Delhi District Court
Gnv Metal Industries Pvt. Ltd vs Sar Polycap on 7 June, 2024
IN THE COURT OF Ms. NEELAM SINGH
DISTRICT JUDGE (COMM-02),
SOUTH-EAST DISTRICT, SAKET COURT, NEW DELHI
CS (COMM) 702/2022
GNV Metal Industries Pvt Ltd.
Through its Director
Mr. Vijay Bharti
Office at: B-2/701,
Satyam Apartment,
Vasundhara Enclave,
Delhi-96. ..... Plaintiff
Vs.
SAR Polycap
Through its Proprietor
Anil Jha,
Address No.1
C-27/2, Jaitpur Extension-I, Badarpur,
New Delhi-110044
Address No.2
Gali no.2, Jeevan Nagar, Wazirpur Road,
Near FNG Road, Old Faridabad, Haryana,
Old Faridabad, Haryana-121002 ..... Defendant
Date of Institution: 20.07.2022
Arguments concluded on : 27.05.2024
Date of Judgment: 07.06.2024
JUDGMENT
1. Vide this judgment, I shall decide the present suit filed by GNV Metal Industries Pvt Ltd. (hereinafter referred as plaintiff) seeking relief of recovery of Rs.28,14,720/- ( Rupees Twenty Eight Lakhs Fourteen Thousand Seven Hundred and Twenty Only) on SAR Polycap and Anil Jha, proprietor of SAR Polycap (hereinafter referred as defendant).
CS (COMM) 702/2022 GNV Metal Industries Pvt Ltd. Vs. SAR Polycap Page 1 of 37The crux of facts stated in brief is noted below:
Case of the plaintiff;
(2) (a) The plaintiff is a Private Limited Company incorporated and registered under the Companies Act, 1956 having its Registered Office at Flat no. B-2/701, Satyam Apartment, Plot No. 20, Vasundhara Enclave, Delhi-110096 and having its corporate office at C-28, Sector 6, Noida, UP 201301. The plaintiff Company is engaged in the business of supply and marketing of PVC compounds.
(b) The defendant is a proprietorship concern and Mr. Anil Jha is the Proprietor of M/S SAR POLYCAP and running his business from C-27/2, Jaitpur Extension-I, Badarpur, New Delhi-
110044 as well as from Gali no.2, Jeevan Nagar, Wazirpur Road, Near FNG Road, Old Faridabad, Haryana-121002.
(c) The defendant used to place orders for supply of PVC Compound as sold and marketed by plaintiff from time to time orally as well as in writing. The plaintiff has supplied the required goods to the defendant on various occasions as per the orders of the defendant. It is pertinent to mention that goods have been received by the defendant to his entire satisfaction and no objection or complaint was raised by defendant with respect to quality of the goods supplied. Considering continuous business relationship, plaintiff has supplied goods on credit basis against the invoices raised by plaintiff.
CS (COMM) 702/2022 GNV Metal Industries Pvt Ltd. Vs. SAR Polycap Page 2 of 37(d) The plaintiff is maintaining a regular running account in the name of defendant in their book of accounts. As per the statement of account/Ledger account maintained by the plaintiff, a sum of Rs.14,00,759/- (Rs Fourteen Lacs Seven hundred Fifty Nine Only) is due and payable by the defendant to the plaintiff as a principal amount. It is the case of the plaintiff that the defendant was irregular in making payments to the plaintiff, however, the plaintiff continued to supply the goods to maintain business relationship. But the defendant did not mend his attitude towards the payment to the plaintiff. Therefore the defendant is also liable to pay interest on account of delay in making payment of invoice amount. As per terms and conditions as mentioned on the invoices as raised by the plaintiff, the defendant is liable to pay bill amount within 30 days of the date of billing otherwise interest @ 24% per annum is liable to be paid by him. Hence, the defendant is liable to pay interest of Rs.14,13,961/- to the plaintiff on the principal amount of RS.14,00,759/-. Accordingly, the defendant liable to pay a total sum of Rs 28,14,720/- (Rupees Twenty eight Lakhs Fourteen Thousand Seven Hundred Twenty Only) to the plaintiff.
(e) The plaintiff approached the defendant several times and requested to make payment. But the defendant despite receiving the goods was intentionally delaying the payment of the plaintiff. The plaintiff has sent a mail dated 14.01.2017 to the defendant informing and requesting for payment of Rs.12,26,585/-. The plaintiff and defendant personally met each other and arrived at the settlement on 18.11.2017 wherein defendant acknowledged CS (COMM) 702/2022 GNV Metal Industries Pvt Ltd. Vs. SAR Polycap Page 3 of 37 the amount due towards plaintiff at that time which was about Rs. 17,91,410/-. Defendant also agreed to pay 1% interest monthly after the bill date but he again failed to abide by the terms agreed by him on 18.11.2017. The plaintiff and defendant again met each other and arrived at a settlement on 11.09.2018 wherein defendant acknowledged the amount due towards plaintiff at that time which was about Rs.15,30,879/- and defendant agreed to pay.
(f) After lots of persuasions, defendant towards the discharge of his part legal debt and liability signed and issued following cheques:-
a. Cheque of Rs.5,00,000/- (Rs Five lacs) bearing no. 000064 drawn on Punjab & Sind Bank, Ajronda Branch, Faridabad, dated 01.07.2019.
b. Cheque of Rs.5,00,000/- (Rs Five lacs) bearing no. 000063 drawn on Punjab & Sind Bank, Ajronda Branch, Faridabad, dated 07.07.2019.
The aforesaid cheques when deposited by plaintiff in his Bank Account maintained with HDFC Bank, 329, Vasundhara, New Delhi for encashment, the same were returned unpaid by the Bank of the defendant with the remark "Account Closed" along with the cheque return memo dated 10.07.2019. ( It is submitted that the plaintiff has instituted a Criminal Complaint case under Section 138 of NI Act against the dishonour of cheques which is pending in Karkardooma Court.) CS (COMM) 702/2022 GNV Metal Industries Pvt Ltd. Vs. SAR Polycap Page 4 of 37
(g) The defendant despite receiving the legal notice did not reply to the same nor paid the claim amount and hence, the present suit.
