Delhi District Court
M/S V. Automat And Instruments Pvt. Ltd vs Gmw Pvt. Ltd on 17 December, 2025
IN THE COURT OF DR. NEERA BHARIHOKE
DISTRICT JUDGE (COMMERCIAL COURT)-06
SOUTH EAST, SAKET COURTS,
NEW DELHI
CNR No. DLSE01-008132-2004
CS (COMM) No.2967/2024
M/s V. Automat & Instruments Pvt. Ltd.
Having its registered office at:
F-61, Okhla Industrial Area, Phase-I,
New Delhi-110020
(Through its Authorized Representative)
... Plaintiff
Versus
GMW Pvt. Ltd.
Ansal API Corporate Park,
Unit No.1107, Tower-A-I,
Plot No. 7A,
Sector-142, Behind Advant Navis,
Noida-Gr.Noida Expressway,
Noida, U.P. - 201 304.
(Through its Managing Director /
Authorized Signatory)
....Defendant
Date of institution of the suit : 07.08.2024
Date on which judgment was reserved : 09.12.2025
Date of pronouncement of Judgment : 17.12.2025
JUDGMENT
SUIT FOR RECOVERY
1. By way of this judgment, I shall decide the suit of the Plaintiff filed for recovery of Rs.8,65,260/- alongwith interest.
NEERA BHARIHOKE CS (COMM) No. 2967/2024 M/s V. Automat and Investment Pvt. Ltd. Vs. GMW Pvt. Ltd. Page 1 of 30 Digitally signed by NEERA BHARIHOKE Date: 2025.12.17 15:26:36 +0530 CASE OF THE PLAINTIFF AS SET UP IN THE PLAINT
2. Brief facts of the case as stated by the Plaintiff in the plaint are that:
a) Plaintiff is a Private Limited Company and is engaged in business of manufacturing of level, flow, pressure and gas instruments and process control instruments. The present suit has been filed through Shri Devendra Kumar, Authorized Representative of the Plaintiff, who has been authorized vide Board Resolution dated 27.06.2024 to file the present suit on behalf of the Plaintiff.
b) Defendant had been negotiating/dealing with the Plaintiff through its Directors/Authorized Representative. Defendant had been purchasing goods from the Plaintiff. Defendant had placed various orders for goods through purchase orders and the Plaintiff had duly supplied the goods as per orders placed by the Defendant.
The Plaintiff raised invoices for the goods supplied to the Defendant. However, the Defendant did not raise any objection or discrepancy in the invoices and the statements so sent. Thus, the Defendant had no claim of dispute/discrepancy in the accounts maintained by the Plaintiff: As per statement of account contained in the books of account maintained by the Plaintiff during the course of business, the total outstanding as on date of filing of the present suit was Rs.8,65,260/-.
NEERA BHARIHOKE CS (COMM) No. 2967/2024 M/s V. Automat and Investment Pvt. Ltd. Vs. GMW Pvt. Ltd. Page 2 of 30 Digitally signed by NEERA BHARIHOKE Date: 2025.12.17 15:26:42 +0530
c) As per running statement of account maintained in due course of business by the Plaintiff, the Defendant was liable to pay a sum of Rs.8,65,260/- against various invoices raised by Plaintiff during the past which were yet to be liquidated by the Defendant.
d) Despite various requests and reminders through telephone and in writing, the Defendant failed to make the payment of due amount and as on date of filing of the present suit, a sum of Rs.8,65,260/- was due and payable towards principal and interest @ 24% per annum by the Defendant to the Plaintiff.
e) Vide legal notice dated 29.09.2021, sent through registered post on 29.09.2021, the Plaintiff called upon the Defendant to make the due payment of Rs.8,65,260/- alongwith interest @ 24% per annum till realization. The notice had been sent to the last known and correct addresses of the Defendant. Thus, the Defendant had been duly served.
f) The Plaintiff preferred a Pre-litigation/Pre-Institution Mediation before the Competent Authority, i.e. SEDLSA, on 21.12.2023, however Defendant did not appear before the Competent Authority. Furthermore, the Non-Starter Report for the Pre-Institution Mediation was issued by the Competent Authority, SEDLSA, dated 13.03.2024.
3. Hence, the present suit was filed. NEERA BHARIHOKE Digitally signed CS (COMM) No. 2967/2024 M/s V. Automat and Investment Pvt. Ltd. Vs. GMW Pvt. Ltd. Page 3 of 30 by NEERA BHARIHOKE Date: 2025.12.17 15:26:48 +0530 CASE OF THE DEFENDANT AS SET UP IN THE WRITTEN STATEMENT
4. Brief facts of the case as stated by the Defendant in the Written Statement are that:
Preliminary Objections / Submissions:
a) No cause of action has arisen within the jurisdiction of this Court. Defendant placed the order from its Registered/Head office at Vadodara which was the billing address on which the invoice had been raised. The material was supplied by Plaintiff at PO-
Kashimpura, Aligarh, U.P. No cause of action had arisen within the jurisdiction of this Court. Hence, this Court has no territorial jurisdiction to try the present suit.
b) The Plaintiff has deliberated concealed material facts which are stated hereinafter and has deliberately misled this Court. The Statement of Truth filed by Plaintiff is false, which is evident from the facts stated hereinafter.
c) Purchase order dated 05th February 2019 was placed upon the Plaintiff after discussion between Mr. Praveen Kumar of the Plaintiff and Shri Davinder Singh and Shri Jitender Singh of the Defendant. Plaintiff was aware and it is also recorded in the purchase order that the material for which the order was placed upon Plaintiff was to be supplied against the order received from NEERA BHARIHOKE CS (COMM) No. 2967/2024 M/s V. Automat and Investment Pvt. Ltd. Vs. GMW Pvt. Ltd. Page 4 of 30 Digitally signed by NEERA BHARIHOKE Date: 2025.12.17 15:26:55 +0530 TOSHIBA by the Defendant. The purchase order was in respect to material/goods referred to as Main Supply and Spare Supply.
