Delhi District Court
M/S Vasu Polymers India P Ltd vs M/S Elite Packaging And Ors on 13 December, 2024
~1~
In the court of Sh. Umed Singh Grewal, District Judge-
Commercial Court-02, North District
Rohini Courts, Delhi.
CS (Comm) No. : 275/20
In the matter of :
Vasu Polymers (India) Pvt. Ltd.
Having its officer at C-635, DSIIDC Industrial Area,
Narela, Delhi - 110042
Through its AR Sh. Sunil Singhal .... Plaintiff
Vs.
1. M/s Elite Packaging
at
'K' Building, Ballard Estate,
Mumbai - 400001
2. Mr. Praful C. Sanghvi (Now expired),
Represented through his legal heirs :-
(i) Smt. Vibhuti Prafulchandra Sanghavi
w/o Mr. Praful C. Sanghvi
(ii) Mr. Viral Prafulchandra Sanghavi
S/o Mr. Praful C. Sanghavi
both r/o 12, Oceanic Apartment, 1st floor,
Dr. Rajabali Patel Lane Opposite Breach Candy Hospital,
Cumballa Hill, Mumbai - 400026.
3. Mr. Viral Prafulchandra Sanghvi,
Partner M/s Elite Packaging
Addresses of defendant nos. 1 and 3
CS (COMM) No.: 373/23 Digitally
Vasu Polymers (India) Pvt. Ltd. Vs. M/s Elite Packaging Page No. 1/35 UMED
signed by
UMED SINGH
Date:
SINGH 2024.12.13
04:59:18
+0530
~2~
1st address :-
'K' Building, Ballard Estate, Mumbai - 400001
2nd address :-
Aagam Godown, Kalyan Street,
Dana Bunder, Masjid Bunder, Mumbai - 400009
3rd address :-
216, Yusuf Meherali Road,
Masjid Bunder, Nagdevi Street, Mumbai - 400003
4th address :-
R/o 12, Oceanic Apartments,
Dr. Rajabali Patel Road,
Opposite Breach Candy Hospital,
Mumbai - 400028 .... Defendants
Date of Institution : 11.03.2020
Date on which arguments were concluded : 30.11.2024
Date of pronouncement of order : 13.12.2024
Present: Sh. D. R. Jain, Ld. Counsel for plaintiff.
Sh. Mangesh Patel, Ld. Counsel for defendants.
JUDGMENT:-
1. This is an ordinary suit for recovery of Rs. 1,99,97,228/- alongwith pendent-lite and future interest @ 18% per annum and cost.
CS (COMM) No.: 373/23 Vasu Polymers (India) Pvt. Ltd. Vs. M/s Elite Packaging Page No. 2/35 Digitally signed by UMED UMED Date:
SINGH SINGH 2024.12.13 04:59:26 +0530 ~3~
2. Plaintiff is a private limited company and vide board resolution dated 25.12.2019, it authorised Mr. Sunil Singhal to sign., verify and institute the plaint.
The plaintiff is in the trading of multi layer films/ stretch films and has a huge reputation in the market. The defendant nos. 2 and 3 claiming to be the partners of defendant no. 1, approached it and persuaded to supply multi layer film on credit basis and sent e-mail dated 21.02.2018 for that purpose and named M/s Moongipa Roadways Pvt. Ltd. as the transporter through which the goods were to be delivered. Accordingly, the goods were sent to them from 24.02.2018 to 01.06.2019 through 143 invoices of the total amount of Rs. 2,45,97,114/- from its unit no. II on premises no. A-294/DSIIDC , Industrial Area, Narela, Delhi through M/s Moongipa Roadways Pvt Limited and the goods were duly received and acknowledged by defendants. As per running account statement of the defendants, they had made payment of Rs. 87,50,340/- only leaving behind an amount of Rs. 1,58,47,288/- which they avoided on one or the other pretext. When e-mails dated 12.06.2019 and 19.06.2019 sent to defendants for making payment, evoked no response, a legal notice dated 27.08.2019 was sent which was replied vide reply dated 13.09.2019 with false facts. The principal amount is Rs. 1,58,47,288/- for which the interest comes out to Rs. 41,56,017/- @ 18% per annum from the date of invoice till 31.12.2019, CS (COMM) No.: 373/23 Vasu Polymers (India) Pvt. Ltd. Vs. M/s Elite Packaging Page No. 3/35 Digitally signed by UMED UMED Date:
SINGH SINGH 04:59:33 2024.12.13 +0530 ~4~ totaling to Rs. 2,00,03,245/- but the plaintiff has restricted its claim only to Rs. 1,99,95,000/-.
3. All three defendants filed joint written statement denying that the plaintiff had supplied them multi layer films from 24.02.2018 to 01.06.2019 by virtue of 143 invoices totaling to Rs. 2,45,97,014/-. However, they admitted that they had received legal notice which was duly received denying liability.
The next objection is that the documents filed by plaintiff do not bear signature of any of the defendants and they all are false and fabricated. The legal objection is that the plaint has been signed and verified by Mr. Sunil Singhal but he has no authority to institute the suit.
It is next stated that there is no privity of contract between plaintiff and defendant nos. 2 and 3. It is pertinent to mention that in plaint, defendant no. 1 is stated to be a firm of which defendant nos. 2 and 3 are the partners. In that regard, the written statement is that plaintiff has not filed any document with the plaint to substantiate that contention and in the absence of registration documents, the suit filed against defendant no. 1 firm was not maintainable as it is an unregistered entity.
4. The defendant no. 2 expired midway trial and the application under Order XXII rule 4 CPC of the plaintiff was allowed and wife and son of defendant no. 2 were impleaded on CS (COMM) No.: 373/23 Vasu Polymers (India) Pvt. Ltd. Vs. M/s Elite Packaging Page No. 4/35 Digitally signed by UMED UMED Date:
SINGH SINGH 2024.12.13 04:59:38 +0530 ~5~
05.11.2022. It is pertinent to mention that the son was already defendant no. 3 at that time. Thereafter, the newly impleaded LR i.e. wife of erstwhile defendant no. 2 moved an application for permission to file additional written statement but the same was dismissed on 10.02.2023 against which the wife went to the Hon'ble High Court by filing CM (M) 458/23 which was allowed directing the court to decide the application of the wife under Section 151 CPC afresh. That application was allowed by the predecessor of this court on 07.05.2024 and in this way, the additional written statement of wife of erstwhile defendant no. 2 came on record.
