Delhi District Court
M/S High Spirits Exim Pvt Ltd vs M/S Jain Departmental Store on 28 August, 2025
IN THE COURT OF SH. LOKESH KUMAR SHARMA
DISTRICT JUDGE (COMMERCIAL COURTS)-05,
SOUTH DISTRICT, SAKET COURTS, NEW DELHI
CS (COMM) 711/2022
CNR No. DLST01-010817-2022
In the matter of
M/S HIGH SPIRITS EXIM PVT LTD
Through it's Manager Kailash Chand
Office At - B-19, 1st Floor, Okhla Industrial Area
Phase-I, New Delhi-110020
Email [email protected]
Mob- 8505836111 ......Plaintiff
Versus
1. M/s Jain Departmental Store
Office At: G.F. C-3, SDA Market,
Opposite IIT Gate, New Delhi-110016
Mob- 9212164946
Email- [email protected]
Also At
K-21, Hauz Khas Enclave, New Delhi
2. Mr. Kapil Garg (Partner)
M/s Jain Departmental Store.
At: K-21, Hauz Khas Enclave, New Delhi
Mob- 9212164946
Email- [email protected]
3. Mr. Romy Garg(Partner)
M/s Jain Departmental Store.
At: K-21, Hauz Khas Enclave, New Delhi
Mob- 9818143946 .........Defendants
Date of institution of Suit - 16.12.2022
Date of arguments - 21.07.2025
Date of Judgment - 28.08.2025
CS (COMM) 711/22 M/s High Spirits Exim Pvt Ltd Vs. M/s Jain Departmental Store & Ors Page No. 1 of 17
JUDGMENT
28.08.2025
1. The present suit for recovery of RS. 8,20,904/-, (Eight Lakhs Twenty Thousand Nine Hundred and Four only) along with interest @ 12 per cent per annum has been filed by the plaintiff against the defendants.
2. Brief Facts:- Plaintiff was stated to be the distributor of Liquor and had customers all over India. The present suit was filed by one Sh. Kailash Chand, Manager of the Plaintiff, who was stated to be duly authorized by the Plaintiff, vide its Board Resolution, to sign, verify and institute the present lis.
3. Defendant no. 1 was stated to be a company duly registered under the Companies Registration Act and was into the business of hospitality and running a restaurant and Defendants no. 2 and 3 were stated to be its Directors, who were actively participating in the business of Defendant no. 1, in the ordinary course of trade and at the instance of Defendants no. 2 and 3, Plaintiff had supplied different brands of Beer, liquor and wines to defendant no. 1 and had raised bills accordingly and used to maintain a running account, which reflected an outstanding amount of Rs. 8,20,904/- existing against them.
It was stated that plaintiff had deposited the statutory dues i.e. govt. taxes upon the sales made to the defendants. Pursuant to the liquor received and liabilities reflected in running account of Plaintiff, Defendants had made part payments, CS (COMM) 711/22 M/s High Spirits Exim Pvt Ltd Vs. M/s Jain Departmental Store & Ors Page No. 2 of 17 however, the remaining amount was stated to be still due along with interest and expenses.
4. It was stated that when defendants had failed to clear their outstanding dues, then on 15.01.2022 Plaintiff had issued a legal notice upon defendants, demanding payment of Rs. 8,20,904/- alongwith an interest @ 12% per annum and Rs. 5000/- as the cost of said legal notice within 15 days from the date of the receipt of legal notice, however, despite service of the said notice, defendants had neither made the payment nor replied to the said notice.
5. It was averred further that plaintiff had applied for Pre-institution Mediation with SDLSA on 19.05.2022, however, despite issuance of two notices, neither the defendants had appeared nor any intimation was received from their side for the mediation, hence non-starter report was issued by SDLSA on 02.07.2022.
6. Since both the parties were working for gain within the territorial jurisdiction of this Court and since the subject matter of the suit was "commercial" in nature as per section 2(1)
(c) of the Commercial Courts Act, 2015, hence this court was stated to have territorial jurisdiction to try and decide the present lis.