Case of the defendant;
(3) (a) Written Statement has been filed by the defendant wherein the defendant has stated the present suit filed by the plaintiff is not maintainable as the defendant has discharged all his liability towards the plaintiff and having no liability as alleged by the plaintiff in his plaint. The plaintiff's suit is not maintainable since the plaintiff has suppressed the material facts from this Court and the facts mentioned in the plaint are false and frivolous and contradictory. The plaintiff has not approached this court with clean hands and has suppressed the true and material facts from this court thereby the plaintiff is guilty of Suppressio Veri or Suggestio Falsi.
(b) There is no cause of action for filing this present suit is available to the plaintiff nor valid cause of action have been disclosed in the plaint. Moreover defendant has discharge his entire liability on 16.01.2019. It is further submitted that the present suit is barred by the law of limitation as the goods have been lastly supplied by the plaintiff through invoice no-090 dated 28.05.2018 and submission of the plaintiff that the settlement has been arrived at between the parties on 18.11.2017 and 11.09.2018 is highly controversial. It is further submitted that CS (COMM) 702/2022 GNV Metal Industries Pvt Ltd. Vs. SAR Polycap Page 5 of 37 even if plaintiff go by the date of 11.09.2018, still the suit is barred by law of limitation and same shall be rejected outrightly.
(c) The present suit filed by the plaintiff is not maintainable as this Court has no territorial jurisdiction to try and entertain the present suit as per provisions of section 20 of Civil Procedure Code. It is further submitted that the meeting between the plaintiff and defendant were held at plaintiff's office at K- 142, Site V UPSIDC Industries Area Surajpur G.Noida, UP and Defendant's office at Faribadad, Haryana. Moreover, plaintiff has supplied the material from his Noida Office and the invoices also raised from that office. It is further submitted that payments were made in the bank account of the plaintiff and bank account of plaintiff was situated in Noida and Aanand Vihar Delhi and accordingly this Court has no territorial jurisdiction to try and entertain the present suit. It is further submitted that plaintiff had supplied the material through tax invoice for a total sum amounting to Rs.31,59,979/- (Rupees Thirty one Lac, Fifty Nine Thousand, Nine Hundred and Seventy Nine Only) and Defendant has paid Rs. 33,02,321/- (Rupees Thirty Three Lac, Two Thousand Three Hundred and Twenty One Only) through NEFT/RTGS and cash till 16.01.2019. Further the defendant has supplied PVC sleeves to Plaintiff of Rs.2,27,808/- against invoice no.- 176, 177 dated 16.02.2018 and again on 28.05.2018 against invoice no-283 & 285, but the said amount has not been paid by the plaintiff till date.
CS (COMM) 702/2022 GNV Metal Industries Pvt Ltd. Vs. SAR Polycap Page 6 of 37Replication and Issues;
4. Replication has been filed on behalf of plaintiff reiterating the facts of its own case and denying the allegations made by the defendant in the Written Statement. On completion of the pleadings, following issues came to be framed on 24.02.2023 as under:
1. Whether the suit of the plaintiff is not maintainable in its present form? OPD
2. Whether the defendant has discharged his liability towards the plaintiff? OPD
3. Whether the plaintiff is guilty of suppressio veri or suggestio falsi? OPD
4. Whether there is no cause of action in the present suit? OPD
5. Whether the suit of the plaintiff is barred by the law of limitation? OPD
6. Whether the plaintiff is not maintainable as it exist in view of the specific bar under the provisions of Section 20 of the CPC? OPD
7. Whether the plaintiff is entitled for a decree of Rs.
28,14,720/- (Rupees Twenty Eight Lakhs Forty Thousand Seven Hundred only)? OPP
8. Whether the plaintiff is entitled for any interest on the decretal amount pendente lite and in future, if yes, then at what rate? OPP CS (COMM) 702/2022 GNV Metal Industries Pvt Ltd. Vs. SAR Polycap Page 7 of 37
9. Whether the plaintiff is also entitled to cost of the suit? OPP
10. Relief.
Evidence;
5.(a) The matter then was kept for plaintiff's evidence. PW-1 Sh. Vijay Bharti has tendered his evidence by way of affidavit Ex. PW1/A. He also relied upon the following documents:
1. Certified true copy of the Board Resolution dated 20.05.2022 in my favour is Ex. PW1/1.
2 Certificate of incorporation issued by Registrar of Companies, Delhi alongwith form 32 having details of the director is Ex. PW1/2.
3. Print-out of e-mail dated 12.11.2016 issued to plaintiff company is Ex. PW1/3.
4. Details of written purchase order is Ex. PW1/4 to Ex. PW1/9.
5. Invoiced raised by the plaintiff are Ex. PW1/10 to Ex. PW1/65.
6. Certified copy of the statement of account/ ledger account is Ex. PW1/66.
7. Print-out of e-mail dated 14.01.2017 issued to plaintiff company is Ex. PW1/67.
8. Agreement dated 18.11.2017 is Ex.
PW1/68. (Subject production of original CS (COMM) 702/2022 GNV Metal Industries Pvt Ltd. Vs. SAR Polycap Page 8 of 37 document on the next date of hearing as the documents otherwise have been admitted).
9. Agreement dated 11.09.2018 is Ex.
PW1/69.
10. Copies of cheques dated 01.07.2019 and 07.07.2019 are Ex. PW1/70 to Ex. PW1/71.
11. Copy of cheque return memos are Ex.
PW1/72 and Ex. PW1/73.
12. Copy of legal demand notice dated 22.02.2022 alongwith original postal receipts, tracking report and returned envelope are Ex. PW1/74 to Ex. PW1/78.
13. NSR dated 05.05.2022 is Ex. PW1/79.
14. Certificate u/s 65-B of IEA is Ex.
PW1/80.
(b) The witness was cross-examined at length by Ld. Counsel for the defendant. During his cross-examination by Ld. Counsel for defendant, PW-1 has stated that he, his wife namely Ms. Girish and his son Sh. Nishant Bharti are the directors of the plaintiff company. He stated that Plaintiff company is currently running and doing business of electrical wire and cables. He stated that Defendant was known to him for the last 25 years before starting business with him. He stated that he personally started doing business with the defendant from 25.04.2015 onwards. He stated that he used to supply PVC compound (raw material) to the defendant and also used to purchase from the defendant PVC sleeves (finished goods). He stated that due to the better relations CS (COMM) 702/2022 GNV Metal Industries Pvt Ltd. Vs. SAR Polycap Page 9 of 37 with the defendant, sometimes he used to issue purchase orders and sometimes not. He stated that defendant used to make payment by way of cheques and online transfer. He stated that he used to supply the material to the defendant through tax invoice only. He stated that he used to receive payment from the defendant in company bank account maintained with HDFC Bank, Vasundhara Enclave and Yes Bank, Dariya Ganj and he has not received any amount pertaining to the business transaction from the defendant in his personal account. He stated that his wife Ms. Girish Bharti has also not received any payment from defendant in her personal account for any business transaction with the defendant. He voluntarily stated that once defendant has taken a loan for the car repair from his wife and he has paid that amount in her account.