In the written statement of wife, the same contentions are mentioned as are the plea in the initial written statement. Additionally, it is mentioned that invoices filed by plaintiff are false and fabricated, that the lady was of 78 years totally dependent on income of her son and hence she should not have been impleaded as LR of her husband. It is next mentioned that the plaintiff had filed a complaint against them in PS Shalimar Bagh, Delhi pursuant to which notice dated 31.12.2020 was sent to them through e-mail dated 14.01.2021 whereby she was directed to join the inquiry on 20.01.2021. She joined the police proceedings on different dates but nothing wrong was found against her.
CS (COMM) No.: 373/23
Vasu Polymers (India) Pvt. Ltd. Vs. M/s Elite Packaging Page No. 5/35 Digitally
signed by
UMED
UMED SINGH
SINGH Date:
2024.12.13
04:59:44
+0530
~6~
5. Following issues were framed on 26.03.2022 and 03.08.2024 :-
1. Whether the plaintiff is entitled to decree in the sum of Rs. 1,99,95,000/- alongwith pendent lite and future interest @ 18% per annum in its favour and against the defendants ? OPP 1A. Whether there is no privity of contract between the plaintiff and defendant no. 2 (a) ? OPD 1B. Whether the suit of the plaintiff is not maintainable after the death of defendant no. 2 Praful Sanghvi ? OPD
2. Whether the plaintiff is entitled to costs of the suit ?
OPP
3. Relief.
6. In order to substantiate the case, the plaintiff examined two witnesses.
7. PW1 Mr. Sunil Singhal is the AR as well as director of the plaintiff company and he reiterated the contents of plant in his affidavit in evidence Ex. PW1/A and relied upon following documents :-
1. Ex. PW1/1 (OSR) is photocopy of certificate of incorporation of the plaintiff.
2. Ex. PW1/2 is resolution dated 25.12.2019.
CS (COMM) No.: 373/23 Vasu Polymers (India) Pvt. Ltd. Vs. M/s Elite Packaging Page No. 6/35 Digitally signed by UMED UMED SINGH SINGH Date:
2024.12.13 04:59:50 +0530 ~7~
3. Ex. PW1/3 (colly) are invoices and bilties.
4. Ex. PW1/4 statement of account of plaintiff from 01.04.2017 to 31.12.2019.
5. Ex. PW1/5 to Ex. PW1/7 are copies of e-mails dated 21.02.2018, 12.06.2019 and 19.06.2019.
6. Ex. PW1/8 and Ex. PW1/9 are legal notice dated 27.08.2019 and postal receipts.
7. Ex. PW1/10 is reply sent by defendant to the legal notice.
8. Ex. PW1/11 and Ex. PW1/12 are copy of legal notice under Order XXII rule 8 CPC dated 03.07.2021 and postal receipts.
9. Ex. PW1/13 is certificate under Section 65B of Indian Evidence Act.
PW2 Mr. Kalu Singh is the manager of M/s Moongipa Roadways Private Limited through whom the goods were transported to defendants. He has been authorised by employer vide certificate Ex. PW2/1 to depose. He stated on oath that Ex. PW2/2 was the detail of booking from Vasu Polymers Pvt. Ltd. i.e. from plaintiff to defendant from February, 2018 to 21.08.2019 along with bill and receipts. The certificate under Section 65B of Indian Evidence Act is Ex. PW2/3.
8. The defendants examined defendant no. 3 as DW1 and CS (COMM) No.: 373/23 Vasu Polymers (India) Pvt. Ltd. Vs. M/s Elite Packaging Page No. 7/35 Digitally signed by UMED UMED Date:
SINGH SINGH 2024.12.13 04:59:57 +0530 ~8~ he repeated the contents of written statement in his affidavit in evidence Ex. DW1/A and relied upon following documents :-
1. Ex. DW1/3 is payment details made by the defendant to the plaintiff.
2. Ex. DW1/4 is GSTR 1.
3. Ex. DW1/5 is GSTR 3B
4. Mark A is copy of correspondence/ communication dated 16.01.2021 addressed to SHO PS Shalimar Bagh along with its annexures by the defendant.
5. Mark B (colly) is copy of invoices with lorry receipts.
Additionally, he deposed that defendants had business relationship with the plaintiff pursuant to which he had placed some orders for purchasing some material and accordingly, the plaintiff had supplied the same vide invoice and lorry receipts Mark B for which he had made payment through RTGS/NEFT as shown in payment detail Ex. DW1/3. He further deposed that he and his father used to abide by law by filing GSTRs on the portal and by paying GST to the State as well as Central Government and in this regard, he relied upon GSTR-1 as Ex. DW1/4 and GSTR-3B as Ex. DW1/5.
Issue no. 1A
9. It is mentioned in para no. 5 of the written statement that the plaintiffs have claimed in plaint that defendant no. 1 is a CS (COMM) No.: 373/23 Vasu Polymers (India) Pvt. Ltd. Vs. M/s Elite Packaging Page No. 8/35 Digitally signed by UMED UMED Date:
SINGH SINGH 2024.12.13 05:00:05 +0530 ~9~ partnership firm and defendant nos. 2 and 3 are its partners, however, they did not file any document to substantiate their claim. It is next mentioned that in the absence of any registration document, the suit against defendant no. 1, which is a unregistered entity, and hence not a juristic person, is not maintainable. It is mentioned in para no. 6 that in the absence of any document of registration of partnership, the suit is not maintainable against the unregistered firm.
Above replies show that they have not denied that the defendant no. 1 is a firm and they are its partners. Merely they stated that as the plaintiff did not file any registration certificate regarding defendant no. 1, it is an unregistered firm and hence suit is not maintainable against it.