d) Defendant supplied the material referred as Main Supply in the purchase order dated 05th February 2019 at site and raised Invoices for sum of Rs. l2,07,140/- and Rs.1,58,120/-. The material supplied was under guarantee for a period of 18 months from date of supply or 12 months from the date of commencement. Five transmitters supplied by Plaintiff did not work properly on commencement. Plaintiff was required to get the same checked and repaired at site. Despite various requests, Plaintiff failed to get them repaired, thereby failing to discharge its obligations. Constrained in the circumstances, the transmitters were purchased at the cost and risk of the Defendant by M/s TOSHIBA and a sum of Rs.4,54,500/- had been adjusted/deducted by TOSHIBA from the amount payable to Defendant. Since Plaintiff failed to discharge its obligations, therefore, loss caused to the Defendant on the said account was the liability of Plaintiff. Thus, a sum of Rs.4,54,500/- had been adjusted/debited in ledger of the Plaintiff way back on 1st April 2023. Plaintiff was aware of the said adjustment. It was the Plaintiff who approached TOSHIBA and supplied the transmitters as above.
e) Two more transmitters did not work on commissioning. Since the same were required to be repaired urgently, therefore, Defendant delivered it to the Plaintiff. Plaintiff failed to repair or deliver it to Defendant and usurped the same. In lieu of the aforesaid two NEERA BHARIHOKE CS (COMM) No. 2967/2024 M/s V. Automat and Investment Pvt. Ltd. Vs. GMW Pvt. Ltd. Page 5 of 30 Digitally signed by NEERA BHARIHOKE Date: 2025.12.17 15:27:03 +0530 transmitters, a sum of Rs.2,91,406/- was recovered by TOSHIBA and/or incurred by the Defendant which was the liability of Plaintiff. Thus, Rs.2,91,406/- had been debited in the ledger of Plaintiff.
f) Plaintiff failed to supply the material referred to as Spare Supply to the Defendant. On the contrary, Plaintiff, in breach of settled norms of the commercial transaction business, supplied the said material directly to TOSHIBA. As per the purchase order, Plaintiff was to supply five items, being Spare Supply, against the total cost of Rs.3,79,500/-. Plaintiff directly supplied the said material to TOSHIBA for which TOSHIBA charged/deducted from the amounts payable to the Defendant a sum of Rs.5,70,570/-. Consequently, a sum of Rs.1,91,070/- was the loss caused on account of mal-practice adopted by the Plaintiff. Thus, a sum of Rs.1,91,070/- was adjusted/set off and debited in the ledger of the Plaintiff maintained by the Defendant in regular course of business.
g) Defendant was maintaining its books of accounts in regular course of business which were duly audited by the Chartered Accountant. As per the ledger of Plaintiff maintained by Defendant in regular course of business, after adjustment of the aforesaid amounts/losses caused by the Plaintiff, it was the Defendant who was entitled to recover a sum of Rs.1,21,716/- from the Plaintiff.
h) The ledger filed by Plaintiff was manipulated as it did not disclose the entire payments made to the Plaintiff. Besides a sum of NEERA BHARIHOKE CS (COMM) No. 2967/2024 M/s V. Automat and Investment Pvt. Ltd. Vs. GMW Pvt. Ltd. Page 6 of 30 Digitally signed by NEERA BHARIHOKE Date: 2025.12.17 15:27:11 +0530 Rs.5 Lacs, another sum of Rs.50,000/- was transferred/paid online to the Plaintiff on 10th April 2021. The said payment was made from SBI Account of Defendant vide NEFT UTR No. SBIN121100502657. The said amount had not been shown in the ledger filed by Plaintiff. The books of accounts of Plaintiff were manipulated.
Reply on merits:-
i) It was denied that Shri Devendra Kumar was conversant with the facts of the case or was competent to sign or verify plaint or institute the present suit. It was denied that Defendant did not raise any objection or discrepancy in the invoices or the statement sent by the Plaintiff.
j) The material supplied by Plaintiff was faulty and total seven transmitters were replaced by TOSHIBA at the cost of Defendant.
The two transmitters which were delivered to Plaintiff for repair were not even returned by Plaintiff. It was denied that there was no dispute or discrepancy with regard to accounts maintained by Plaintiff or a sum of Rs.8,65,260/- or any other amount was due or payable by Plaintiff. A sum of Rs.50,000/- received by Plaintiff had not even been reflected in the ledger. Defendant has placed on record ledger maintained by the Defendant in regular course of business which establishes beyond any doubt that a sum of Rs.1,21,716/- was payable by the Defendant.
NEERA BHARIHOKE CS (COMM) No. 2967/2024 M/s V. Automat and Investment Pvt. Ltd. Vs. GMW Pvt. Ltd. Page 7 of 30 Digitally signed by NEERA BHARIHOKE Date: 2025.12.17 15:27:18 +0530
k) In any case, the alleged sum of Rs.8,65,260/- was already deducted or adjusted/set off on account of non-supply and losses suffered by Defendant owing to the acts of the Plaintiff.
l) Plaintiff had concealed the material facts from this Court vis- a-vis receipt of additional sum of Rs.50,000/- and the material supplied by Plaintiff was faulty and was returned to it for repair/rectification. The part of material received by Plaintiff for repair/rectification was not returned by the Plaintiff. In breach of all ethics and norms of the business, Plaintiff supplied material for which order was placed by Defendant directly to M/s TOSHIBA.
m) It was the Plaintiff who had indulged in unethical trade practice and had caused loss to the Defendant. It was denied that Defendant had failed to make any amount or was liable to pay interest much less @ 24% per annum. The correspondence/mails exchanged with the Plaintiff, which were filed simultaneously, revealed that Plaintiff had not returned faulty material supplied by it which was given to it repair. Plaintiff had concealed the material facts and mail exchanged between the parties.
n) Plaintiff deliberately did not send notice to the registered office on which address the invoice had been raised. It was denied that there was any cause of action in favour of Plaintiff or against the Defendant to institute the present suit.