(c) He further stated that no one by the name of J.P. Tiwari ever worked with them. He stated that there was no driver with him by the name of Amresh and he used to drive himself. He stated that Mr. Uday Bhan was never an accountant in his company. He stated that Mr. Ram Dayal was also not an employee with him. He stated that Defendant has also made certain payments for the business transactions. He admitted that he has never paid the defendant for the finished goods purchased from him as he used to get the bills adjusted for supply of raw material to the defendant. He stated that he does not remember the actual amount of material supplied to the defendant. He stated that lastly, he has supplied material to the defendant in the year 2017 or 2018. He stated that it is not in his knowledge that defendant had CS (COMM) 702/2022 GNV Metal Industries Pvt Ltd. Vs. SAR Polycap Page 10 of 37 suffered because of any defects in the goods provided by him. He stated that it is not in his knowledge that the goods supplied by the defendants (receive from them) to his customers were rejected/ returned by the customers. He denied the suggestion that he has received finished goods from the defendant to verify/ check the quality of the finished goods/ PVC Sleeves. He voluntarily stated that he has been buying the same regularly without any quality issue. He stated that he also used to receive the goods from the defendant against tax invoice. He stated that he has not placed on record any tax invoice issued by the defendant to him. He voluntarily stated that he has placed on record the account statement reflecting the bills raised by the defendant.
(d) Thereafter one question was put to the witness to which he answered as follows:
"Ques. Defendant has handed over undated three cheques bearing no. 000063, 000064 and 000065 of Punjab and Sindh Bank on 20.03.2017 for security purpose. Is it correct? Ans. It is incorrect. Defendant has issued these three cheques for the balance of payment towards defendant. I have only presented two cheques bearing no. 000063 and 000064 which have been returned without credit to me and thereafter, on the request of the defendant, I did not present the third cheque. I have also filed criminal complaint u/s 138 NI Act for the two abovementioned dishonored cheques".
(e) He further admitted that Ex.PW1/66 is not verified by CA. He admitted that the document Ex. PW1/68 and Ex. PW1/69 is in CS (COMM) 702/2022 GNV Metal Industries Pvt Ltd. Vs. SAR Polycap Page 11 of 37 his handwriting and is on plain paper and not on plaintiff company's letterhead. He stated that he has pleaded in his plaint about the money transaction to be recovered from defendant and also about the money received from the defendant. He denied the suggestion that defendant is not liable to pay any payment to him and he has filed a false case against him. He denied the suggestion that cheques issued by defendant were towards security. He denied the suggestion that he has not mentioned the fact that he used to receive finished goods from the defendant. He denied the suggestion that he has obtained signature of the defendant on plain paper and fabricated the documents Ex. PW1/68 and Ex. PW1/69. He stated that he has not placed on record plaintiff's company bank account statement. He stated that the contents of Ex. PW1/3 to Ex. PW1/9 are matter of record. Thereafter, plaintiff's evidence was closed.
6.(a) The matter then was kept for defence evidence. DW-1 Sh. Anil Kumar Jha has tendered his evidence by way of affidavit Ex. DW1/A. He also relied upon following documents:
1. Copy of the mail dated 23.04.2022 sent to the Medation Center, Saket is Ex. DWI/1.
2. Statement of account of defendant bank account no. 01211600003859 and account no. 01211600000136 are Ex. DW1/2 and Ex. DW1/3.
3. Cash receipt dated 24.01.2016 and 28.05.2018 are de- exhibited as Ex. DW1/4 CS (COMM) 702/2022 GNV Metal Industries Pvt Ltd. Vs. SAR Polycap Page 12 of 37 and Ex. DW1/5 and marked as Mark-A/1 and Mark-A/2.
4. Copy of the invoice no. 176, 177 dated 16.02.2018 and again. on 28.05.2018 vide invoice no. 283 and 285 are Ex. DW1/6 to Ex. DW1/9 (All OSR).
5. Certificate u/s 65-B of the Indian Evidence Act is Ex. DW1/10.
(b) During cross examination, DW-1 has stated that he has filed the affidavit after going through the contents of the same. He stated that he has not filed any document pertaining to the SAR Polycap. He stated that he is dealing in the business of wiring, harness for automobiles since last ten years. He stated that he do file the GST return continuously since 2017 but he has not filed GST of the years 2020-21 and 2021-22 as his GST account was blocked due to technical reasons. He stated that his proprietorship is not registered with the ESI. He stated that his present email ID is [email protected] since June, 2023. he voluntarily stated that prior to that he is not aware about the email ID as the same was of his consultant. He denied the suggestion that he is intentionally hiding the email ID prior to June, 2023. He stated that he is in contact with the plaintiff company for the last 15 years when he was doing marketing job. He stated that he has started doing business with the plaintiff company since 2015 or 2017 but he is not sure. He stated that he was purchasing PVC compound from the plaintiff company. He stated that he used to place order verbally to the plaintiff company for supply of the PVC compound. Thereafter, he was shown Ex.PW1/3 which is an CS (COMM) 702/2022 GNV Metal Industries Pvt Ltd. Vs. SAR Polycap Page 13 of 37 email dated 12.11.2016 at 09.02 am, written by the defendant to plaintiff having the attachment showing PO Ex.PW1/4 to Ex.PW1/9. He stated that the email ID shown in Ex.PW1/3 was used by the defendant in 2016 as well. He stated that he has neither sent email nor purchase orders ever but he used to give orders verbally. He admitted that the plaintiff used to supply goods through invoice raised by him. He stated that Ex.PW1/10 to Ex.PW1/65 are the invoices through which he has received materials from the plaintiff. He stated that he has not filed any ledger statement pertaining to the dealing made by him with the plaintiff company.