So, the defendants' version is also that defendant no. 1 is a firm and defendant nos. 2 and 3 are its partners. During pendancy of the case, the defendant no. 2 expired leaving behind wife and son. The son, at that time, was already a party as defendant no. 3. The application under Order XXII rule 4 CPC was moved and the wife of erstwhile defendant no. 2 was impleaded. So, the defendant no. 2A is contesting the suit as LR of defendant no. 2. Naturally she cannot be said to have any privity of contract with the plaintiff regarding the transactions done by the partnership firm of which her husband was one of the partner. If the suit goes against the defendant no. 1 firm, the liability of such a person is determined as per Order XXI rule 50 CS (COMM) No.: 373/23 Vasu Polymers (India) Pvt. Ltd. Vs. M/s Elite Packaging Page No. 9/35 Digitally signed by UMED UMED SINGH SINGH Date:
2024.12.13 05:00:14 +0530 ~ 10 ~ CPC. So, this issue is decided in favour of wife of erstwhile defendant no. 2.
Issue no. 1B
10. As observed earlier, one of the partner i.e. father of defendant no. 3 expired mid way trial leaving behind the other partner as defendant no. 3. It is pertinent to mention that as per the case of the plaintiff, the defendant no. 1 has two partners namely defendant nos. 2 and 3.
It is mentioned in order XXX rule 4 CPC that if two or more persons have been sued in the name of a firm and any one of such firm dies, whether before institution or during pendency of the suit, it shall not be necessary to join the legal representative of the deceased as party to the suit. That order clearly suggests that the suit filed against a firm is not only maintainable but also can be continued against the firm without impleading the legal representatives of the deceased partner. But in the case in hand, such LR has already been impleaded.
In "Anokhe Lal Vs Radhamohan Bansal and Ors.", Civil Appeal no. 13716/1996 decided by Hon'ble Apex court on 01.11.1996, the suit was against the firm and one of the partner died and his LR moved an application under Order I rule 10 CPC for becoming a party. Ultimately, the said application was dismissed by the Hon'ble Apex court by holding as under :-
CS (COMM) No.: 373/23 Vasu Polymers (India) Pvt. Ltd. Vs. M/s Elite Packaging Page No. 10/35 Digitally signed by UMED UMED SINGH SINGH Date:
2024.12.13 05:00:20 +0530 ~ 11 ~ "6. That apart, even on merits, first respondent's application filed under Order 30 Rule 4 is not maintainable on the facts of this case. The said Rule is quoted below:
"4. Right of suit on death of partner:- (1) Notwithstanding anything contained in Sec.45 of the Indian Contract Act, 1872 (9 of 1871), where two or more persons say sue or be sued in the name of firm under the foregoing provisions and any of such person dies, whether before the institution or during the pendency of any suit lt shall not be necessary to join the legal representative of the deceased as a party to the suit.
(2) Nothing in sub-rule (1) shall limit or otherwise affect any right which the legal representative of the deceased may have-
(a) to apply to be made a party to the suit, or
(b) to enforce any claim against the surviror or survivors."
7. The aforesaid Rule 4(1) is clearly an e exception to Section 45 of the Contract Act. The principle made out in Section 45 applies to a situation where one person has made a promise to two or more persons Jointly. The right to claim performance of the contract arising out of such a promise would then rest with those promisees together during their joint lives and after the death of any of them, such right would devolve on the representative of the deceased promisee jointly with the surviving promisees.
CS (COMM) No.: 373/23
Vasu Polymers (India) Pvt. Ltd. Vs. M/s Elite Packaging Page No. 11/35
Digitally
signed by
UMED
UMED SINGH
SINGH Date:
2024.12.13
05:00:27
+0530
~ 12 ~
Thus if the joint promisees were partners of a firm this provision obliges the legal representative of a deceased partner to join the rest in enforcement of the right to have performance of the contract. This is the nub of Section 45 of the Contract Act. But a conflict of opinions arose between different High Courts regarding interpretation of the rule involved in the said Section. High Courts of Madras, Bombay and Allahabad took the view that in a suit for enforcement of the said right by a firm legal representatives of a deceased partner need not be impleaded, whereas the Calcutta High Court took the contrary view that in such a case legal representatives were necessary parties. In fact sub-rule (1) of Rule 4 of Order 30 has been prescribed to resolve the said conflict by diluting the rigour contained in the rule embodied in Section 45 of the Contract Act in relation to a suit involving a partnership firm.
8. What sub-rule (1) of Rule 4 in Order 30 of the Code provides is that ii is not mandatory to join the legal representative of a deceased partner as a party in the said suit. What sub-rule (2) says, in other words, is that sub- rule (1) is not a hindrance to any 1egal representative of a deceased partner to get himself impleaded if he has otherwise any right to do so. It is therefore, clear that sub-rule (2) does not create any right as such for a legal representative to get impleaded in a suit, but it only operates as an exception to sub-rule CS (COMM) No.: 373/23 Vasu Polymers (India) Pvt. Ltd. Vs. M/s Elite Packaging Page No. 12/35 Digitally signed by UMED UMED Date:
SINGH SINGH 2024.12.13 05:00:34 +0530 ~ 13 ~ (1). At any rate, Rule 4(2) of Order 30 cannot come into operation in a sutuation where Order 1 Rule 10 of the Code cannot be invoked."
In "Upper India Cable Co. and Ors. Vs. Bal Kishan", AIR 1984 SC 1381, the question before Hon'ble Apex court was where the suit instituted against the firm and partners were impleaded as parties, whether in the event of death of partner so sued, the suit or the appeal, as the case may be, would abate, if the legal representatives of the deceased partners were not substituted within the prescribed period of limitation. The apex court held that the suit does not abate in view of Order XXX rule 4 CPC. In the case in hand, only one of the partner had died and at that time the other partner was very much party to the case. Moreover, the LR of the deceased partner was impleaded. So, the suit is very much maintainable after the death of defendant no. 2. This issue is decided in favour of plaintiff and against defendants.
Issue no. 1
11. Learned counsel for defendant argued that the suit has been instituted by PW1 Mr. Sunil Singhal who is not an authorised person to do so because he did not file minutes of meeting to have authorisation. He filed merely extract of board resolution. The counsel relied upon "Escorts Limited Vs. Sai CS (COMM) No.: 373/23 Digitally Vasu Polymers (India) Pvt. Ltd. Vs. M/s Elite Packaging Page No. 13/35 signed by UMED UMED SINGH SINGH Date:
2024.12.13 05:00:40 +0530 ~ 14 ~ Autos", 1990 SCC Online Del 184 and "Anant Raj Agencies Pvt. Ltd. Vs. National Insurance Co. Ltd.", 2009 SCC Online Del 1422 in this regard.
