvious that some person has to sign the pleadings on behalf of the company. Order 29 Rule 1 of the Code of Civil Procedure, therefore, provides that in a suit by against a corporation the Secretary or any Director or other Principal officer of the corporation who is able to depose to the facts of the case might sign and verify on behalf of the company. Reading Order 6 Rule 14 together with Order 29 Rule 1 of the Code of Civil Procedure it would appear that even in the absence of any formal letter of authority or power of attorney having been executed a person referred to in Rule 1 of Order 29 can, by virtue of the office which he holds, sign and verify the pleadings on behalf of the corporation. In addition thereto and de hors Order 29 Rule 1 of the Code of Civil Procedure, as a company is a juristic entity, it can duly authorise any person to sign the plaint or the written statement on its behalf and this would be regarded as sufficient compliance with the provisions of Order 6 Rule 14 of the Code of Civil CS DJ 77507/16 Servotech Power Systems Vs. Shashi Kala Hegde Page 7 of 18 Procedure. A person may be expressly authorised to sign the pleadings on behalf of the company, for example by the Board of Directors passing a resolution to that effect or by a power of attorney being executed in favour of any individual. In absence thereof and in cases where pleadings have been signed by one of it's officers a Corporation can ratify the said action of it's officer in signing the pleadings. Such ratification can be express or implied. The Court can, on the basis of the evidence on record, and after taking all the circumstances of the case, specially with regard to the conduct of the trial, come to the conclusion that the corporation had ratified the act of signing of the pleading by it's officer."

12) Hence, this objection cannot be taken at this stage. Further, it is submitted that the title of the suit of the plaintiff is defective. The plaintiff is not the proper party in the present matter. The name of the plaintiff is mentioned as M/S Servotech Power System Pvt. Ltd. But the name of the plaintiff company has been changed to Servotech Powers System Ltd on 24.05.2017. The plaintiff's application for the change of name was allowed by this court but there is no such document on record.

13) However, perusal of the record shows that the plaintiff has placed on record the copy of the certificate issued by the Registrar of Companies in this regard. The application qua the same is already allowed. Hence, the present objection is not maintainable.

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14) Then, it is argued by the Ld. Counsel for the defendant that the present suit is barred by limitation. It is submitted that as per the case of the plaintiff, the present suit for recovery is filed for goods sold by the plaintiff to the defendant. As per the case of the plaintiff, the goods were supplied by it to the defendant on 26.07.2012. Hence the date of limitation of 3 years began on that date, which ended on 27.07.2015. As the suit has been filed after the expiry of the limitation period, the present suit is not maintainable.

15) In this regard it is submitted by Ld. Counsel for the plaintiff that admittedly, the goods were supplied on 26.07.2012, however, for the payment of the same, two cheques were handed over by the defendant which were dated 05.09.2012. When these cheques were presented, they were dishonoured vide memos dated 05.09.2012. Hence the period of limitation began then. The present suit was filed by the plaintiff on 05.09.2015. Hence the suit is within limiation.

16) In this regard, ld. Counsel for the defendant has submitted that as per the email dated 28.07.2012, which has been relied upon by the plaintiff which is Ex. PW-1/10, the impugned cheques were given by the defendant to the plaintiff company on 28.07.2012. At the time of the handing over of the cheques, the dates had not been filled by the defendant which is apparent from the fact that the dates have been filled in different inks. This was done by the plaintiff to bring the suit within limitation. Even that does not help the plaintiff as the present suit has been filed on 18.09.2015. It is submitted that as per the print out record of the CS DJ 77507/16 Servotech Power Systems Vs. Shashi Kala Hegde Page 9 of 18 Hon'ble High Court of Delhi, the date of filing of the present suit is 18.09.2015. This document was put by Ld. Counsel to PW-1 and is Ex. D-1. Hence, it is stated that even on that logic, the present suit is barred by limitation.