(c) He denied the suggestion that he has any liability to pay to the plaintiff company. Thereafter, he was confronted with an email dated 14.01.2017 at 17.44 pm, written by the plaintiff to the defendant asking for the payment of Rs. 12,26,585/- on the email ID [email protected]. He stated that he has not received such e-mail. Thereafter, he was confronted with Ex.PW1/68 and Ex.PW 1/69 dated 18.11.2017 and 11.09.2018 which bears signatures of the defendant at point D1 and D2 respectively. He admitted that his signatures are at both the documents at point D1 and D2. He voluntarily stated that the same has been taken by the plaintiff on the plain paper. He stated that Ex.PW1/70 and Ex.PW1/71 which are two cheques which have been issued by him to the plaintiff company towards the discharge of part liability. He voluntarily stated that he had issued three cheques duly signed by him for the security purpose to the plaintiff company in 2017.
CS (COMM) 702/2022 GNV Metal Industries Pvt Ltd. Vs. SAR Polycap Page 14 of 37(d) He stated that he has not placed any record whether he had given three cheques in 2017 or not. He stated that he has placed bank statement. He admitted that it is nowhere mentioned in the bank statement as filed by him that the said cheques have been given for the security purpose. He denied the suggestion that the said two cheques were presented by the plaintiff company on his instructions and the same were dishonoured vide dishonour memo dated 10.07.2019. He admitted that the plaintiff company issued legal notice which is Ex.PW1/74. He stated that he had replied to the legal notice through his advocate Sh. Nigam Chaudhary, however, the same is not on record. He denied the suggestion that he has not replied to this particular legal notice. He admitted that one criminal complaint under section 138 N I Act is pending against him which has been filed by the plaintiff. Thereafter, he was confronted with reply to the legal notice sent by the plaintiff at the time of filing of the case under section 138 N I Act. He admitted that this reply has been drafted by his counsel on his behalf. He stated that the document is now Ex.DW1/P1. He stated that the contents of Ex.DWI/P1 are matter of record.
(e) He further stated that when he started the business in 2015, he did not check the particulars of the plaintiff and their Directors on the Website. He stated that he did not sign any agreement with the plaintiff when he started his business with the plaintiff in 2017. He stated that he has told the plaintiff at the start of his business to maintain quality standards by him orally and not in writing. He voluntarily stated that plaintiff had not provided the goods as per the standards. He stated that he has not sent any CS (COMM) 702/2022 GNV Metal Industries Pvt Ltd. Vs. SAR Polycap Page 15 of 37 specifications regarding the goods to the plaintiff. He stated that he has tested the sample/material himself and not from any Government Specified Agency. He stated that he has received the test sample report from the third party but the same is not on the record. He denied the suggestion that he is leveling the allegations just to evade himself from making the payments of the plaintiff company. He stated that he has noticed about the wrong/inferior quality of the goods of the plaintiff in the month of June, 2015. He stated that he had his last dealing with the plaintiff in the year 2017. He admitted that after the month of June, 2015 when he pointed out to the plaintiff about inferior quality of his goods, he had again purchased goods from him on his assurance to supply better quality goods. He admitted that he has not mentioned anything in writing or by way of email to the plaintiff company. He stated that he has not placed on record any document pertaining to the loss suffered by him due to the poor quality of material. He admitted that he has not purchased PVC material from another supplier before closing the dealings with the plaintiff company. He admitted that he has mentioned names of his six customers from whom he suffered loss due to inferior material of the plaintiff but he has not placed on record any communication between these customers by him.
(f) He admitted that his account pertaining to which cheques had been issued was blocked by him on the advise of bank officials since company can only have one bank account. He stated that he has not informed the same to the plaintiff in writing, however, he has informed him over telephone. He denied CS (COMM) 702/2022 GNV Metal Industries Pvt Ltd. Vs. SAR Polycap Page 16 of 37 the suggestion that the cheques in question have been given by him towards his liability for the plaintiff. He voluntarily stated that these were given towards security. He stated that he has not made any complaint before any of the Law Enforcement Agency when plaintiff took his signature on the blank papers. He admitted that after signing on the blank paper, he was still purchasing goods from the plaintiff. He denied the suggestion that he had made any payment in cash to the employees/family members of the plaintiff. He admitted that this document Mark Al and A2 placed on record by him does not bear the signatures of any authorized employee of the plaintiff.
(g) He stated that he is also not having any seal of the company. He denied the suggestion that document Mark Al and A2 are forged and fabricated documents. He denied the suggestion that plaintiff has adjusted all the payments for which the goods have been taken by the plaintiff from the defendant and has been shown in the ledger by the plaintiff. He stated that the VAT/GST is paid on the goods supplied to the plaintiff. He admitted that he has not placed on record any certificate of VAT/GST/Ledger of these goods. He admitted that the invoices which have been exhibited having the terms and conditions also mentions interest @ 18% and 24% per annum. He admitted that all the payments made between the plaintiff and the defendant were account transaction. He denied the suggestion that he is deposing falsely. Thereafter, defendant's evidence was closed.
CS (COMM) 702/2022 GNV Metal Industries Pvt Ltd. Vs. SAR Polycap Page 17 of 377. The matter was listed for final arguments. Ld. Counsel for the plaintiff as well as Ld. Counsel for defendant made their respective submissions. Ld. Counsel for plaintiff reiterated the averments stated. However, the Ld. Counsel appearing on behalf of defendant vehemently stressed on the jurisdictional aspect. I now propose to deal with the issues in the background of the record.
Issue Wise Findings Issue No. 1 Whether the suit of the plaintiff is not maintainable in its present form? OPD
8. Ld. Counsel for defendant contends that the plaintiff's suit is not maintainable in its present form. The onus of proof lies on the defendant to establish this assertion. To determine the maintainability, it is essential to examine the grounds on which the defendant has challenged the suit's maintainability and the relevant legal principles.
9. Legal Framework: A suit's maintainability generally pertains to its compliance with procedural requirements and its conformity with the substantive law. Factors to be considered include jurisdiction, cause of action, fulfillment of statutory conditions, and adherence to procedural mandates as per the Code of Civil Procedure (CPC).