Next argument is that PW1 and PW2 have filed certificates under Section 65B of Indian Evidence Act in support of the documents filed by them. But they admitted in cross- examination that they were not the only persons who fed the said data in the computer. They did not take printout from the computer. Also, they are not the persons who were in exclusive control of the computer. Moreover, the certificate under Section 65B of Indian Evidence Act should have been prepared at the time of preparation of the documents but such certificate was prepared later. Due to these reasons, the certificates under Section 65B of Indian Evidence Act cannot be taken into account and in this regard, he relied upon "Anwar P. V. Vs. P. K. Basheer and Ors.", (2014) 10 SCC 473 and "Arjun Panditrao Khotkar Vs. Kailash Kushanrao Gorantyal and Ors.", (2020) 3 SCC 216.
Next argument in continuation is that due to defective certificates under Section 65B of Indian Evidence Act, the invoices, statement of account, emails and the statement Ex. PW2/2 remained unproved and despite it those documents were exhibited during trial. But such exhibition is of no use as the documents remained unproved and in this regard, the counsel relied upon "Samsung India Electronics Pvt. Ltd. Vs. MGR Enterprises and Ors.", 2019 SCC Online Del 8877.
CS (COMM) No.: 373/23 Digitally
signed by
Vasu Polymers (India) Pvt. Ltd. Vs. M/s Elite Packaging Page No. 14/35 UMED
UMED SINGH
SINGH Date:
2024.12.13
05:00:46
+0530
~ 15 ~
Next argument is that PW2 has placed on record the account statement of M/s Moongipa Roadways Pvt. Ltd. But that statement was not filed by the plaintiff at the time of filing of the plaint which was mandatory. It was filed at the time of evidence without permission of the court and so, it should not be taken into account.
It is next argued that forged and fabricated invoices and account statements have been annexed by the plaintiff. In fact, the goods were delivered only against 34 invoices for which the defendant had paid Rs. 87 lacs through NEFT etc. and Rs. 20 lacs in cash. No other good was ever supplied. The invoices filed by plaintiff do not bear signature or stamp of any person of the defendant as a token of proof of delivery though it is the case of PW2 that at the time of delivery of the goods, the transport company used to obtain their signatures on lorry receipt. Even PW2 failed to prove delivery of the goods with the help of statement Ex. PW2/2 because as per the evidence of that witness, the goods used to be delivered to the defendant only after receipt of freight charges, but as per statement Ex. PW2/2, the freight charges were paid after 40 days and it is very much impossible that the goods remained in the truck for about 40 days.
The counsel next argued that as per mail Ex. PW1/5, the payment was to be made within 40 days but such leverage period is mentioned as 15 days in invoices.
CS (COMM) No.: 373/23
Vasu Polymers (India) Pvt. Ltd. Vs. M/s Elite Packaging Page No. 15/35 Digitally
signed by
UMED
UMED SINGH
SINGH Date:
2024.12.13
05:00:52
+0530
~ 16 ~
Last argument is that the plaintiff has not proved that it had so much capacity to manufacture the poly films as was delivered to the defendant.
12. Counsel for plaintiff admitted that his client did not file minutes of the board meeting and that extract of board resolution has been filed to prove authorisation to institute plaint through PW1 Sunil Singhal. But PW1 is himself a director and except him, there was only one other director. He contested the suit for about 4 - 5 years and also contested fictitious petitions moved by the defendant in Hon'ble High Court. So, his authorisation is complete and proved.
He next argued that now-a-days organisations are quite huge in which several persons are hired due to volume of work, to do the same kind of work. The data regarding invoices etc. and the statement of M/s Moongipa Roadways Pvt. Ltd. were fed in the computer of plaintiff and that transport company by various persons. There is no requirement of law that only one person should feed data in the computer and only such fed data shall be admissible in the evidence. He argued that the data can be fed by several persons and any one of them is to appear in the witness box to prove data by filing certificate under Section 65B of Indian Evidence Act. In the case in hand, PW1 and PW2 are more than competent witnesses and their certificates under Section 65B of Indian Evidence Act comply with every law. He CS (COMM) No.: 373/23 Vasu Polymers (India) Pvt. Ltd. Vs. M/s Elite Packaging Page No. 16/35 Digitally signed by UMED UMED SINGH Date:
SINGH 2024.12.13 05:01:01 +0530 ~ 17 ~ relied upon "Arjun Panditrao Khotkar Vs. Kailash Kushanrao Gorantyal and Ors." (Supra) in this regard.
In continuation to argument on point no. 2, he argued that certificate under Section 65B of Indian Evidence Act of PW1 and PW2 are within four corners of the law and so, the invoices, account statement, emails and statement of M/s Moongipa Roadways Pvt. Ltd., have been proved and that is why they have been exhibited during trial. He admitted that the statement Ex. PW2/2 of M/s Moongipa Roadways Pvt. Ltd. was not filed by plaintiff at the time of filing of the suit but he submitted that the said statement is not the record pertaining to plaintiff or defendant and it is of a third party and it was not in the possession of the plaintiff. That document was to be placed on record and proved by the transport company and accordingly it was done by the manager of that company and hence Ex. PW2/2 can very well be taken into account.
He next argued that in both written statements, the version of the defendants is that all the invoices filed by the plaintiff were forged and fabricated. Every averment made in plaint was denied in the written statement though the reason for such denial has not been mentioned. Also, the defendants did not put their version in the written statement as requisitioned by the CPC as amended by Commercial Courts Act, 2015. Next submission is that the statement of truth and affidavit of admission/denial of documents have not been filed with any of CS (COMM) No.: 373/23 Vasu Polymers (India) Pvt. Ltd. Vs. M/s Elite Packaging Page No. 17/35 Digitally signed by UMED UMED Date:
SINGH SINGH 2024.12.13 05:01:08 +0530 ~ 18 ~ the written statements and hence, the defence cannot be taken into account and all the documents filed by the plaintiff are deemed to have been admitted.