7. The cause of action was stated to have arisen firstly when invoices dated 01.04.2021 to 30.09.2021 were issued upon defendants and had again arisen when plaintiff had sent a legal CS (COMM) 711/22 M/s High Spirits Exim Pvt Ltd Vs. M/s Jain Departmental Store & Ors Page No. 3 of 17 notice dated 15.01.2022 to defendants. The cause of action was stated to be still continuing against the defendants.
8. In the light of the aforesaid facts and circumstances, the plaintiff had prayed for passing of a decree for recovery of Rs. 8,20,904/- alongwith pendente-lite and further interest @12% per annum from the date of filing of the suit till its actual realization and costs of the suit be also awarded in favour of the plaintiff and against the defendants.
9. Upon service of notice, the defendants had also appeared to contest the case of plaintiff on its merits and filed their written statements on record, wherein they had taken a preliminary objection that plaintiff was guilty of concealment of material facts as well as for not approaching the court with clean hands. No cause of action was stated to have ever arisen in favour of the plaintiff and against the defendants.
On merits, it was stated on behalf of the Defendants no. 1 and 3 that Plaintiff had wrongly mentioned that Defendant No.1 was a company duly registered under the Companies Registration Act as well as Defendant Nos. 2 and 3 were its Directors. The correct position was that Defendant No.1 was a partnership firm and no such person namely Sh. Kapil Jain was associated with it, hence making him a party to the suit was nothing but a barking up the wrong tree, as he was neither the partner nor the AR of Defendant No.1.
Defendant No.1 was stated to be in the business of CS (COMM) 711/22 M/s High Spirits Exim Pvt Ltd Vs. M/s Jain Departmental Store & Ors Page No. 4 of 17 operating an L-7 store for the retail sale of Indian and Foreign Liquor within the territory of the NCT of Delhi under the license issued by the Department of the Excise, Entertainment & Luxury Tax of the Government of National Capital Territory of Delhi. Plaintiff was stated to have approached the Defendant No.1 and had represented itself as an importer and distributor of international alcoholic beverages brands with a good reputation.
It was stated that Plaintiff had induced the Defendant No.1 to enter into business relationship and had represented that it used to provide heavy discounts/schemes to its customers in terms of issuing credit notes, which would help Defendant No. 1 to secure huge profits in the business. Relying upon the representations of Plaintiff, Defendant No.1 had entered into a business relationship with Plaintiff and had purchased alcoholic beverages from Plaintiff against which, credit notes were issued/given by Plaintiff to Defendant No.1 from time to time as per its promises and representations. Defendant No.1 used to make timely payments to Plaintiff for its purchase.
It was stated the accounts between the parties were duly settled in 2021 itself when the Government of the NCT of Delhi had revised its excise policy with regard to the sale of liquor in the territory of the NCT of Delhi. Ledger maintained with respect to Defendant No. 1 was stated to be false and fabricated.
Defendant no. 2 in his written statement had admitted the business transactions between Plaintiff and CS (COMM) 711/22 M/s High Spirits Exim Pvt Ltd Vs. M/s Jain Departmental Store & Ors Page No. 5 of 17 Defendants, however, he had no direct involvement in the transactions. It was stated that there was no privity of contract between Plaintiff and Defendant No. 2. Defendant no. 2 was stated to have been impleaded as party on the ground that he was the partner of the Defendant no. 1, but he had never held such position, however, he had only participated in the business operations of Defendant no. 1 without any official capacity.
Apart from this, except for the paras which were either specifically admitted or essentially or purely constituted a matter of record, rest others were denied by all the Defendants as wrong and incorrect.
10. To the written statements of the defendants, plaintiff had also filed its replication, wherein the preliminary objections taken by the defendants were denied by it and the contents of plaint were reiterated on merits.
11. On the pleadings of the parties, this court vide order dated 13.08.2024, had framed following issues for determination:
(i) Whether the Plaintiff is entitled to recovery of suit amount, as prayed ? OPP.