17) Perusal of the record shows that the documents pertaining to the Registry of Hon'ble High Court are on record, vide which it can be seen that the suit was firstly filed by the plaintiff on 04.09.2015. The plaintiff was given time to remove some objections which were removed by him on 18.09.2015. However, the date of filing of the suit remains 04.09.2015. As the said document is part of the court record, the same need not be proved by the plaintiff. Having said that, the court must observe as to whether the suit is within the limitation period or not.

18) Admittedly, the plaintiff has filed the suit for recovery of price of goods which it alleged sold to the defendant. As per Article 14 of the Limitation Act, the period of limitation begins from the date of the supply of the goods which is 26.07.2012. However, it is the case of the plaintiff that towards the payment of these goods, the defendant handed over two cheques dated 05.09.2012 which are Ex. PW-1/8 and PW-1/9 respectively. Hence, the plaintiff is entitled to the benefit of Section 18 of the Limitation Act. During the course of the arguments, Ld. Counsel for the defendant has argued that in the email Ex. PW-1/10, it has been mentioned that the cheques have been handed over on 28.07.2012. Hence, it is clear that the plaintiff has filled the dates later on to bring the suit within limitation.

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19) Perusal of the email Ex. PW-1/10 shows that though it is mentioned that the cheques were handed over on 28.07.2012, the dates on the cheques have not been mentioned. Further, perusal of the cheques Ex. PW-1/8 and Ex. PW-1/9 shows that the dates have been filled in different ink. Hence, the possibility that the dates were filled later on by the plaintiff cannot be ruled out. However, even if that may be, from the email Ex.PW1/10, it is clear that the cheques were towards the payments of the goods supplied. It is not the case that the cheques were issued for security or towards any other purpose. No question was put by the Ld. Counsel to the defendant to PW1 qua the validity and veracity of the said email. Hence, this email is proved by the plaintiff to have been written on behalf of the defendant. At the cost of repetition, it may be emphasized that in the email Ex.PW1/10, which is written on behalf of the defendant, it has been specifically mentioned that the cheques Ex. PW-1/8 and Ex. PW-1/9 were issued towards the bills Ex. PW1/4 and PW1/5. Further, in case the goods were not supplied correctly by the plaintiff, there was no reason for the defendant to issue the cheques for the complete bill amount in the favour of the plaintiff. The original cheques are also on record. The plaintiff has also filed an affidavit u/s 65B of the Indian Evidence Act which is Ex. PW1/11. Hence, there is no reason to disbelieve the said documents.

20) Hence, the plaintiff has established that the cheques were issued by the defendant towards the payment for the goods supplied. Now, coming back to the argument of the Ld. Counsel CS DJ 77507/16 Servotech Power Systems Vs. Shashi Kala Hegde Page 11 of 18 for the defendant that the dates on the cheques were filled later on by the plaintiff. In this regard, it may be mentioned that it is a matter of practice that a cheque once issued is valid for a period of 03 months. Even if the date of issuance of the cheques is considered as 28.07.2012, it is a matter of record that the cheques were presented by the plaintiff on 05.09.2012 i.e. within 3 months of the date of issuance. These cheques were dishonoured on 05.09.2012 vide memos Ex. PW-1/12. Once the cheques were issued by the defendant in the favour of the plaintiff, it was the will and prerogative of the plaintiff to present them for encashing as per his own convenience within the validity period of the cheques. It was also the will of the plaintiff to not present the cheques at all. As the cheques were presented by the plaintiff within 03 months of the issuance of the cheques, the defendant cannot take the benefit of the fact that the dates were filled by the plaintiff later on. Furthermore, once the defendant has handed over undated cheques to the plaintiff out of his own free will, as is established from the email Ex.PW1/10, the defendant is estopped from taking this defence, as the defendant has permitted the plaintiff to fill the date later on, as per his own convenience.

21) Furthermore, it is not the case of the defendant that the payment is already made. As the cheques were dishonoured on 05.09.2012, the period of limitation stood extended in the favour of the plaintiff from that date. Hence, the plaintiff is entitled to the benefit of Section 18 of the Limitation Act. Hence, as suit was filed on 04.09.2015, the same is within limitation.