10. Ld. Counsel for defendant has not specifically enumerated the grounds in the written statement as to why the suit is allegedly CS (COMM) 702/2022 GNV Metal Industries Pvt Ltd. Vs. SAR Polycap Page 18 of 37 not maintainable. However, through cross-examination and documents presented, the defendant's arguments implicitly raise issues related to non-compliance with procedural requirements
11. Perusal of the record shows that the plaintiff has adhered to the procedural requirements mandated by the CPC. The plaint is accompanied by the necessary affidavits, supporting documents, and evidence. The plaintiff has also complied with pre-litigation procedures, including the issuance of a legal demand notice, which has been duly acknowledged by the defendant. There is no evidence to suggest any procedural lapses that would render the suit non-maintainable.
12. The defendant, through DW-1 Sh. Anil Kumar Jha, primarily contested the claims of liability and the quality of goods supplied. However, these arguments pertain more to the merits of the case rather than the maintainability of the suit. The defendant's evidence does not provide any cogent reason or legal ground to question the maintainability of the suit in its present form.
13. It has been held by Hon'ble Apex Court as well as our own Hon'ble Delhi High Court that unless there is a clear and specific procedural or jurisdictional defect, the court should not dismiss a suit at the threshold. In the present case, no such defect has been convincingly demonstrated by the defendant.
CS (COMM) 702/2022 GNV Metal Industries Pvt Ltd. Vs. SAR Polycap Page 19 of 3714. Based on the above analysis, it is evident that the defendant has failed to discharge the burden of proof to establish that the suit is not maintainable in its present form. The plaintiff has complied with all necessary legal and procedural requirements. Thus, the issue of maintainability is decided in favor of the plaintiff and against the defendant. Accordingly, issue No. 1 is decided in favor of the plaintiff. The suit is maintainable in its present form.
Issue No. 2 Whether the plaintiff is guilty of suppressio veri or suggestio falsi? OPD
15. Ld. Counsel for defendant has alleged that the plaintiff is guilty of suppressio veri (suppression of the truth) or suggestio falsi (suggestion of falsehood). The burden of proof lies on the defendant to substantiate these allegations with clear and convincing evidence.
16. Suppressio veri and suggestio falsi are doctrines under contract law that deal with the concealment of truth or the suggestion of falsehood by one party to another, leading to a misrepresentation. For these allegations to succeed, the defendant must demonstrate that the plaintiff intentionally withheld material facts or made false representations that influenced the defendant's decisions.
17. The plaintiff, through PW-1 Sh. Vijay Bharti, provided detailed evidence and documentation supporting their claims, including the Board Resolution (Ex. PW1/1), incorporation CS (COMM) 702/2022 GNV Metal Industries Pvt Ltd. Vs. SAR Polycap Page 20 of 37 certificate (Ex. PW1/2), emails (Ex. PW1/3, Ex. PW1/67), purchase orders (Ex. PW1/4 to Ex. PW1/9), invoices (Ex. PW1/10 to Ex. PW1/65), ledger account (Ex. PW1/66), and other relevant documents (Ex. PW1/68 to Ex. PW1/80). The plaintiff has maintained that all relevant facts have been disclosed and that no material facts have been concealed or misrepresented.
18. Courts have held that allegations of suppressio veri or suggestio falsi must be supported by specific and credible evidence showing intentional concealment or falsehood. Mere assertions without substantive proof are insufficient. The defendant has failed to provide clear and convincing evidence to substantiate the allegations of suppressio veri or suggestio falsi. The plaintiff has demonstrated transparency in their business dealings and has provided substantial documentary evidence supporting their claims. Accordingly, issue No. 3 is decided in favor of the plaintiff and against the defendant.
Issue No. 5 Whether the suit of the plaintiff is barred by the law of limitation? OPD
19. Ld. Counsel for defendant has contended that the plaintiff's suit is barred by the statute of limitations. However, Ld. Counsel for plaintiff argued that the suit was filed within the prescribed limitation period, particularly considering the extensions granted by Hon'ble Supreme Court due to the COVID-19 pandemic.
CS (COMM) 702/2022 GNV Metal Industries Pvt Ltd. Vs. SAR Polycap Page 21 of 3720. At the outset, it is crucial to establish the last date when the cause of action accrued in favour of the plaintiff and against the defendant. It is submitted by Ld. Counsel for the plaintiff that the cause of action lastly arose in favour of the plaintiff on 07.07.2019 when the the defendant has issued cheque to the plaintiff. However, Ld. Counsel for defendant has denied that the cheque has been issued on 07.07.2019 and submitted that the cheque was given to the plaintiff earlier and the same was undated. However, as per the own case of the defendant, he has made the last payment to the plaintiff on 16.01.2019.
21. To resolve issue of limitation, it is essential to examine the relevant provisions of the Limitation Act, 1963, and the specific circumstances and facts of this case. Under Article 18 of the Limitation Act, 1963, the limitation period for filing a suit based on a written contract is three years from the date the right to sue accrues. However, the situation is significantly affected by the orders of Hon'ble Supreme Court extending the limitation period due to the COVID-19 pandemic.
22. In March 2020, Hon'ble Supreme Court, through its suo motu writ petition, took cognizance of the difficulties faced by litigants in filing petitions, applications, suits, appeals, and other proceedings within the period of limitation due to the outbreak of the COVID-19 pandemic. Hon'ble Supreme Court, in its order dated 23.03.2020 in Suo Motu Writ Petition (C) No. 3/2020, directed the extension of the period of limitation in all proceedings before Courts/ Tribunals, including this Court, from CS (COMM) 702/2022 GNV Metal Industries Pvt Ltd. Vs. SAR Polycap Page 22 of 37 15.03.2020 until further orders. This order was subsequently extended through various orders, including the order dated 23.09.2021 in Miscellaneous Application No. 665/2021, which extended the period of limitation until 02.10.2021.
23. Considering the ongoing pandemic, Hon'ble Supreme Court, in its order dated 10.01.2022 in Miscellaneous Application No. 21/2022, further extended the limitation period from 15.03.2020 to 28.02.2022. Additionally, the Court provided that in cases where the limitation would have expired during this excluded period, all persons would have a limitation period of 90 days from 01.03.2022. If the actual balance period of limitation remaining with effect from 01.03.2022 was greater than 90 days, that longer period would apply.