(ii) Whether the Plaintiff is entitled to claim the interest on suit amount, if so, at what rate? OPP
(iii) Whether the Plaintiff is guilty of suppression and concealment of material facts? OPD
(iv) Whether the suit is bad for mis-joinder of necessary and proper parties ? OPD.
(v) Relief CS (COMM) 711/22 M/s High Spirits Exim Pvt Ltd Vs. M/s Jain Departmental Store & Ors Page No. 6 of 17
12. In order to prove its case by preponderance of probabilities, the Plaintiff had examined its Manager Sh. Kailash Chand S/o Sh. Mohan Singh aged about 42 years, R/o House No. 71, Durga Park, Dallupura, Delhi-110096 having his office at D- 19/6, First Floor, Okhla Industrial Area Phase-II, New Delhi- 110020, who had placed on record, affidavit Ex. PW1/A in his examination-in-chief, wherein besides reiterating the contents of plaint on solemn affirmation, he had also placed on record the following documents:-
1.Ex. PW1/1- Copy of Board Resolution dated 15.04.2022, passed in his favour by Plaintiff.
2.Ex. PW1/2- Copies of Account Statement w.e.f. 01.04.2021 to 31.03.2022.
3. Ex. PW1/3 (Colly)- Invoices/bills issued by Plaintiff upon defendant.
4.Ex. PW1/4 - Copy of form no. 27 D/receipts and its confirmations.
5. Ex. PW1/5 and Ex. PW1/6- Copy of legal notice dated 15.01.2022 and original postal receipts. (colly).
6. Ex. PW-1/7 - Copy of non-starter report dated 02.07.2022.
During his cross-examination conducted by Ld. Counsel for the defendants, PW1 had stated that he was working with the plaintiff company for last about 20 years and the transaction involved in the present case had taken place in his presence. PW1 had come to know about defendants no. 2 and 3 being partners of defendant no. 1 from the Plaintiff's salesman, CS (COMM) 711/22 M/s High Spirits Exim Pvt Ltd Vs. M/s Jain Departmental Store & Ors Page No. 7 of 17 who used to visit the store of defendant no. 1, however, he himself had never met them personally. The plaintiff was doing business with defendants either since 2018-2019 or 2019-2020 and ledger account of defendants since 2020-2021 was on record. Ex. PW1/2 was stated to be pertaining to year 2021-22 and the 'credit note' as appearing in it reflected the discount given by the Plaintiff to defendants on purchase of wine bottles, as per the mutual settlement arrived between defendants and salesmen of Plaintiff. PW1 had admitted that the said discount was not fixed and varied each time and Plaintiff used to issue documents in respect of credit notes. However, he could not tell the number of credit notes issued in the favour of defendants. Last transaction between the parties was stated to have taken place in September 2021 and he could have also produced the audited balance sheet for the financial year 2021-22.
PW1 had denied the suggestion that the plaintiff had not properly adjusted all the credit notes issued in favour of defendants. He had also denied the suggestion that Kapil Garg was not the partner with the defendant's firm or that defendants no. 2 and 3 were wrongly made the parties.
Other formal suggestions were also denied by him as wrong and incorrect.
13. Thereafter Plaintiff's evidence was closed.
14. In rebuttal defendant no. 1 had examined its partner, who is also the defendant no. 3 in the present case, Sh. Romi CS (COMM) 711/22 M/s High Spirits Exim Pvt Ltd Vs. M/s Jain Departmental Store & Ors Page No. 8 of 17 Garg, S/o Sh. T.R Garg aged about 46 yrs, R/o W-5/16, Sainik Farm, New Delhi, having its office at E-257, Basement, Greater Kailash, Part-II, New Delhi-110048, who had filed in evidence, his examination-in-chief by way of affidavit Ex. DW1/A reiterating the contents of written statement on solemn affirmation. Besides this, he had also placed on record the following documents:-
i. Ex. DW1/1- Copy of Authority letter dated 24.07.2023, issued in his favour by the other partner/authorized signatory namely Ms. Madhu Garg.
ii. Ex. DW1/2- Copy of the ledger account maintained by Defendant no. 1, in respect of Plaintiff.
iii. Ex. DW1/3- Certificate u/s 63 of the Bharatiya Sakshay Adhiniyam, 2023, r/w Section 65B of Indian Evidence Act.
iv. Ex. DW1/4- Written statement. (However, during exhibition of the Documents, he had not exhibited the same).