NEERA BHARIHOKE Digitally signed CS (COMM) No. 2967/2024 M/s V. Automat and Investment Pvt. Ltd. Vs. GMW Pvt. Ltd. Page 8 of 30 by NEERA BHARIHOKE Date: 2025.12.17 15:27:25 +0530
5. Relying on the said averment, the Defendant has submitted that there is no merit in the present suit, and it deserves to be dismissed.
REPLICATION OF THE PLAINTIFF
6. Replication has been filed by the Plaintiff, wherein the Plaintiff has denied the contents of the Written Statement and reiterated the contents of the plaint.
ADMISSION / DENIAL OF DOCUMENTS
7. On 08.01.2025, Plaintiff admitted two documents of the Defendant i.e. Purchase order dated 05.02.2019 and e-mails exchanged with Plaintiff. The same were exhibited as Ex. D-1 and Ex. D-2 (collectively). Affidavit of admission/denial filed by Defendant was not as per provisions of Commercial Courts Act. However, the Defendant admitted tax invoices Ex. P-1 and Ex. P-2 respectively. Thereafter, admission/denial of documents stood concluded.
FRAMING OF ISSUES
8. Vide order dated 08.01.2025, on the pleadings of the parties, the following issues were framed :-
(1) Whether the plaintiff is entitled to recovery of suit amount? OPP.
(2) Whether the plaintiff is entitled to interest on the suit amount? If yes, at what rate and for which period? OPP.
NEERA BHARIHOKE CS (COMM) No. 2967/2024 M/s V. Automat and Investment Pvt. Ltd. Vs. GMW Pvt. Ltd. Page 9 of 30 Digitally signed by NEERA BHARIHOKE Date: 2025.12.17 15:27:31 +0530 (3) Whether this court lacks territorial jurisdiction? OPD.
(4) Whether the defendant paid to the plaintiff a sum of Rs. 50,000/-
on 10.04.2021? OPD.
(5) Cost. (6) Relief.
9. Issue No.3 was treated as Preliminary Issue and vide order dated 06.02.2025, Issue No.3 was decided against the Defendant and in favour of the Plaintiff.
10. Vide order dated 03.04.2025, corrected affidavit of evidence was filed on behalf of the Plaintiff and the application under Order VIII Rule 1A CPC read with Order XI Rule 1 (10) CPC was allowed as the same was not opposed and the additional document i.e. certified copy of Bank Statement of Defendant was taken on record.
11. Vide order dated 23.04.2025, the parties were referred for mediation, but the matter could not be settled and the matter was adjourned for Plaintiff's Evidence for 08.08.2025.
PLAINTIFF'S EVIDENCE
12. On 08.08.2025, Plaintiff examined PW-1 Shri Devendra Kumar. He presented his evidence by way of affidavit vide Ex. PW-1/A. He reiterated the contents of the plaint and relied upon the following documents: -
NEERA CS (COMM) No. 2967/2024 M/s V. Automat and Investment Pvt. Ltd. Vs. GMW Pvt. Ltd. Page 10 of 30 BHARIHOKE Digitally signed by NEERA BHARIHOKE Date: 2025.12.17 15:27:57 +0530 (1) Board Resolution dated 27.06.2024 as Ex.PW-1/1 (objected to Ld. Counsel for Defendant on mode of proof).
(2) Purchase orders as Ex.PW-1/2 (colly.). (objected to being photocopy of printout).
(3) E-way Bills as Ex.PW-1/3 (colly.). (objected to being photocopy of printout).
(4) Tax invoices raised by the plaintiff as Ex.PW-1/4 (colly.). (already exhibited as Ex. P-1 and Ex. P-2).
(5) Ledger account of defendant maintained by the plaintiff as Ex.PW-
1/5. (Objected to on mode of proof).
(6) Computer downloaded trail of emails as Ex.PW-1/6 (colly.).
(7) Office copy of legal notice as Ex.PW-1/7. (8) Postal envelope received back as Ex.PW-1/8. (9) Non-starter Report as Ex.PW-1/9.
13. It was directed that Ex.PW-1/4 (colly.) would be treated as Ex. P-1 and Ex. P-2. Ex.PW-1/2 and Ex.PW-1/3 were de-exhibited and marked as Mark A and Mark B respectively with liberty to prove them by summoning the relevant witness or record.
14. PW-1 was cross examined by learned Counsel for Defendant and discharged on 08.08.2025. On the same day, Plaintiff's Evidence was NEERA BHARIHOKE CS (COMM) No. 2967/2024 M/s V. Automat and Investment Pvt. Ltd. Vs. GMW Pvt. Ltd. Page 11 of 30 Digitally signed by NEERA BHARIHOKE Date: 2025.12.17 15:29:28 +0530 closed on the statement of Shri Devendra Kumar, Authorized Representative of the Plaintiff.
DEFENDANT'S EVIDENCE
15. Defendant examined DW-1 Shri Roopesh Kumar on 06.10.2025. He presented his evidence by way of affidavit vide Ex. DW-1/A. He reiterated the contents of the Written Statement and relied upon the following documents: -
i. Board Resolution dated 05.11.2024 as Ex. DW-1/1. ii. Purchase Order dated 05.02.2019 is already exhibited as Ex. D-1. iii. Printout of emails exchanged with Plaintiff as already exhibited as Ex. D-2.
iv. Printout of emails with attachments exchanged with M/s Toshiba as Ex. DW-1/2.
v. Affidavit of Declaration under Order XI Rule 6 CPC read with Section 63 Bhartiya Sakshya Adhiniyam as Ex. DW-1/3. vi. Printout of ledger for the period 01.04.2019 to 29.05.2023 as Ex.
DW-1/4.
16. DW-1 was cross-examined and discharged on 06.10.2025.
17. At request of learned counsel for Defendant, Defendant's Evidence was closed on 04.11.2025 and the matter was adjourned for final arguments.