It is next submitted that DW1 came out with a new case in evidence that goods were delivered to him only against 34 invoices for which he paid Rs. 87 lacs through NEFT and Rs. 20 lacs in cash. Such version was totally missing in the written statement. Also, the defendants did not file anything on record to prove cash payment of Rs. 20 lacs.
Further submission is that initially it was agreed that credit period was 40 days but during supply of the goods, it was agreed through invoices that the credit period was only 15 days.
The last argument is that it is not a criminal case requiring standard of proof beyond reasonable doubt. In civil cases, such standard is preponderance of probability and hence, the plaintiff was not required to prove that it had so much capacity to manufacture poly films which was supplied to defendants.
13. The plaint bears signature of Mr. Sunil Singhal and is accompanied by affidavit and statement of truth signed by him. He is one of the director. It is mentioned in para no. 3 of the plaint that he has been authorised to institute the suit vide board resolution dated 25.12.2019. In evidence, he deposed that such board resolution was Ex. PW1/2. In cross-examination, he CS (COMM) No.: 373/23 Digitally signed by Vasu Polymers (India) Pvt. Ltd. Vs. M/s Elite Packaging Page No. 18/35 UMED UMED Date:
SINGH SINGH 2024.12.13 05:01:16 +0530 ~ 19 ~ deposed that he did not know whether the plaintiff had submitted minute book to the ROC for checking and whether any agenda of business was circulated for meeting dated 25.12.2019. He admitted that the board resolution Ex. PW1/2 did not bear stamp of the plaintiff. But the counsel for defendants could not place on record any requirement of law that such minute book is to be sent to ROC or the agenda for convening such meeting is to be circulated in advance and that extract of board resolution should bear the stamp of the company. In the absence of such requirement by law, autorisation of PW1 is not invalid.
Perusal of Ex. PW1/2 shows that it is not the board resolution, rather it is extract of board resolution. Even PW1 admitted that he did not file minutes of meeting dated 25.12.2019. In "Anant Raj Agencies Pvt. Ltd. Vs. National Insurance Co. Ltd." (Supra) and "Escorts Limited Vs. Sai Autos"
(Supra) it was held that if suit had been instituted on behalf of a company, the person instituting it should have been authorised by board of directors to do so and for proof of that fact, the minutes of meeting of the board should be placed on record. In the case in hand, the minutes have not been filed.
14. In "United Bank of India Vs. Naresh Kumar and Ors.", AIR 1997 SC 3, the objection was taken that Mr. L. K. Rohtagi did not have authority to file and sign the plaint on behalf of the bank. Following was held by hon'ble apex court :-
CS (COMM) No.: 373/23 Digitally Vasu Polymers (India) Pvt. Ltd. Vs. M/s Elite Packaging Page No. 19/35 signed by UMED UMED SINGH SINGH Date:
2024.12.13 05:01:23 +0530 ~ 20 ~ "The courts below could have held that Sh. L.K. Rohatgi must have been empowered to sign the plaint on behalf of the appellant. In the alternative it would have been legitimate to hold that the manner in which the suit was conducted showed that the appellant bank must have ratified the action of Sh. L.K. Rohatgi in signing the plaint. If, for any reason whatsoever, the courts below were still unable to come to this conclusion, then either of the appellate court sought to have exercised their jurisdiction under Order 41 Rule 27 (1) (b) of the Code of Civil Procedure and should have directed a proper power of attorney to be produced or they could have ordered Sh. L.K. Rohatgi or any other competent person to be examined as a witness in order to prove ratification or the authority of Sh. L.K. Rohatgi to sign the plaint. Such a power should be exercised by a court in order to ensure that injustice is not done by rejection of a genuine claim. The Courts below having come to a conclusion that money had been taken by respondent no.1 and that respondent no.2and husband of respondent no.3 had stood as guarantors and that the claim of the appellant was justified it will be at ravesty of justice if the appellant is to be non suited for a technical reason which does not go to the root of the matter. The suit did not suffer from any jurisdictional infirmity and the only defect which was alleged on behalf of the respondents was one which was curable.
The court had to be satisfied that Sh. L.K. Rohatgi could sign the plaint on behalf of the appellant. The suit had been CS (COMM) No.: 373/23 Vasu Polymers (India) Pvt. Ltd. Vs. M/s Elite Packaging Page No. 20/35 Digitally signed by UMED UMED Date:
SINGH SINGH 2024.12.13 05:01:30 +0530 ~ 21 ~ filed in the name of the appellant company; full amount of court fee had been paid by the appellant bank;documentary as well as oral evidence had been led on behalf of the appellant and the trial of the suit before the Sub Judge, Ambala, had continued for about two years. It is difficult, in these circumstances, even to presume that the suit had been filed and tried without the appellant having authorised the institution of the same. The only reasonable conclusion which we can come to is that Sh. L.K. Rohatgi must have been authorised to sign the plaint and, in any case, it must be held that the appellant had ratified the action of Sh. L.K. Rohatgi in signing the plaint and thereafter it continued with the suit."
As discussed earlier, the plaint bears signatures of Mr. Sunil Singhal and it is accompanied by his affidavit and statement of truth. He is none else than one of the director of the plaintiff. Except him, there is one more director. He instituted the suit on 11.03.2020 i.e. about 5 years ago. He is contesting not only the proceedings of this court but also the proceedings in the High Court where any sundry order of this court was challenged by the defendants. He has also paid court fee of Rs. 1,97,450/-. Existence of these facts are compelling this court to come to the conclusion that Mr. Sunil Singhal has been authorised to sign and institute the case. The suit has been instituted by a properly authorised person.