24. Given these extensions, the period from 15.03.2020 to 28.02.2022 is excluded from the calculation of the limitation period for the present suit. Furthermore, the plaintiff initiated pre- institution mediation on 05.04.2022, and a non-starter report (NSR) was issued on 05.05.2022. This period (30 days) is also excluded from the limitation calculation as per the Commercial Courts Act, 2015. The present suit was e-filed on 14.07.2022. Even, if the date of 16.01.2019 as per the defendant is taken into consideration for calculating the the limitation the suit has been filed well within the limitation period. Therefore, the suit is not barred by limitation and is considered to have been filed within the prescribed time-frame.
CS (COMM) 702/2022 GNV Metal Industries Pvt Ltd. Vs. SAR Polycap Page 23 of 3725. In conclusion, after examining Hon'ble Supreme Court's orders and excluding the relevant periods as directed, it is evident that the plaintiff's suit was filed within the prescribed limitation period. Accordingly, Issue No. 5 is decided in favor of the plaintiff and against the defendant.
Issue No. 2 Whether the defendant has discharged his liability towards the plaintiff? OPD
26. To determine whether the defendant has discharged his liability towards the plaintiff, it is essential to evaluate the evidence presented by both parties. The plaintiff's case hinges on the assertion that the defendant has not cleared the outstanding amount which arises from the supply of PVC compound, substantiated by invoices (Ex.PW1/10 to Ex.PW1/65). The plaintiff's witness (PW-1) testified that despite repeated reminders and legal notices, the defendant failed to make the necessary payments.
27. The defendant, DW-1 Sh. Anil Kumar Jha, in his affidavit (Ex.DW1/A), denied any outstanding liability towards the plaintiff. However, during cross-examination, DW-1 made several admissions that undermine his defense. He acknowledged receiving goods from the plaintiff and confirmed the issuance of cheques (Ex.PW1/70 and Ex.PW1/71) to the plaintiff. While DW- 1 claimed these cheques were issued for security purposes, he failed to provide any documentary evidence to support this assertion.
CS (COMM) 702/2022 GNV Metal Industries Pvt Ltd. Vs. SAR Polycap Page 24 of 3728. Furthermore, DW-1 admitted the dishonor of these cheques and the subsequent issuance of a legal notice by the plaintiff (Ex.PW1/74). The defendant's failure to produce a reply to this legal notice on record weakens his position. Moreover, DW-1 conceded that he did not maintain any written communication or documentation concerning the alleged payment or settlement of dues with the plaintiff, which is crucial in a commercial transaction.
29. The defendant also alleged that the plaintiff supplied inferior quality goods. However, DW-1 admitted that he did not document these complaints or provide any third-party testing reports. His continued transactions with the plaintiff despite these alleged quality issues further discredit his claim.
30. The defendant's reliance on cash receipts (Mark-A/1 and Mark-A/2) to demonstrate payment is also flawed. While these receipts do bear some signatures, there is no clear identification of the signatories, and they lack the company seal or any form of authentication from the plaintiff's side. Furthermore, the receipts produced by the defendant are mere copies and not the original documents. The absence of original receipts and the lack of identifiable authorization from the plaintiff render these documents unreliable and insufficient to prove that any payments were made towards discharging the defendant's liability.
31. Given the defendant's admissions during cross- examination, the lack of supporting evidence for his claims, and CS (COMM) 702/2022 GNV Metal Industries Pvt Ltd. Vs. SAR Polycap Page 25 of 37 the consistent documentation provided by the plaintiff, it is clear that the defendant has not discharged his liability towards the plaintiff. Thus, based on the evidence and admissions on record, it is evident that the defendant has not fulfilled his obligation to settle the outstanding dues with the plaintiff. Accordingly, Issue No. 2 is decided in favor of the plaintiff and against the defendant.
Issue No. 4: Whether there is no cause of action in the present suit? OPD
32. Ld. Counsel for defendant has contended that there is no cause of action in the present suit. However, determining whether a cause of action exists is critical to the plaintiff's ability to bring forth a legitimate claim. A cause of action consists of the legal right of the plaintiff, the corresponding legal duty of the defendant, and a breach of such legal duty resulting in injury or damage to the plaintiff.
33. In the present case, the cause of action for the plaintiff arises from the non-payment of dues by the defendant for the materials supplied. The plaintiff, GNV Metal Industries Pvt Ltd., claims that the defendant, SAR Polycap, failed to fulfill their payment obligations despite the delivery of goods as per their contractual agreement.
34. The contractual relationship between the parties is evidenced by the delivery challans and invoices. The plaintiff CS (COMM) 702/2022 GNV Metal Industries Pvt Ltd. Vs. SAR Polycap Page 26 of 37 supplied the goods as per the terms of the contract, which is undisputed. Despite the receipt of goods, the defendant did not make the due payments. This failure to pay constitutes a breach of the legal duty under the contract, giving rise to the plaintiff's cause of action.
35. Further, the plaintiff made several requests and demands for payment, which were not honored by the defendant. The culmination of these demands led to a purported settlement agreement on various dates including the settlement on 11.09.2018, where the parties acknowledged the outstanding dues and the defendant's obligation to pay. This agreement reinforces the existence of a cause of action, as it explicitly recognized the defendant's liability.
36. Despite the settlement, the defendant continued to default on the payment, which perpetuated the cause of action. The plaintiff's initiation of pre-institution mediation on 05.04.2022, which did not result in a settlement, further solidifies the plaintiff's cause of action. The issuance of the Non-Settlement Report (NSR) on 05.05.2022 confirmed the failure to resolve the dispute through mediation, thereby necessitating the filing of the suit.
37. The defendant's reliance on cash receipts (Mark-A/1 and Mark-A/2) to demonstrate payment is flawed. These receipts, presented as photocopies, lack signatures from any authorized representative of the plaintiff and do not bear the company seal, CS (COMM) 702/2022 GNV Metal Industries Pvt Ltd. Vs. SAR Polycap Page 27 of 37 rendering them unreliable and inadmissible as evidence. Moreover, the defendant has not provided any substantial evidence to refute the plaintiff's claims or to demonstrate that the payments were made. The continuous non-payment despite repeated demands and the failed attempts at mediation clearly establish the plaintiff's right to seek legal remedy.
38. Considering the facts, the contractual obligations, the breach by the defendant, and the failed mediation attempts, it is evident that a valid cause of action exists in the present suit. The defendant's argument that there is no cause of action fails to acknowledge these critical elements. Therefore, Issue No. 4 is decided in favor of the plaintiff and against the defendant.