NEERA BHARIHOKE Digitally signed CS (COMM) No. 2967/2024 M/s V. Automat and Investment Pvt. Ltd. Vs. GMW Pvt. Ltd. Page 12 of 30 by NEERA BHARIHOKE Date: 2025.12.17 15:29:37 +0530 FINAL ARGUMENTS
18. Learned Counsel for Plaintiff argued that the Defendant had placed order for goods through purchase order, Ex. D-1, which has not been disputed, and the Plaintiff had duly supplied the goods as per the said order placed by the Defendant. Thereafter Plaintiff raised invoices against those goods. He also argued that Defendant did not raise any objection or discrepancy in the invoices and made part-payment also due under the said invoices. Learned counsel for Plaintiff also invited attention to e-mails placed on record by the Defendant exchanged with Plaintiff, Ex. D-2, as well as the emails exchanged between the parties placed on record by the Plaintiff which were again not disputed and submitted that the Defendant had admitted its liability under the invoices for which the present suit has been filed and therefore the suit deserves to be decreed in favour of the Plaintiff.
19. Per contra, learned Counsel for Defendant argued that the Plaintiff had deliberated concealed material facts and had deliberately misled this Court. He also argued that the present suit has not been instituted by a duly authorized person. Learned Counsel for Defendant submitted that Plaintiff was aware that the material for which the order was placed upon Plaintiff was to be supplied against the order received from TOSHIBA by the Defendant as it was also recorded in the purchase order It was further submitted that purchase order was in respect to material/goods referred as Main Supply and Spare Supply. But the Plaintiff supplied only the material referred to as Main Supply which was under guarantee for a period of 18 NEERA BHARIHOKE CS (COMM) No. 2967/2024 M/s V. Automat and Investment Pvt. Ltd. Vs. GMW Pvt. Ltd. Page 13 of 30 Digitally signed by NEERA BHARIHOKE Date: 2025.12.17 15:29:42 +0530 months from date of supply or 12 months from the date of commencement, whichever was later. She submitted that five transmitters supplied by Plaintiff did not work properly on commencement and Plaintiff did not get them repaired. Therefore, transmitters were purchased at the cost and risk of the Defendant by M/s TOSHIBA and a sum of Rs.4,54,500/- had been adjusted/deducted by TOSHIBA from the amount payable to Defendant. Learned Counsel for Defendant argued that two more transmitters did not work on commissioning and Plaintiff did not repair those too and a sum of Rs.2,91,406/- was recovered by TOSHIBA and/or incurred by the Defendant which was the liability of Plaintiff. Thus, Rs.2,91,406/- had been debited in the ledger of Plaintiff. Learned Counsel for Defendant argued that after adjustment of the aforesaid amounts/losses caused by the Plaintiff, it was the Defendant who was entitled to recover a sum of Rs.1,21,716/- from the Plaintiff. It was also argued on behalf of Defendant that ledger of the Defendant maintained by the Plaintiff is manipulated as the same did not reflect payment of Rs.50,000/- paid by Defendant to the Plaintiff. Learned Counsel for Defendant submitted that the suit deserves to be dismissed.
20. I have heard the rival submissions of the parties and perused the record very carefully.
FINDINGS
21. The Defendant has raised an objection that submission of Plaintiff that Shri Devendra Kumar has been authorized vide Board Resolution NEERA BHARIHOKE CS (COMM) No. 2967/2024 M/s V. Automat and Investment Pvt. Ltd. Vs. GMW Pvt. Ltd. Page 14 of 30 Digitally signed by NEERA BHARIHOKE Date: 2025.12.17 15:29:48 +0530 dated 27.06.2024 to file the present suit on behalf of the Plaintiff is wrong and denied that Shri Devendra Kumar is competent to institute the suit on behalf of the plaintiff company.
22. On perusal of Board Resolution dated 27.06.2024, it is noticed that the same authorizes Shri Devendra Kumar to appear, represent, contest and sign any document including engaging any advocate, contest and signing Vakalatnama, affidavit and pleading on behalf of company V. Automat and Instruments (P) Ltd. in all the court cases (Civil and Criminal), but no authority has been given to him to institute the suit.
23. No separate issue was framed in respect of authority of Shri Devendra Kumar to institute the present suit against the Defendant on the basis of this Board Resolution. However, a specific objection was taken by the Defendant in the Written Statement and PW-1 was also cross- examined in this regard. When PW-1 tendered Board Resolution dated 27.06.2024 in his examination in chief as Ex.PW1/1, its tendering was objected to by learned Counsel for Defendant on mode of proof. In his cross-examination, PW-1 stated that he did not know and the Admin would know if the Board Resolution dated 27.06.2024 was recorded in the Minutes Book. PW-1 also stated that he was working with the Plaintiff company as Legal Assistant. PW-1 was not the Director of Plaintiff company.
24. Learned Counsel for the Defendant argued that signing and verifying the suit is one thing whereas having the authority to institute the NEERA BHARIHOKE CS (COMM) No. 2967/2024 M/s V. Automat and Investment Pvt. Ltd. Vs. GMW Pvt. Ltd. Page 15 of 30 Digitally signed by NEERA BHARIHOKE Date: 2025.12.17 15:29:55 +0530 suit is another. There is nothing on record to show that Shri Devendra Kumar was authorized by the Board of Directors of the Plaintiff to file the suit. She stated that institution of a suit is different from filing of a suit. Furthermore, there is nothing on record to show that Shri Devendra Kumar was able to depose to the facts of the case or that he was conversant with the facts of the case as he himself admitted in his cross-examination that Sh. Praveen Kumar working with the Plaintiff as sales person dealt with Sh. Devendra Singh and Sh. Jatinder Singh of the Defendant and contract/purchase order was finalized. Learned Counsel for Defendant submitted that Order XXIX Rule 1 CPC only speaks about signing and verification of the pleadings on behalf of the company but does not talk about institution of suits. Defendant relied on observations of Hon'ble High Court of Delhi in the matter of Nibro Ltd. vs National Insurance Co. Ltd., AIR 1991 DELHI 25. It was observed therein as:
"27. On the analysis of the judgments, it is clear that Order 29, Rule 1 of the Code of Civil Procedure does not authorise persons mentioned therein to institute suits on behalf of the corporation. It only authorises them to sign and verify the pleadings on behalf of the corporation.