22) Further, it is submitted that the plaintiff has alleged CS DJ 77507/16 Servotech Power Systems Vs. Shashi Kala Hegde Page 12 of 18 that the defendant has acknowledged its liability on the basis of the cheques. The cheques have been signed by Sh Shrinath Hegde and not the present defendant. As the defendant has not signed the cheques, there is no acknowlegement on her behalf. However, perusal of the cheques Ex. PW-1/8 & Ex. PW-1/9 shows that on the cheques, it has been mentioned that the signatures may be of the proprietor/ authorized signatory. Hence, as the cheques have been issued by the authorized signatory of the defendant, she is bound by the acknowledgment given on her behalf. Hence, this objection is also not maintainable.

23) Then, Ld. Counsel for the defendant has argued that in the present matter, the defendant's husband Sh. Shrinath Hegde was dealing with the plaintiff company. In facts, the cheques which have been relied upon plaintiff have also been signed by him. However, he has not been made a party in the present suit. Hence, the suit of the plaintiff is bad for misjoinder and non joinder of necessary parties. However, in this regard Ld. Counsel for the plaintiff has argued that the plaintiff was dealing with the properitorship firm of the defendant. Even if the dealings were made by the husband of the defendant, still the suit has to be instituted in her own name as she was the sole proprietor of the proprietorship firm.

24) The court is in agreement with the Ld. Counsel with the plaintiff. The defendant's husband may have been the authorized representative of the proprietorship firm of the defendant but the suit has to be instituted in her name only, which has been done by the plaintiff in the present matter. Hence, this CS DJ 77507/16 Servotech Power Systems Vs. Shashi Kala Hegde Page 13 of 18 objection is also not maintainable.

25) Thereafter, Ld. Counsel for the defendant has argued that in the present matter, the plaintiff has not served the mandatory notice to the defendant before filing of the present suit for recovery. However, for filing of the civil suit for recovery, their is no mandatory requirement of serving a legal notice upon the defendant. Hence, this objection is not maintainable.

26) Further, it is argued that vide order dt. 24.01.2017, the plaintiff's application for amendment was allowed in the absence of the defendant wherein the plaintiff changed the paragraph pertaining to the cause of action. It is stated that the same is challenged by the defendant and as the plaintiff has changed the paragraph of the cause of action in the absence of the defendant, the amendement is not maintainable. However, in this regard, it may be noted that the amendment application already stands allowed on 24.01.2017. The defendant had not been summoned by the court till then. No appeal has been filed by the defendant against that order. Hence, that order has attained finality. As the plaint stands already amended, no such objection can be taken by the defendant at this stage.

27) Further, it is argued by the Ld. Counsel for the defendant that the defendant is residing at Bangalore and is working at Bangalore. The cheques were also returned from Bangalore and the goods were supplied by the plaintiff at Bangalore. Hence, this court has no territorial jurisdiction to entertain the present suit.

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28) In this regard, it is stated by the Ld. Counsel for the plaintiff that the plaintiff's company has its office at Delhi from where the goods were supplied. Hence, the present court is also having part jurisdiction to entertain the present suit.

29) Record perused. The plaintiff has placed on record the goods consignment receipts which are Mark A and Mark B respectively, from which it can be seen that the goods were supplied from Bhiwandi. However, perusal of the return memos Ex.PW1/12 shows that the cheques were presented by the plaintiff at Rohini, Delhi. Hence, as the cheques have been dishooured within the territorial jurisdiction of this court, this also has the jurisdiction to entertain the present suit. Hence, this objection is also not maintainable.

30) Lastly, it is argued by the Ld. Counsel for the defendant that the suit of the plaintiff is not maintainable even on the merits of the case. Firstly, it is argued that the plaintiff has not placed on record the original purchase orders vide which the defendant allegedly placed orders with the plaintiff to supply the goods to the defendant. Further, the plaintiff has not proved on record any ledger account or balance sheet to show that there is an outstanding liability against the defendant. Hence, the suit of the plaintiff is not maintainable.