During his cross-examination conducted by Ld. Counsel for Plaintiff, DW1 had stated that he and Ms. Madhu Garg were the partners in the defendant no. 1 firm, however, he could not tell as to whether it was registered or not. They used to order wine from the portal of Excise Department and delivery was made directly to the party by Excise Department.
CS (COMM) 711/22 M/s High Spirits Exim Pvt Ltd Vs. M/s Jain Departmental Store & Ors Page No. 9 of 17 He had admitted that wine was supplied by the Plaintiff upon placing orders through portal of Excise Department or that he had received the delivery as per invoices Ex. PW1/3. As per Defendant's accounts, they did not owe even a single penny to the Plaintiff, however, he had volunteered that Plaintiff would have to pay them around Rs. 50,000/-. He had also admitted that all the payments were made to the Plaintiff through Bank transfers. Since, the Plaintiff had not given them the due credit against discount schemes and credit notes and thus there was a difference appearing in their respective ledger accounts. However, he had no document in his possession with respect to the discounts offered to them by the plaintiff.
Formal suggestions were denied by him as wrong and incorrect.
15. Defendant no. 2 himself had appeared in the witness box and had filed in evidence, his examination-in-chief by way of affidavit Ex. DW2/A reiterating the contents of written statement on solemn affirmation.
During his cross-examination conducted by Ld. Counsel for Plaintiff, DW2 had stated that he was not associated with defendant no. 1 as the same was owned by his brother Romi Garg and he only used to assist him in Accounting work. DW2 had admitted that they used to place order for liquor and wine through portal of Excise Department, which itself had forwarded the order to the Plaintiff for the supply of material. He had further stated that he did not know whether Plaintiff used to deliver the CS (COMM) 711/22 M/s High Spirits Exim Pvt Ltd Vs. M/s Jain Departmental Store & Ors Page No. 10 of 17 liquor along with permit or not. They were offered discounts on all the bills/invoices forming part of Ex. PW1/3 (colly) from page no. 16 to 26 by the Plaintiff and the discount was not only restricted to percentage but it also included extra cases of liquor plus percentage both. He had admitted that the delivery was always made by Plaintiff as per the Defendant's order.
He had denied the suggestion that defendant was liable to pay the outstanding legal liability to the Plaintiff. He had also denied the suggestion that there was no scheme or discount which was promised by the Plaintiff to the defendant but not given. He had denied the suggestion that he was working as partner with the defendant no. 1 or that he had personally dealt with the Plaintiff in respect of each and every transaction. He had also denied the suggestion that he had promised to clear the outstanding liability towards defendant no. 1. He had denied the suggestion that he was deposing deposing falsely.
16. I have heard Sh. Naveen Kumar Tripathi, Ld. Counsel for the plaintiff and examined the documents, placed and exhibited on record by both the parties.
It was submitted by Sh. Naveen Kumar Tripathi, Ld. Counsel for the plaintiff that in view of the documents as well as the testimony of PW1, the Plaintiff has been successfully able to prove its case of entitlement of recovery of money against the defendants and thus is entitled to a decree being passed in its favour, whereas in rebuttal, it was submitted by Ld. Proxy Counsel for the Defendant that Plaintiff had miserably failed to CS (COMM) 711/22 M/s High Spirits Exim Pvt Ltd Vs. M/s Jain Departmental Store & Ors Page No. 11 of 17 honour its commitment and undertaking of providing credit notes and discounts to the defendants towards purchase of liquor as promised by it and the accounts between the parties were duly settled before induction of new Excise Policy by the Government of NCT of Delhi in 2021, hence, nothing remained to be paid any further on behalf of the Defendants.
17. In the light of aforesaid rival submissions and contentions of both the Ld. Counsels, my issue wise findings are as under:-
Issue no. 1. Whether the Plaintiff is entitled to recovery of suit amount, as prayed ? OPP.