28. In my view, the provisions of the Companies Act, 1956 and particularly sections 14, 26, 28; Schedule I, Table A and section 291 are very clear.
29. It is well-settled that under section 291 of the Companies Act except where express provision is made that the powers of a company in respect of a particular matter are to be exercised by the company in general meeting, in all other cases the board of directors are entitled to exercise all its powers. Individual directors have such powers only as are vested in them by the memorandum and articles. It is true that ordinarily the court will not unsuit a NEERA BHARIHOKE CS (COMM) No. 2967/2024 M/s V. Automat and Investment Pvt. Ltd. Vs. GMW Pvt. Ltd. Page 16 of 30 Digitally signed by NEERA BHARIHOKE Date: 2025.12.17 15:30:02 +0530 person on account of technicalities. However, the question of authority to institute a suit on behalf of a company is not a technical matter. It has far-reaching effects. It often affects the policy and finances of the company. Thus , unless a power to institute a suit is specifically conferred on a particular director, he has no authority to institute a suit on behalf of the company. Needless to say such a power can be conferred by the board of directors only by passing a resolution in that regard.
Chapter IV of the Delhi High Court (Original Side) Rules deals with the question of presentation of suits. Under this rule, a suit can be presented by a duly authorised agent or by an advocate duly appointed by him for the purpose. This authorisation, in my view, in the case of a company can be given only after a decision to institute a suit is taken by the board of directors of the company. Th board of directors may in turn authorise a particular director, principal officer or the secretary to institute a suit.
30. The plaintiff has not placed on record nay resolution passed by the company authorising Shri G. Jhajharia to institute the suit. Shri G. Jhajharia did not come forward to make a statement that he was in a position to depose to the facts of the case. In the plaint signed by him, he claims to be a principal officer and director, but there is no evidence on record to indicate that he had the authority to institute the suit. The memorandum and articles of association of the plaintiff company are also not placed on record. Even after the suit was instituted by Shri G. Jhajharia, no resolution was passed by the company ratifying this action. No such decision of the board of directors is placed on record in the present case. The plaintiff has examined Shri Ashok Kumar Jhajharia. He has placed on record, exhibit PW-2/1, which is the resolution of the board of directors reappointing Shri8i G. Jhajharia as the director but this resolution does not empower Shri G. Jhajharia as a director to institute the present suit. Shri Ashok Kumar Jhajharia has stated that he was handling the day-to-day management of the plaintiff company including the insurance part of it. He, however, does not state that Mr. G. Jhajharia was handling the day-to-day management or was in charge of the insurance claim.
NEERA BHARIHOKE CS (COMM) No. 2967/2024 M/s V. Automat and Investment Pvt. Ltd. Vs. GMW Pvt. Ltd. Page 17 of 30 Digitally signed by NEERA BHARIHOKE Date: 2025.12.17 15:30:09 +0530
31. Thus, there is no evidence to prove that Shri G. Jhajharia had the authority to institute the present suit.
32. Issue No.4 is thus decided against the plaintiff and in favor of the defendant."
25. Learned Counsel for Plaintiff argued that though there is no original authorization in favour of Shri Devendra Kumar, a subsequent ratification could render it legitimate and thus plaintiff cannot be non-suited.
26. Similar plea was taken by Plaintiff in the matter of Rajghria Paper Mills Ltd. vs The General Manager, Indian Security, AIR 2000 DELHI
239. However, the same was rejected by Hon'ble High Court of Delhi and it was observed that:
"It was contended by Sh. J. Lal that said K.L. Rajgarhia had the authority to file the suit, he being one of the directors of the company. In support of the submission, he invited my attention to the provisions contained in Order 29 Rule 1 CPC and also the decision in United Bank of India Vs. Naresh Kumar and Others, AIR 1997 SC 3. Rule 1 of the said Order 29 deals with signing and verification of the plaint and not the institution of the suit by or against the Corporation. ...
In the decision in M/s. Nibro Ltd. vs National Insurance Co. Ltd. after taking note of a series of decisions on the subject the view taken by this Court was that unless power to institute suit is specifically conferred on a particular director, he has no authority to institute suit on behalf of the company. It must, therefore, follow that although the plaint was signed and verified properly but the suit was not instituted by a duly authorised person on behalf of the plaintiff. Issue is answered accordingly."
NEERA BHARIHOKE CS (COMM) No. 2967/2024 M/s V. Automat and Investment Pvt. Ltd. Vs. GMW Pvt. Ltd. Page 18 of 30 Digitally signed by NEERA BHARIHOKE Date:
2025.12.17 15:30:15 +0530
27. Learned Counsel for Plaintiff submitted that the objection taken by the defendant is technical in nature and that the technical defects regarding authorization should not defeat legitimate claim more so when the said technical defect can be cured by subsequent rectification by the plaintiff Company. Reliance has been placed by the plaintiff on the observations of Hon'ble Supreme Court in the matter of United Bank of India versus Naresh Kumar and Ors. (1996) 6 SCC 660. Learned counsel for Plaintiff submitted that in the said judgment it was held that a company can cure the defect of authorization by ratification at a later stage.
28. It is noticed that said observation was made by Hon'ble Supreme Court after referring to Order XXIX Rule 1 CPC and Order VI Rule 14 CPC and it was observed that in a suit by or against a Corporation, even in absence of any formal letter of authority or power of attorney having been executed a person referred to in Order XXIX Rule 1 CPC, by virtue of the office which he holds, sign and verify the pleadings on behalf of the corporation. It was also observed that in addition there to an de hors Order XXIX Rule 1 CPC as a company is a juristic entity, it can duly authorize any person to sign the plant or the written statement on its behalf and this would be regarded sufficient compliance with the provisions of Order VI Rule 14 CPC. It was also observed that:
"A person may be expressly authorized 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 favor of any individual. In absence thereof and in cases where pleadings have been signed by one of its officers, a corporation can rectify the said action of its officer in signing the NEERA CS (COMM) No. 2967/2024 M/s V. Automat and Investment Pvt. Ltd. Vs. GMW Pvt. Ltd. Page 19 of 30 BHARIHOKE Digitally signed by NEERA BHARIHOKE Date: 2025.12.17 15:30:22 +0530 pleadings. Such ratification can be expressed or implied. The Court can, on the basis of evidence on the record, and after taking all the circumstances of the case, especially 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 its officer."