Issue No. 6. Whether the plaintiff is not maintainable as it exist in view of the specific bar under the provisions of Section 20 of the CPC? OPD
39. Ld. Counsel for defendant contends that the suit is not maintainable under the provisions of Section 20 of the Code of Civil Procedure, 1908 (CPC). Section 20 CPC stipulates that a suit shall be instituted in a court within whose local limits the defendant resides, carries on business, or personally works for gain, or where the cause of action, wholly or in part, arises.
40. In the present case, the plaintiff has filed the suit against the defendant, who has an office situated at C-27/2, Jaitpur Extension-1, Badarpur, New Delhi. This location falls well within CS (COMM) 702/2022 GNV Metal Industries Pvt Ltd. Vs. SAR Polycap Page 28 of 37 the territorial jurisdiction of this Court. The defendant has not disputed the existence of this office in their pleadings or during the trial.
41. According to Section 20(a) of the CPC, a suit can be instituted in a court within the local limits where the defendant resides or carries on business. The presence of the defendant's office at Jaitpur Extension-1, Badarpur, New Delhi, clearly establishes that the defendant carries on business within the jurisdiction of this Court. This is sufficient to satisfy the requirement of territorial jurisdiction as per the CPC.
42. Further, judicial precedents have established that the presence of a branch office within the jurisdiction is a valid ground for instituting a suit in that jurisdiction. In the case of M/S. Patel Roadways Limited, Bombay vs. Prasad Trading Company (1991) 4 SCC 270, Hon'ble Supreme Court of India held that the expression "carries on business" implies that the defendant has an established place of business and conducts business activities there. The presence of the defendant's office at Jaitpur Extension-1 meets this criterion, thereby establishing the maintainability of the suit within this Court's jurisdiction.
43. Additionally, the cause of action for the suit, which includes the breach of contract and non-payment of dues, is connected to the defendant's business activities conducted through its office at Jaitpur Extension-1. Therefore, the cause of CS (COMM) 702/2022 GNV Metal Industries Pvt Ltd. Vs. SAR Polycap Page 29 of 37 action, wholly or in part, arises within the territorial limits of this Court.
44. In light of these facts and judicial reasoning, it is evident that the suit is maintainable under Section 20 of the CPC. The defendant's office within the jurisdiction and the partial cause of action arising within the same provide ample grounds for the jurisdiction of this Court. Consequently, Issue No. 6 is decided in favor of the plaintiff and against the defendant.
Issue no. 7. Whether the plaintiff is entitled for a decree of Rs. 28,14,720/- (Rupees Twenty Eight Lakhs Forty Thousand Seven Hundred only)? OPP Issue no. 8. Whether the plaintiff is entitled for any interest on the decretal amount pendente lite and in future, if yes, then at what rate? OPP
45. Upon careful examination of the evidence presented by both parties and the applicable legal provisions, it is necessary to adjudicate Issues No. 7 and 8 concurrently as they are inherently linked.
46. The plaintiff, GNV Metal Industries Pvt Ltd, claims a total sum of Rs. 28,14,720/- which includes the principal amount due along with the interest calculated up to the date of filing the suit. As per the statement of account/ledger account submitted by the plaintiff, the principal amount due upon the defendant, SAR CS (COMM) 702/2022 GNV Metal Industries Pvt Ltd. Vs. SAR Polycap Page 30 of 37 Polycap, is Rs. 14,00,759/-. The defendant has not provided substantial evidence to contest this amount. The defendant's reliance on cash receipts (Mark-A/1 and Mark-A/2) to demonstrate payment was deemed unreliable as these receipts lack signatures from any authorized representative of the plaintiff, do not bear the company seal, and are copies rather than original documents, making them inadmissible as evidence.
47. The plaintiff has produced a series of invoices (Ex.PW1/10 to Ex.PW1/65) as evidence of the supply of PVC compound to the defendant. These invoices, duly acknowledged by the defendant, serve as prima-facie evidence of the transactions between the parties. The plaintiff's witness (PW-1), during examination, reiterated the claim and substantiated the outstanding dues with the said invoices. Furthermore, Ex.PW1/68 and Ex.PW1/69, which are documents bearing the defendant's signatures, indicate acknowledgment of liability towards the plaintiff. These documents significantly strengthen the plaintiff's case by showing that the defendant recognized the debt.
48. In his cross-examination, DW-1 Sh. Anil Kumar Jha, representing the defendant, admitted that the plaintiff supplied goods through invoices and that he received materials as per the said invoices. He also acknowledged issuing two cheques (Ex.PW1/70 and Ex.PW1/71) to the plaintiff, purportedly for security purposes. However, these cheques were dishonored due to insufficient funds, as evidenced by the dishonor memo dated 10.07.2019. The defendant's claim that these cheques were for CS (COMM) 702/2022 GNV Metal Industries Pvt Ltd. Vs. SAR Polycap Page 31 of 37 security does not negate the plaintiff's right to recover the outstanding amount.
49. The defendant attempted to dispute the quality of the goods supplied, alleging that the plaintiff provided inferior quality materials. However, DW-1 admitted during cross-examination that he had not sent any written communication or email to the plaintiff regarding the alleged defects, nor did he produce any third-party testing report to support his claim. Moreover, the defendant continued to purchase goods from the plaintiff even after purportedly discovering the quality issues, which undermines his defense.
50. Additionally, the defendant failed to produce any ledger statement or other documentary evidence to counter the plaintiff's claims or to show payments made against the invoices. The absence of such critical evidence from the defendant further tilts the balance in favor of the plaintiff.
51. The evidence overwhelmingly supports the plaintiff's claim for the recovery of the suit amount. The invoices, acknowledgments, dishonored cheques, and lack of contrary evidence from the defendant collectively establish the plaintiff's entitlement to the amount claimed.
52. Therefore, it is reasonable to conclude that the plaintiff is entitled to the principal amount of Rs. 14,00,759/- as due from the defendant.