CS (COMM) No.: 373/23
Vasu Polymers (India) Pvt. Ltd. Vs. M/s Elite Packaging Page No. 21/35 Digitally
signed by
UMED
UMED SINGH
SINGH Date:
2024.12.13
05:01:36
+0530
~ 22 ~
15. PW1 filed computer generated 143 invoices, statement of account, e-mail dated 21.02.2018, 12.06.2019 and 19.06.2019 etc.. In support of those documents, he filed certificate under Section 65B of Indian Evidence Act as Ex. PW1/3. In cross-
examination, he deposed that the directors of the plaintiff company used to operate the computer and sometimes, the staff also fed data. He next made it clear that directors as well as staff used to feed data in the computer from which the print out was taken. He could not recollect the number of times he had personally fed data. He next deposed that print out of statement of account Ex. PW1/4 was taken by the staff member.
PW2 is manager of M/s Moongipa Roadways Pvt. Ltd. and he has been authorised by the company vide authorisation letter Ex. PW2/2 to depose before the court. Regarding the goods delivered by his company from plaintiff to defendant, he filed a detailed statement Ex. PW2/2 along with certificate under Section 65B of Indian Evidence Act. In cross-examination, he deposed that there were about 5 computers in the office of transport company in Delhi and only one computer was in his control. These computers were not inter connected. He admitted that specification of the computer and software used by them, have not been mentioned in certificate under Section 65B of Indian Evidence Act. He next deposed that except his computer, other four computers were not accessed by the other employees. He next admitted it correct that different persons of his company CS (COMM) No.: 373/23 Digitally Vasu Polymers (India) Pvt. Ltd. Vs. M/s Elite Packaging Page No. 22/35 signed by UMED UMED SINGH Date:
SINGH 2024.12.13 05:01:43 +0530 ~ 23 ~ used to feed data in different computers at different times. The data shown in his computer was also fed by different persons at different times. He denied the suggestion that certificate under Section 65B of Indian Evidence Act did not fulfill the mandatory requirement of Section 65B of Indian Evidence Act.
16. In "Anwar P. V. Vs. P. K. Basheer and Ors.", (Supra) the Hon'ble Supreme Court held that only that computer generated record shall be deemed proved for which certificate under Section 65B of Indian Evidence Act was furnished and that oral evidence for the same was not admissible. It further held that such certificate must accompany the electronic record like computer printout etc. pertaining to which a statement is sought to be given in evidence when the same is produced in evidence. It further held as under :-
"15. Under Section 65B(4) of the Evidence Act, if it is desired to give a statement in any proceedings pertaining to an electronic record, it is permissible provided the following conditions are satisfied:
(a) There must be a certificate which identifies the electronic record containing the statement;
(b) The certificate must describe the manner in which the electronic record was produced;
(c) The certificate must furnish the particulars of the device involved in the production of that record;
CS (COMM) No.: 373/23 Digitally Vasu Polymers (India) Pvt. Ltd. Vs. M/s Elite Packaging Page No. 23/35 signed by UMED UMED Date:
SINGH SINGH 05:01:50 2024.12.13 +0530 ~ 24 ~
(d) The certificate must deal with the applicable conditions mentioned under Section 65B(2) of the Evidence Act; and
(e) The certificate must be signed by a person occupying a responsible official position in relation to the operation of the relevant device.
16. It is further clarified that the person need only to state in the certificate that the same is to the best of his knowledge and belief. Most importantly, such a certificate must accompany the electronic record like computer printout, Compact Disc (CD), Video Compact Disc (VCD), pen drive, etc., pertaining to which a statement is sought to be given in evidence, when the same is produced in evidence. ..."
In "Arjun Panditrao Khotkar Vs. Kailash Kushanrao Gorantyal and Ors.", (Supra) the Hon'ble Apex court held that the requisite certificate under Section 65B of Indian Evidence Act can be produced so long as the hearing in a trial is not yet over and it can be of anyone of several persons dealing with computers or it may be of other person who may be in the management for relevant activities as mentioned in Section 65B (4) of the Act. It further held as under :-
"57. Subject to the caveat laid down in paragraphs 50 and 54 above, the law laid down by these two High Courts has our concurrence. So long as the hearing in a trial is not yet over, the requisite certificate can be directed to be CS (COMM) No.: 373/23 Vasu Polymers (India) Pvt. Ltd. Vs. M/s Elite Packaging Page No. 24/35 Digitally signed by UMED UMED SINGH Date:
SINGH 2024.12.13 05:01:57 +0530 ~ 25 ~ produced by the learned Judge at any stage, so that information contained in electronic record form can then be admitted, and relied upon in evidence.
58. It may also be seen that the person who gives this certificate can be anyone out of several persons who occupy a 'responsible official position' in relation to the operation of the relevant device, as also the person who may otherwise be in the 'management of relevant activities' spoken of in Sub-section (4) of Section 65B.
Considering that such certificate may also be given long after the electronic record has actually been produced by the computer, Section 65B(4) makes it clear that it is sufficient that such person gives the requisite certificate to the "best of his knowledge and belief" (Obviously, the word "and" between knowledge and belief in Section 65B(4) must be read as "or", as a person cannot testify to the best of his knowledge and belief at the same time)."
17. So, as per latest position of the law, it is not required that the certificate under Section 65B of Indian Evidence Act should be filed at the time of filing of the computer generated record. It can be filed at any stage. In the case in hand, perhaps it was filed subsequent to filing of the plaint and cannot be said to be bad in law.
Moreover, such certificate should not mandatorily be of the person who deals exclusively with the computer. Such a CS (COMM) No.: 373/23 Digitally Vasu Polymers (India) Pvt. Ltd. Vs. M/s Elite Packaging Page No. 25/35 UMED UMED signed by SINGH Date:
SINGH 2024.12.13 05:02:04 +0530 ~ 26 ~ person is not required to be in exclusive control of the computer. He should be one of the persons who occupy the responsible position regarding the operation of the computer or he should be in the management of the activities spoken of by Section 65B (4) of the Act. In the case in hand, PW1 and PW2 were amongst the persons who used to feed data in the computer. PW1 is one of the directors and hence he can be said to be in the management of activities as mentioned in Section 65B (4) of the Act. PW2 is the manager with the M/s Moongipa Roadways Private Ltd. and used to feed data in the computer and he can be said to be holding a responsible official position regarding the operation of the computer.