The onus to prove this issue was upon the Plaintiff. It is interesting to see that Plaintiff had nowhere denied about its having offered the discounts and credits to the defendants against purchase of liquor and the same is also reflected in its statement of account filed on record Ex. PW1/2 as well, which shows issuance of several credit notes by it on different dates in favour of the defendants.
Even the Defendants in their statement of account Ex. DW1/2 filed along with their affidavit Ex. DW1/A have also talked about some adjustments, however, same has not been shown as discounts or credit notes, rather seem to have been shown as Journal.
Be that as it may, so far as the plaintiff's claim is concerned, Plaintiff's statement of account clearly shows that CS (COMM) 711/22 M/s High Spirits Exim Pvt Ltd Vs. M/s Jain Departmental Store & Ors Page No. 12 of 17 even after adjusting all the credit notes, there was a liability existing towards the defendants no. 1 and 3 to the extent of recovery of suit amount, whereas though it was merely claimed by defendants no. 1 and 3 that the Plaintiff had miserably failed to honour its promise and representations of extending them the due credits and discounts, however it has not been proved on record by them as to which of the credit notes or discounts as promised or represented were not honoured by the Plaintiff herein.
DW1 during his cross-examination had categorically admitted that all the orders of supply of liquor were placed by them on the portal of Excise Department directly and every time supplies were made to them by the Plaintiff only. Rather it was also volunteered by him that as per his estimation, the defendants had owe about an amount of Rs. 50,000/- to the Plaintiff.
It was claimed further that though they had made all the payments through bank transfers only, however, the defendants had failed to send any reply to the Plaintiff's legal notice citing the breach of any promise on its part to provide them the due credit against credit notes and discounts as allegedly promised and which was also taken as a sole defence by them in the present suit.
Had it been the case of non-adjustment of credit notes or the discounts as were offered by the Plaintiff but not actually given to the defendants, then the defendants statement of CS (COMM) 711/22 M/s High Spirits Exim Pvt Ltd Vs. M/s Jain Departmental Store & Ors Page No. 13 of 17 account would not have shown an equal balance in the debit- credit entries, rather the defendants should have sued the Plaintiff for recovery of those amounts either by way of an independent suit or by way of a counter-claim filed in the present suit itself, which admittedly had not been done. Hence, it appears to be a sham plea taken by the defendants to somehow avoid their liability.
So far as the plea regarding the defendant being an unregistered firm and thus entitled to protection u/s 69(2) of the India Partnership Act as was raised by Ld. Proxy Counsel for Defendant during his oral submissions is concerned, perusal of the record reveals that Plaintiff had duly filled form 27-D in respect of tax deducted and deposited by it qua the defendants herein, which shows that even the defendant no. 1 was also having its PAN number and PAN number could not have been applied by the defendant or issued to it without getting itself registered, hence, though defendants had deliberately not placed on record their registration certificate in the form of Form-A under Partnership Act, however, allotment of PAN number in their favour raises a presumption in favour of their registration. Both the witnesses examined by Defendants i.e. DW1 and DW2 had not challenged the authenticity and genuineness of the invoices Ex. PW1/3 raised by the Plaintiff upon them towards supply of liquor. Rather DW2 had admitted about having received the liquor as per the quantity mentioned in those invoices. A bare perusal of the said invoices clearly goes to establish that no discounts or any kind of credit notes were ever mentioned in those invoices, which only talked about the actual CS (COMM) 711/22 M/s High Spirits Exim Pvt Ltd Vs. M/s Jain Departmental Store & Ors Page No. 14 of 17 liability of the defendants to pay the amount against the quantity of liquor supplied to them by the Plaintiff.