CS (COMM) 702/2022 GNV Metal Industries Pvt Ltd. Vs. SAR Polycap Page 32 of 37Assessment of the Interest Rate;
53. The plaintiff has calculated interest at the rate of 24% per annum, which the Court finds to be exorbitant and not in line with general commercial practices. The interest rate must be fair, reasonable, and reflective of prevailing market rates. In several judgments, courts have deemed rates higher than market norms as unconscionable. For instance, in Central Bank of India v. Ravindra & Ors. [(2002) 1 SCC 367], Hon'ble Supreme Court observed that exorbitant interest rates can be moderated to align with fairness and equity.
54. Given the facts and circumstances of this case, and taking judicial notice of the prevailing interest rates for commercial transactions, an interest rate of 12% per annum is deemed appropriate. This rate is fair and reasonable and reflects the interest the plaintiff would have earned had the amount been invested elsewhere.
Calculation of Interest;
55. The plaintiff is entitled to interest at the rate of 12% per annum on the principal amount of Rs. 14,00,759/-. Pre-suit Interest has to be granted from the date the amount became due until the filing of the suit on 14.07.2022. The exact calculation period is from the due date(s) of the invoices up to 14.07.2022, which would require the due dates of each invoice for precise calculation. The last invoice raised by the plaintiff is of CS (COMM) 702/2022 GNV Metal Industries Pvt Ltd. Vs. SAR Polycap Page 33 of 37 28.05.2018 which is payble within 30 days from the date of billing. For simplicity and fairness, let's assume an average due date of 01.07.2018. Interest from 01.07.2018 to 14.07.2022 i.e. for a period 4 years and 13 days comes to be Rs.6,78,351.13/-.
Pendente Lite and Future Interest;
56. The plaintiff is also entitled to pendente lite and future interest on the principal amount at the rate of 12% per annum. This interest rate is fair and equitable, ensuring that the plaintiff is compensated for the time value of money lost due to the delay in payment. Awarding interest at 12% per annum aligns with judicial precedents and the principles of equity and justice. The Supreme Court in Syndicate Bank v. West Bengal Cement and Ors. AIR 1989 DELHI 107, held that interest rates should reflect a fair compensation for the delay in payments. The rationale for awarding pendente lite and future interest is to ensure the plaintiff is adequately compensated until the realization of the decree.
57. Therefore, based on the evidence led and the applicable legal principles, Issue No. 7 is decided in favor of the plaintiff, entitling them to a decree of Rs. 20,79,110.13 (Rupees Twenty Lakhs Seventy-Nine Thousand One Hundred Ten and Thirteen Paise only), inclusive of the principal amount and pre-suit interest. Additionally, Issue No. 8 is decided in favor of the plaintiff, entitling them to pendente lite and future interest at the rate of 12% per annum on the decretal amount from the date of CS (COMM) 702/2022 GNV Metal Industries Pvt Ltd. Vs. SAR Polycap Page 34 of 37 judgment until the date of actual realization of the decretal amount.
Issue No. 9: Whether the plaintiff is entitled to the costs of the suit? OPP
58. To determine whether the plaintiff is entitled to the costs of the suit, it is necessary to consider the general principles governing the award of costs as well as the specific circumstances of this case. Under Section 35 of the Code of Civil Procedure, 1908 (CPC), the award of costs is at the discretion of the Court, but this discretion must be exercised judiciously. Costs are typically awarded to the successful party to indemnify them for the expenses incurred in litigation. The underlying principle is that the party who has wrongfully caused the litigation should bear its costs.
59. Hon'ble Supreme Court in Vinod Seth v. Devinder Bajaj [(2010) 8 SCC 1] emphasized that the award of costs should not be merely symbolic but should actually compensate the successful party for the expenses incurred. The Court observed that costs should follow the event unless there are special reasons to depart from this rule.
60. In the present case, the plaintiff, GNV Metal Industries Pvt Ltd, has succeeded on the primary issues, including the determination of the amount due from the defendant, SAR Polycap, and the entitlement to interest. The plaintiff has CS (COMM) 702/2022 GNV Metal Industries Pvt Ltd. Vs. SAR Polycap Page 35 of 37 established its claim through credible evidence, including the statement of account and witness testimony. On the other hand, the defendant's attempts to refute the plaintiff's claims were found to be lacking in substance and reliability, particularly concerning the inadmissibility of photocopied receipts and the absence of credible evidence to prove payment.
61. Throughout the proceedings, the plaintiff has incurred significant expenses, including court fees, legal fees, and other costs associated with the litigation. The plaintiff had to seek legal recourse due to the defendant's failure to fulfill their payment obligations, which necessitated the initiation and continuation of this suit.
62. Given the plaintiff's success in establishing its claim and the principles laid down under Section 35 of the CPC, it is equitable and just to award costs to the plaintiff. The defendant's actions necessitated the litigation, and it would be unfair for the plaintiff to bear the financial burden of a suit that was justified and necessary to recover the dues.
63. In Ashok Kumar Mittal v. Ram Kumar Gupta & Anr. [(2009) 2 SCC 656], Hon'ble Supreme Court underscored that the primary purpose of awarding costs is to ensure that the successful party is not left out of pocket due to the legal expenses incurred. The Court emphasized that the award of realistic costs helps in reducing frivolous and speculative litigation.
CS (COMM) 702/2022 GNV Metal Industries Pvt Ltd. Vs. SAR Polycap Page 36 of 3764. Based on the foregoing reasons, it is clear that the plaintiff is entitled to the costs of the suit. The costs should include court fees, legal fees, and any other expenses reasonably incurred in pursuing the litigation. The award of costs is not only in line with the established legal principles but also serves the interest of justice by ensuring that the plaintiff is adequately compensated for the financial burden imposed by the defendant's failure to honor their obligations. Therefore, Issue No. 9 is decided in favor of the plaintiff.
Relief;
65. In view of the findings on the issues discussed above, the suit is decreed in favor of the plaintiff, GNV Metal Industries Pvt Ltd, and against the defendant, SAR Polycap, for the sum of Rs. 20,79,110.13/- (Rupees Twenty Lakhs Seventy-Nine Thousand One Hundred Ten and Thirteen Paise only), alongwith pendente lite and future interest at the rate of 12% per annum from the date of this judgment till the date of actual realization of decretal amount. The plaintiff is also entitled to the costs of the suit. Decree sheet be drawn accordingly. File be consigned to record room after due compliance.
Announced & dictated
in the open Court on
this 07th day of June, 2024 (NEELAM SINGH)
District Judge
(Commercial Court-02)
South-East, Saket Courts, ND
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