18. Moreover, it is mentioned in certificate PW1 that he has control over the computer and attached electronic devices and he used to feed all the transactions into the computer in the ordinary course of business. During that period, the computer operated properly and in that process, invoices, statement of account, interest calculation sheet and e-mails were printed on the paper in his presence, from the computer of the make Lenovo, serial no. PG01BKQ8, printer make HP Model Laserjet Pro MFP M126NW.
19. In view of the above discussion, it is held that certificates of PW1 and PW2 certificate under Section 65B of CS (COMM) No.: 373/23 Vasu Polymers (India) Pvt. Ltd. Vs. M/s Elite Packaging Page No. 26/35 Digitally signed by UMED UMED SINGH SINGH Date:
2024.12.13 05:02:11 +0530 ~ 27 ~ Indian Evidence Act are proper and in accordance with the law. They may not be sole persons who used to feed data but some of the data was fed by them also. They hold responsible positions in their companies.
20. As observed earlier, the certificates of PW1 and PW2 under Section 65B of Indian Evidence Act are as per law and hence it can be said that they have well proved the invoices, statement of account, calculation sheet, e-mail and statement of account of defendant no. 1 maintained by M/s Moongipa Roadways Private Ltd. as Ex. PW2/2. As the documents have been proved by annexing proper certificates, they cannot be deexhibited. Due to proper method of proof, they are said to have been duly proved as per the provisions of Indian Evidence Act and are being taken into account.
21. As mentioned above, Ex. PW2/2 is the account statement of defendant no. 1 maintained by M/s Moongipa Roadways Private Ltd.. It contains the detail like lorry receipt (LR) number, LR date, place of loading, destination, name of consigner and consignee, number of packets, actual weight, total amount of bills, method of receipt of bill amount and date of receipt of bill amount. Apparently, the record was maintained by M/s Moongipa Roadways Private Ltd. who is not party to the case. As per Civil Procedure Code as amended by the CS (COMM) No.: 373/23 Vasu Polymers (India) Pvt. Ltd. Vs. M/s Elite Packaging Page No. 27/35 Digitally signed by UMED UMED Date:
SINGH SINGH 2024.12.13 05:02:20 +0530 ~ 28 ~ Commercial Courts Act, the plaintiff is required to annexe photostate copy of all the documents relevant to the case. Ex. PW2/2 are the relevant statements. But those do not pertain to party to the suit. So, it cannot be said that plaintiff was in power, possession, custody and control of Ex. PW2/2 when the case was filed. It was not obligatory for it to file Ex. PW2/2 at the time of institution of the suit. Moreover, the plaintiff cannot be expected to know that M/s Moongipa Roadways Private Ltd. used to maintain so much exhaustive record of its dealing with third parties. Due to these reasons, the statement Ex. PW2/2 is being taken into account.
22. PW2 has been examined to prove delivery of the goods by plaintiff to defendant through M/s Moongipa Roadways Private Ltd.. Initially, he deposed that he was a summoned witness but later he corrected by deposing that he had not received summons in his own name. Summons were sent by the court in the name of M/s Moongipa Roadways Private Ltd. which authorised him vide letter Ex. PW2/1 to depose on behalf of company regarding the transaction between M/s Moongipa Roadways Private Ltd. and defendant no. 1. In cross- examination, he admitted that he did not use to go personally to deliver goods at Mumbai. He further made it clear that he was not personally aware whether the goods were delivered to defendant no. 1 or not. Simultaneously, he deposed that all the CS (COMM) No.: 373/23 Vasu Polymers (India) Pvt. Ltd. Vs. M/s Elite Packaging Page No. 28/35 Digitally signed by UMED UMED Date:
SINGH SINGH 2024.12.13 05:02:29 +0530 ~ 29 ~ invoices raised by his company for transporting goods to defendant no. 1 from plaintiff, were satisfied by defendant no. 1 by making the payment, detail of which is mentioned in Ex. PW2/2.
Though PW2 did not accompany the other officials of M/s Moongipa Roadways Private Ltd. at the time of delivery of the goods to defendant no. 1 but payment of invoices raised by the transporter, by defendant no. 1 as per PW2/2 conclusively prove that the delivery of the goods mentioned in 143 invoices had been effected upon the defendants.
23. In written statement, the defendants denied every assertion of the plaintiff without mentioning the reason of denial. They did not tell with their own version. But in the evidence of DW1, they came out with the story that they used to purchase goods from plaintiff but the plaintiff had supplied him goods only against 34 invoices along with lorry receipts Mark B. Comparison of Mark B with invoices and bilities filed by PW1 shows that they are one and the same thing. Even the invoices and bilties produced by DW1 in evidence do not bear signature or stamp of any person or official on behalf of defendant no. 1 as token of proof of goods. It shows that while giving delivery, the officials of M/s Moongipa Roadways Private Ltd. did not use to obtain signature, thumb impression or seal of any official of the defendants on invoices or lorry receipts and so, CS (COMM) No.: 373/23 Vasu Polymers (India) Pvt. Ltd. Vs. M/s Elite Packaging Page No. 29/35 Digitally signed by UMED UMED Date:
SINGH SINGH 2024.12.13 05:02:36 +0530 ~ 30 ~ the objection of counsel for defendant to that effect is of no consequence.
Statement Ex. PW2/2 shows that the defendants used to make payment to M/s Moongipa Roadways Private Ltd. after about 40 days of the delivery of the goods. In this regard, the deposition of PW2 that the goods used to be delivered to defendant no. 1 only after receipt of freight charges, seems to be exaggerated but that alone exaggeration does not prove that the goods were not delivered at all to defendant no. 1 by that transporter.
24. The credit period is mentioned as 40 days in mail Ex. PW1/5 but it is mentioned as 15 days in invoices. But mention of different credit period in different documents does not invalidate the case of the plaintiff because that fact is not at all related to the delivery of the goods. At the most, that point can be taken into account while calculating interest.
25. The present is a civil suit in which the standard of proof is preponderance of probability and not beyond reasonable doubt as in criminal cases. So, the plaintiff is not required to prove to the hilt that it had so much capacity to manufacture poly films as was delivered to the defendant. Moreover, in these modern days, if the production of an entity falls short of the target, it can arrange the same from other manufactures to deliver CS (COMM) No.: 373/23 Vasu Polymers (India) Pvt. Ltd. Vs. M/s Elite Packaging Page No. 30/35 Digitally signed by UMED UMED SINGH Date:
SINGH 2024.12.13 05:02:45 +0530 ~ 31 ~ to the old customers to maintain reputation in daily changing market.