In view of this discussion as well as appreciation of evidence as appearing on record, I have no hesitation in holding that the Plaintiff has successfully proved its entitlement to recover the suit amount against the supply of liquor against Defendant no. 1 an 3 only. However, since no registration of partnership firm or details of partners has been produced by Plaintiff in respect of Defendant no. 2 Kapil Garg, who was stated to be merely assisting his brother Romy Garg in the accounting of business and even the authorization in favour of DW1 was executed by Ms. Madhu Garg, who, as per DW1, as deposed during his cross-examination was the other partner with him in the said firm, hence, Plaintiff has miserably failed to prove its liability against defendant no. 2 herein. Thus issue is accordingly answered in affirmative and decided in favour of the Plaintiff and against the defendant no. 1 and 3 and not against the defendant no. 2, holding the Plaintiff to be entitled to recover the suit amount from the aforesaid defendants no. 1 and 3 only.
Issue no. 2. Whether the Plaintiff is entitled to claim the interest on suit amount, if so, at what rate? OPP Onus to prove this issue was again upon the plaintiff and in view of my aforesaid findings given to issue no. 1 above, this issue is also answered in affirmative and decided in favour of the plaintiff and against the defendants no. 1 and 3, it is hereby held that plaintiff shall be entitled to interest at the rate of 8% CS (COMM) 711/22 M/s High Spirits Exim Pvt Ltd Vs. M/s Jain Departmental Store & Ors Page No. 15 of 17 cent per annum on the said amount as against 12% per annum as claimed by it which admittedly appears to be on a much higher side, if compared with the rates of interests as offered by the nationalized banks on FDRs. This interest shall be pendent elite and future payable from the date of the institution of the present suit till its actual realization.
Issue No. 3.Whether the Plaintiff is guilty of suppression and concealment of material facts? OPD The onus to prove this issue was upon the Defendant, however, it has not been proved on record as to how and in what manner the Plaintiff was guilty of suppression and concealment of any of the material facts and what would have been the repercussions of such suppression and concealment on the merits of this case, thus defendant had failed to discharge the onus of this issue, which is accordingly answered in negative and decided in favour of the Plaintiff and against the Defendant.
Issue No. 4. Whether the suit is bad for mis-joinder of necessary and proper parties ? OPD.
The onus to prove this issue was again upon the Defendants. Although this plea was taken by the defendant in its written statement, however, initially Plaintiff had sued one Sh. Kapil Jain as Director of the Defendant company but later on, it was changed to Sh. Kapil Garg and cited him as a partner. Though as per Plaintiff, Sh. Kapil Garg, Defendant no. 2 was also one of the partners of the defendant's firm, however, it had not lead any evidence to substantiate its claim regarding defendant no. 2.
CS (COMM) 711/22 M/s High Spirits Exim Pvt Ltd Vs. M/s Jain Departmental Store & Ors Page No. 16 of 17 His impleadment was stated to be based upon the knowledge derived by the Plaintiff from one of its employees, who used to supply the liquor at the departmental store of defendants. Furthermore, defendant no. 2 himself had admitted about having participated in day to day business activity of defendant no. 1 firm, related to its accounts, which fact was sufficient enough to lead anyone to believe about his active role and designation as partner in Defendant no. 1, hence, it could not held by any stretch of imagination that the suit filed by the Plaintiff was bad for mis-joinder of necessary and proper parties. Moreover, no such evidence was also adduced by the Defendants on this issue, which is accordingly answered in negative and decided in favour of the Plaintiff and against the Defendants.
(v) Relief
18. In view of my findings given to all the issues above, a decree for an amount of Rs.8,20,904/-/- is passed jointly and severally against the defendants no. 1 and 3 with costs along with 8% per annum interest on the decreetal amount from the date of institution of the suit till its actual realization. Decree sheet be drawn accordingly.
19. File be consigned to record room after completion of all necessary formalities in this regard.
ANNOUNCED IN THE OPEN COURT
DATED: 28.08.2025 Digitally signed
LOKESH by LOKESH KUMAR
KUMAR SHARMA
SHARMA Date: 2025.08.28
17:13:12 +0530
(Lokesh Kumar Sharma)
District Judge (Commercial Court)-05
South/Saket/New Delhi
CS (COMM) 711/22 M/s High Spirits Exim Pvt Ltd Vs. M/s Jain Departmental Store & Ors Page No. 17 of 17