31) However, in this regard, it may be noted that the plaintiff has proved on record the original invoices which have been raised by the plaintiff against the defendant which are Ex.

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PW1/4 and PW1/5 respectively. PW1 Nimesh Malhotra was duly cross examined by the Ld. Counsel for the defendant. However, no such question or suggestion has been put to the witness that these bills are forged or fabricated or that no goods have been supplied by the plaintiff to the defendant against these invoices. It is a settled principle of law that facts which are not controverted in cross examination are deemed to be admitted by the opposite party.

32) Further, even if these invoices are not believed, the plaintiff has placed on record the goods consignment receipts which are Mark A and Mark B respectively. It is submitted by Ld. Counsel for the defendant that as per the invoice Ex. PW1/5, goods worth Rs. 14,86,050/- were allegedly transported by the plaintiff but as per the consignment receipt Mark A, goods worth Rs. 12,05,640/- were transported. Hence, evidently there is a difference of amount worth Rs. 2,80,410/- in the said supply. Ld. Counsel for the defendant has correctly pointed out the said difference. However, it is a matter of record that the plaintiff has proved on record copy of an e-mail dated 28.07.2012 Ex.PW1/12 sent by one Mr. Rajiv Hegde on behalf of Siddhartha Enterprises i.e. the defendant vide which it has been mentioned that two cheques i.e. cheques Ex. PW1/8 and PW1/9 were sent to the plaintiff towards the bills Ex. PW1/4 and PW1/5.

33) In case the goods were not supplied correctly by the plaintiff, there was no reason for the defendant to issue the cheques for the complete bill amount in the favour of the plaintiff. The original cheques are also on record. The plaintiff CS DJ 77507/16 Servotech Power Systems Vs. Shashi Kala Hegde Page 16 of 18 has also filed an affidavit u/s 65B of the Indian Evidence Act which is Ex. PW1/11. Hence, there is no reason to disbelieve the said documents. On the basis of these documents, it is proved that the defendant had issued two cheques towards the payment of the bills as mentioned above. At the cost of repetition, it may be mentioned again that in case the goods which were supplied by the plaintiff were not as per the description, then the defendant should not have issued the said cheques in the favour of the plaintiff. Furthermore, no counter claim or counter suit was filed by the defendant against the plaintiff in this regard. In view of the same, the court is of the opinion it is proved that the plaintiff had supplied goods to the defendant vide bills Ex. PW1/4 and PW1/5, for which the defendant issued cheques Ex. PW1/8 and PW1/9 in the favour of the plaintiff company. The said cheques were dishonoured vide memos Ex. PW1/12. It is also a matter of record that no evidence has been led by the defendant to show that the said payment was cleared by the defendant at any point of time. In view of the same, the plaintiff is entitled to the recovery of the outstanding amount of Rs. 23,80,500/-. The plaintiff has also charged interest @ 18% per annum w.e.f 05.09.2012 till 26.04.2015 which is Rs. 12,85470/-. However, there is no such stipulation in the bills Ex.PW1/4 and Ex.PW1/5. Hence, the court is not inclined to award the same.

Relief

34) Keeping in view the above mentioned facts and circumstances, a decree of Rs.23,80,500/- is passed in the favour of the plaintiff against the defendant. The plaintiff is also awarded pendente lite and future interest of 8% per annum upon CS DJ 77507/16 Servotech Power Systems Vs. Shashi Kala Hegde Page 17 of 18 the decreetal amount from the date of filing of the suit till its realisation. Parties to bear their own cost.

Decree sheet be prepared accordingly. File be consigned to Record Room.

Announced in open court on 17.03.2023 Digitally signed RUCHIKA by RUCHIKA SINGLA SINGLA Date: 2023.03.17 16:23:13 -1000 (RUCHIKA SINGLA) ADJ-03 (N/W) Rohini Courts :Delhi/17.03.2023 CS DJ 77507/16 Servotech Power Systems Vs. Shashi Kala Hegde Page 18 of 18