29. The observations made in this matter do not come to aid the case of the plaintiff since the observations of United Bank of India versus Naresh Kumar and Ors. (Supra) do not deal with the institution of the suit but with the signing of the Pleadings. Further in the said matter, it was the Director of the plaintiff company who had signed the pleadings in absence of a specific authorization. However, in the present case, Mr. Devendra Kumar, who signed the pleadings and represented the Plaintiff including appearing as the sole witness of the Plaintiff, is working with the Plaintiff company as Legal Assistant and is not the Director of Plaintiff Company and therefore the Plaintiff cannot seek any shelter even under provisions of Order XXIX Rule 1 CPC and Order VI Rule 14 CPC which are even otherwise not applicable to institution of the suit as held in the matter of Rajghria Paper Mills Ltd. vs The General Manager, Indian Security, (Supra) and M/s. Nibro Ltd. vs National Insurance Co. Ltd. (Supra).
30. The reliance of plaintiff on the observations made in the matter of Alcon Electronics Pvt. Ltd. versus Celem S.A., 2015 (4) BomCR107 for similar reasons does not support the case of the plaintiff since the said matter also deals with Order XXIX Rule 1 CPC and Order VI Rule 14 CPC where it was held that even if there is no specific resolution passed by the plaintiff company authorizing its director to file a suit on behalf of the company, plaint cannot be rejected and it is at the most a procedural NEERA BHARIHOKE CS (COMM) No. 2967/2024 M/s V. Automat and Investment Pvt. Ltd. Vs. GMW Pvt. Ltd. Page 20 of 30 Digitally signed by NEERA BHARIHOKE Date: 2025.12.17 15:30:29 +0530 irregularity in filing a suit which can be cured even during the pendency of such suit and the plaint, therefore, cannot be rejected on such ground.
31. In the present case, the witness Shri Devendra Kumar is not a Director of Plaintiff. He has not been authorized by the Board Resolution dated 27th June, 2024 to institute the present suit. He has only been authorized to appear, represent, contest & any document including engaging any advocate, contest by signing Vakalatnama, affidavit and pleading on behalf of Plaintiff company in all the court cases (Civil and Criminal) and therefore, it is held that he had no authority under the Board Resolution to institute the present suit and therefore, the suit is not maintainable for having been instituted by a person not authorised to institute the present suit and it is held accordingly.
32. However, since Order XIV Rule 2 CPC mandates to pronounce judgment on all issues framed, all the issues framed in the present suit are being decided.
33. My issue-wise findings are given as under:-
Issue No.1: Whether the plaintiff is entitled to recovery of suit amount?
The onus to prove this Issue was placed on the Plaintiff.
34. The Defendant has not disputed the placing of Purchase Order by the Defendant upon the Plaintiff as well as the Plaintiff having supplied the material in terms of the Purchase Order described as Main Supply. The Plaintiff has not disputed to not having supplied Spare Supply. Ex. D-1, NEERA BHARIHOKE CS (COMM) No. 2967/2024 M/s V. Automat and Investment Pvt. Ltd. Vs. GMW Pvt. Ltd. Page 21 of 30 Digitally signed by NEERA BHARIHOKE Date: 2025.12.17 15:30:36 +0530 the Purchase Order does not make the payment of material supplied for Main Supply dependent upon Plaintiff supplying Spare Supply to Defendant.
35. Perusal of Ex. D-1, the Purchase Order, leaves no doubt that Plaintiff was aware of the fact that material was to be supplied by the Plaintiff to the Defendant against the TOSHIBA order on Defendant for the FOH system package.
36. The Defendant has admitted tax invoices dated 31.10.2019 raised by the Plaintiff upon the Defendant which were therefore exhibited as Ex.P-1 and Ex.P-2. Both sides admit that the Defendant made the payment of Rs.5 Lacs to the Plaintiff. During cross-examination of PW-1, PW-1 admitted having received a further amount of Rs.50,000/- from the Defendant towards these tax invoices. Therefore, the suit amount towards principal amount reduces to Rs.8,15,260/-.
37. The Defendant has submitted that out of the transmitters supplied by the Defendant to Plaintiff, five transmitters supplied by Plaintiff did not work properly on commencement and Plaintiff did not get them repaired. Plaintiff has admitted the emails placed by Defendant on record and thereafter tendered in examination in chief by DW-1 as Ex. D-1. One of these e-mails is an e-mail dated 08.09.2021 written by Defendant to Plaintiff which contains list of 7 transmitters and stating that those transmitters were fluctuating/hunting and not working properly Michael has already communicated to the Service Engineer Mr. Praveen Kumar of the plaintiff. It was also written that he suggested to Defendant to do NEERA CS (COMM) No. 2967/2024 M/s V. Automat and Investment Pvt. Ltd. Vs. GMW Pvt. Ltd. Page 22 of 30 BHARIHOKE Digitally signed by NEERA BHARIHOKE Date: 2025.12.17 15:30:43 +0530 rectification which the Defendant had done but those transmitters were not working properly. The Defendant had requested the Plaintiff to depute its Service Engineer to rectify the problem one urgent basis.
38. The Defendant has relied on the guarantee clause in Annexure-III of the Work Order which specifies that period of guarantee is 18 months from the date of supply or 12 months from the date of commissioning whichever is later. The Plaintiff has submitted that it was not supplied with Annexure-III of the work order dated 05.02.2019. However in view of plaintiff having admitted the said Work Order at the stage of admission/denial of documents, the said submission of the Plaintiff is not sustainable. The date of the supply of material was indisputably 31.10.2019, i.e. the day of raising tax invoices, Ex. P-1 and Ex. P-2, by the Plaintiff. The period of guarantee after 18 months from the date of supply had already expired on the date of the e-mail dated 08.09.2021 which mentions 7 transmitters and not 5 transmitters to be fluctuating/not working properly. The same was the reply of Plaintiff written to the Defendant about the expiry of guarantee in its e-mail dated 01.12.2021. The said e-mail is silent on aspect of guarantee period of 12 months from the date of commissioning. However, the Defendant has not placed anything on record in respect of date of commissioning of these transmitters.