26. The plaintiff had given notice Ex. PW1/11 under Order XII rule 8 CPC to defendants to produce in court its statement of account, bank statement regarding purchase of material from plaintiff and GST returns from 24.02.2018 to 19.08.2019. The notice was delivered to the defendant vide tracking report Ex. PW1/12 on 08.07.2021. Despite service, the defendants did not produce the requisite record. So, adverse inference is drawn against them for withholding the essential record.
In cross-examination, DW1 deposed that he did not have access to GSTR 2A. But as per CGST Act, whenever the supplier makes entry of the sold goods on the portal of GST, the same is autopopulated in the form of GSTR 2A. Just when the plaintiff entered the transaction detail on the GST portal, the defendants had come to know of the same and despite it, they withheld GSTR 2A without any reason. In cross-examination also, he was asked to produce GSTR 2A but he refused. He deposed that he did not use to maintain statement of any account with respect to transactions with plaintiff. But that statement seems to be totally false because any person doing business in crores, maintain the incoming and out going flow of goods and payment made. In the case in hand, all these documents have been withheld deliberately by defendants. They did not file CS (COMM) No.: 373/23 Vasu Polymers (India) Pvt. Ltd. Vs. M/s Elite Packaging Page No. 31/35 Digitally signed by UMED UMED SINGH Date:
SINGH 2024.12.13 05:02:53 +0530 ~ 32 ~ record of the payment made to M/s Moongipa Roadways Pvt. Ltd. though, it is said to have been made online.
In written statement, the defendants did not come out with specific case as to the total amount of goods purchased by them, the total amount paid and what was the outstanding, if any. But in cross-examination, the defendant no. 3 came out with new version that he had received goods from plaintiff for which he made payment of Rs. 87 lacs through online mode and Rs. 20 lacs in cash. He did not place on record any document regarding payment of cash. He did not examine any witness in support of that contention. He did not mention the date and place of that payment.
27. The defendant nos. 1, 2 and 3 had filed a joint written statement. Defendant no. 2 expired during pendency of the trial and thereafter his wife was impleaded as LR as his other LR i.e. son was already a party as defendant no. 3. The wife was allowed by Hon'ble High Court to file written statement. Perusal of the record shows that the defendants did not file statement of truth and affidavit of admission/denial of documents in support of their written statements and hence their pleadings cannot be said to be the written statement and the documents filed by plaintiff are deemed to have been admitted.
CS (COMM) No.: 373/23 Vasu Polymers (India) Pvt. Ltd. Vs. M/s Elite Packaging Page No. 32/35 Digitally signed by UMED UMED Date:
SINGH SINGH 05:03:01 2024.12.13 +0530 ~ 33 ~
28. The plaintiff has claimed interest @ 18% per annum from the date of becoming due.
The defendants had sent e-mail Ex. PW1/5 to the plaintiff proposing credit period of 40 days. It is not mentioned what shall be the rate of interest if the payment was not made within the credit period. But in all invoices, the credit period is mentioned as 15 days. It is next mentioned that if the payment was not made within that period, interest @ 24 % per annum shall be charged.
In response to mail Ex. PW1/5, the plaintiff had sent goods to the defendant through 143 invoices mentioning the grace period as 15 days. It means that proposal by the defendants was that the credit period should be 40 days but that period was not acceptable to the plaintiff and that is why he delivered goods vide invoices mentioning the credit period as 15 days. The defendants had every right to differ on that point from the plaintiff. Despite receipt of goods and invoices, they did not raise any objection and kept on receiving goods suggesting that they had also consented to grace period of 15 days.
29. The rate of interest mentioned as 24% in invoices is not only excessive but penal also. Taking into account the fact that transactions were commercial in nature, appropriate and justified rate of interest is taken as 12% per annum and is granted accordingly on invoice amount from the date of their becoming CS (COMM) No.: 373/23 Vasu Polymers (India) Pvt. Ltd. Vs. M/s Elite Packaging Page No. 33/35 Digitally signed by UMED UMED Date:
SINGH SINGH 05:03:09 2024.12.13 +0530 ~ 34 ~ due till payment/realisation. As per calculation sheet, filed by plaintiff, the said amount comes out to Rs. 31,14,541/- till payment/filing of suit.
So, the plaintiff is entitled to principal amount of Rs. 1,58,47,218/- + interest @ 12% Rs. 31,14,541/- = Rs. 1,89,61,769/- from defendant no. 1 and defendant no. 3 jointly and severally and also against the estate acquired by the wife of erstwhile defendant no. 2 from defendant no. 2.
30. In view of above discussion, this issue is decided in favour of plaintiff and against defendants.
Issue No. 231. The result of the suit, as explained in issue nos. 1A, 1B and 1, has gone in favour of the plaintiff. So, the plaintiff shall be entitled to cost also.
Issue no. 3
32. Consequent to decision on above issues, the plaintiff is entitled to principal amount of Rs. 1,58,47,218/- + interest @ 12% Rs. 31,14,541/- = Rs. 1,89,61,769/- from defendant no. 1 and defendant no. 3 jointly and severally and also against the estate acquired by LR/wife of erstwhile defendant no. 2 from, defendant no. 2. Plaintiff is entitled to cost also.
CS (COMM) No.: 373/23 Vasu Polymers (India) Pvt. Ltd. Vs. M/s Elite Packaging Page No. 34/35 Digitally signed by UMED UMED Date:
SINGH SINGH 2024.12.13 05:03:17 +0530 ~ 35 ~ Decree sheet be prepared accordingly. File be consigned to Record Room.Digitally signed
Announced in open court UMED by UMED SINGH on 13th day of December, 2024 SINGH 05:03:25 +0530 Date: 2024.12.13 (UMED SINGH GREWAL) District Judge-Commercial Court-02 North District, Rohini Court, Delhi.
CS (COMM) No.: 373/23 Vasu Polymers (India) Pvt. Ltd. Vs. M/s Elite Packaging Page No. 35/35