39. During his cross-examination, DW-1 also stated that he did not know when the industrial goods supplied by the plaintiff were installed and commissioned. He also admitted that Defendant had not placed any NEERA CS (COMM) No. 2967/2024 M/s V. Automat and Investment Pvt. Ltd. Vs. GMW Pvt. Ltd. Page 23 of 30 BHARIHOKE Digitally signed by NEERA BHARIHOKE Date: 2025.12.17 15:30:50 +0530 documents showing the installation and commissioning dates. Therefore, the Defendant was able to prove that five transmitters supplied by Plaintiff did not work properly but could not prove that the five transmitters did not work properly on commencement. Plaintiff did not refuse to repair them but stated that the warranty/guarantee period to repair them had expired vide its e-mail dated 01.12.2021. Therefore, Defendant failed to prove that Plaintiff failed in discharging its obligations by not getting the 5 transmitters repaired. Rather in its e-mail dated 20.12.2011, the Plaintiff wrote to the Defendant that it will resolve the problems of faulty transmitters and at the same time requested the Defendant to release its balance outstanding payment which was due for two years and in response, the Defendant wrote on the same day that payment shall be released through LC with spare material. As observed earlier, the Work Order contains no stipulation for fixing the payment for main supply to be dependent upon supply of spare material by the Plaintiff to Defendant. But the Defendant kept on writing the same i.e. that payment shall be released through LC with spare material through its subsequent emails. Therefore, the Defendant did not dispute its liability to make its balance outstanding payment and rather admitted the same.
40. As regards submission of the Defendant that the transmitters were purchased at the cost and risk of the Defendant by M/s TOSHIBA and a sum of Rs.4,54,500/- had been adjusted/deducted by M/s TOSHIBA from the amount payable to Defendant, the Defendant has not placed any document on record to show that Defendant could affix the liability owed by it towards M/s TOSHIBA or could adjust the liability due under its NEERA BHARIHOKE CS (COMM) No. 2967/2024 M/s V. Automat and Investment Pvt. Ltd. Vs. GMW Pvt. Ltd. Page 24 of 30 Digitally signed by NEERA BHARIHOKE Date: 2025.12.17 15:30:55 +0530 contract with M/s TOSHIBA on the Plaintiff or that Defendant could adjust such amount in the ledger of Plaintiff maintained by Defendant or that loss caused to the Defendant on the said account was the liability of Plaintiff.
41. During his cross- examination, DW-1 admitted that no document has been placed on record by the Defendant reflecting that the Toshiba company had deducted money of the Defendant or raised any debit note to Defendant. DW-1 volunteered that there was an MoM (Minutes of Meeting) between Toshiba and Defendant wherein it was decided that Toshiba would deduct amount from the Defendant and it also contains the name of Plaintiff. However, any document executed between Defendant and M/s TOSHIBA cannot bind/affix any liability on the Plaintiff. DW-1 categorically admitted that M/s TOSHIBA had not raised any debit note to the defendant company and that is why Defendant had not placed the same on record. In view of these observations, the submission of the Defendant that a sum of Rs.4,54,500/- had been adjusted/debited in ledger of the Plaintiff way back in 1st April, 2023 is not sustainable and not permissible.
42. In his examination in chief, DW-1 stated that "Two more transmitters did not work on commissioning. Since the same were required to be repaired urgently, therefore, Defendant delivered it to the Plaintiff. Plaintiff failed to repair or deliver it to Defendant and usurped the same. In lieu of the aforesaid two transmitters, a sum of Rs.2,91,406/- was recovered by TOSHIBA and/or incurred by the Defendant which was the NEERA BHARIHOKE CS (COMM) No. 2967/2024 M/s V. Automat and Investment Pvt. Ltd. Vs. GMW Pvt. Ltd. Page 25 of 30 Digitally signed by NEERA BHARIHOKE Date: 2025.12.17 15:31:01 +0530 liability of Plaintiff. Thus, Rs.2,91,406/- had been debited in the ledger of Plaintiff."
43. The Defendant has placed on record the e-mail dated 25.09.2021 where the Defendant had written to the Plaintiff about handing over of two transmitters to Mr. Roopesh Kumar in factory of Plaintiff which had been received in factory of Plaintiff on 25.09.2021 with request to rectify the problem and send back the transmitter with service engineer of the Plaintiff for balance transmitters. The said submission of Defendant as a reason for seeking adjustment of Rs.2,91,406/- by debiting in the ledger of Plaintiff is not sustainable on account of warrant period of supply having expired and the Defendant admittedly not having placed anything on record to establish the date of commissioning of these two transmitters and the Defendant not having placed anything on record to establish as to how the said sum could be adjusted by the Defendant from the Plaintiff in absence of any privity of contract between the Plaintiff and M/s TOSHIBA.
44. In his examination in chief, DW-1 also stated that "Plaintiff failed to supply the material referred as Spare Supply to the Defendant. On the contrary Plaintiff, in breach of settled norms of the commercial transaction business, supplied the said material directly to TOSHIBA. As per the purchase order, Plaintiff was to supply five items being Spare Supply against the total cost of Rs.3,79,500/-. Plaintiff directly supplied the said material to TOSHIBA for which TOSHIBA charged/deducted from the amounts payable to the Defendant a sum of Rs.5,70,570/-.
NEERA CS (COMM) No. 2967/2024 M/s V. Automat and Investment Pvt. Ltd. Vs. GMW Pvt. Ltd. Page 26 of 30 BHARIHOKE Digitally signed by NEERA BHARIHOKE Date: 2025.12.17 15:31:07 +0530 Consequently, a sum of Rs.1,91,070/- was the loss caused on account of mal-practice adopted by the Plaintiff. Thus, a sum of Rs.1,91,070/- was adjusted/set off and debited in the ledger of the Plaintiff maintained by the Defendant in regular course of business."
45. The Defendant has not raised any counter-claim. The grievance, if any, of the Defendant in this regard could only be raised by the Defendant by filing a separate suit against the Plaintiff which the Defendant has not done. Therefore, these submissions of Defendant cannot be taken into account to determine whether Plaintiff is entitled to recovery of suit amount i.e. Rs.8,15,260/- (Rs.8,65,260/- minus Rs.50,000/- which the Plaintiff admittedly received from the Defendant but did not mention in the Ledger Account of the Defendant maintained by Plaintiff).
46. The Defendant has not disputed the amount claimed by the Plaintiff in the tax invoices Ex. P-1 and Ex. P-2. The Defendant has been unable to prove that it is entitled to deductions/adjustments of Rs.4,54,500/- or Rs.2,91,406/- or to adjust the alleged loss of Rs.1,91,070/- from the amount due to the Plaintiff in respect of supply of material of Main Supply under the Purchase Order dated 05.02.2019.
47. The payment of Rs.50,000/- was made by the Defendant to the Plaintiff on 10.04.2021. The period of limitation will commence from 01.03.2022 and would expire on 01.03.2025 in view of decision of Hon'ble Supreme Court in In Re: Cognizance for Extension of Limitation [Suo Moto Writ Petition (C) No.3 of 2020, Order dated 10 th NEERA BHARIHOKE CS (COMM) No. 2967/2024 M/s V. Automat and Investment Pvt. Ltd. Vs. GMW Pvt. Ltd. Page 27 of 30 Digitally signed by NEERA BHARIHOKE Date: 2025.12.17 15:31:14 +0530 January, 2022] and the present suit has been filed on 07.08.2024 and has therefore been filed within limitation.
48. In view of these observations, Issue No.1 is decided in favour of Plaintiff and against the Defendant and it is held that Plaintiff is entitled to recovery of Rs.8,15,260/- from the Defendant.
Issue No.2 :Whether the plaintiff is entitled to interest on the suit amount? If yes, at what rate and for which period?
The onus to prove this Issue was placed on the Plaintiff.
49. The tax invoices Ex. P-1 and Ex. P-2 stipulate that interest will be charged @ 18% per annum if the payment is not received within the stipulated time as per the purchase order. Purchase Order dated 05.02.2019 provides that 100% payment will be paid through 90 days. The material was supplied on 31.10.2019. 90 days expired on 29.01.2020. The Plaintiff is held entitled to interest @ 18% per annum on the amount of Rs.8,15,260/- from the Defendant from 29.01.2020 till realization.
Issue No.3 : Whether this court lacks territorial jurisdiction?
The onus to prove this Issue was placed on the Defendant.
50. Issue No.3 was treated as preliminary issue and after hearing detailed submission of learned Counsels for parties has already been decided in favour of Plaintiff and against the Defendant vide order dated 06.02.2025. It is held that this Court does not lack territorial jurisdiction.
NEERA BHARIHOKE CS (COMM) No. 2967/2024 M/s V. Automat and Investment Pvt. Ltd. Vs. GMW Pvt. Ltd. Page 28 of 30 Digitally signed by NEERA BHARIHOKE Date: 2025.12.17 15:31:21 +0530 Issue No.4 : Whether the defendant paid to the plaintiff a sum of Rs.50,000/- on 10.04.2021?
The onus to prove this Issue was placed on the Defendant.
51. During cross-examination of PW-1, learned Counsel for Defendant had put a suggestion to PW-1 that ledger of Defendant maintained by Plaintiff, Ex.PW-1/5, does not reflect all the payments made by Defendant to the Plaintiff and PW-1 answered that a sum of Rs.50,000/- was received from some other company of the Defendant which they have now admitted. During his cross-examination, DW-1 stated that Defendant had made part payment of Rs.5 Lakh and Rs.50,000/- to the Plaintiff. No suggestion was out to DW-1 that the payment of Rs.50,000/- was not made by the Defendant but by some other company of the Defendant. Further, the said payment is reflected in the Statement of Account of Bank of Defendant maintained with State Bank of India, Baroda Branch to have been made by the Defendant to the Plaintiff.
52. The receipt of the payment of Rs.50,000/- by the Plaintiff from the Defendant was admitted by PW-1. Therefore, Defendant has proved that the Defendant paid the Plaintiff a sum of Rs.50,000/- on 10.04.2021. Issue No.4 is therefore decided in favour of Defendant and against the Plaintiff and it is held that Defendant paid to the Plaintiff a sum of Rs.50,000/-on 10.04.2021.
53. However, since Shri Devendra Kumar has not been authorized vide Board Resolution dated 27.06.2024 to institute the present suit on behalf of the Plaintiff, the suit is not maintainable for having been instituted by a NEERA BHARIHOKE CS (COMM) No. 2967/2024 M/s V. Automat and Investment Pvt. Ltd. Vs. GMW Pvt. Ltd. Page 29 of 30 Digitally signed by NEERA BHARIHOKE Date: 2025.12.17 15:31:28 +0530 person not authorised to institute the present suit and is therefore dismissed. No order as to costs.
54. Decree sheet be prepared accordingly.
File be consigned to record room after necessary compliance.
Digitally signed
by NEERA
NEERA
Announced in the open BHARIHOKE
BHARIHOKE Date: 2025.12.17
Court on 17.12.2025 15:31:36 +0530
(Dr. Neera Bharihoke)
District Judge (Commercial Court)-06
South East, Saket Courts, New Delhi
17.12.2025
Certified that this judgment contains 30 pages and each page bears my signatures.
Digitally signed by (Dr. Neera Bharihoke) NEERA NEERA BHARIHOKE District Judge (Commercial Court)-06 South East, Saket Courts, New Delhi BHARIHOKE Date:
2025.12.17 15:31:43 +0530 17.12.2025 CS (COMM) No. 2967/2024 M/s V. Automat and Investment Pvt. Ltd. Vs. GMW Pvt. Ltd. Page 30 of 30