Delhi District Court
M/S Vijay Cotswin Pvt. Ltd vs Vinesh Sharma on 2 May, 2025
IN THE COURT OF SANJEEV KUMAR MALHOTRA
DISTRICT JUDGE (COMMERCIAL COURT)
NORTH EAST: KARKARDOOMA COURTS: DELHI
CS (Comm.) 115/23
CNR No.DLNE01-003306-2023
M/s Vijay Cotswin Pvt. Ltd.
Through Authorized Representative
Sh. Ankur Goyal
21 1st Floor, Mahila Colony, Gandhi Nagar,
Delhi -110031
Presently at:-
412-A, 1st Floor above Punjab & Sind Bank,
Jheel Chowk, Delhi-110051 ...Plaintiff
Versus
Sh. Vinesh Sharma,
Proprietor of M/s Neelkanth Textile,
J-2/9, Street No.12, Kartar Nagar,
Delhi-110053. ....Defendant
Date of Institution : 31.10.2023
Date of Arguments : 02.04.2025
Date of Judgment : 02.05.2025
JUDGMENT
1. This is a suit for recovery of Rs.1,14,01,982.82 (Rupees One Crore Fourteen Lacs One Thousand Nine Hundred Eighty Two and Eighty Two paise only) along with pendente lite and future interest @18% per annum, as filed by the plaintiff against the defendant through Sh. Ankur Goyal, Authorized Representative of the plaintiff company.
2. In brief, facts of the case as made out in the plaint are that the plaintiff is a Private Limited Company which deals CS(Comm) 114/23 M/s Vijay Cotswin Pvt. Ltd. vs. Vinesh Sharma Page 1 of 23 in a wholesale cloths supply business. It is stated that the retailer as well as the ready-made garment manufacturer used to purchase cloths from the plaintiff. It is further stated that the defendant is the proprietor of M/s Neelkanth Textile and was a regular customer of the plaintiff and was having a running account since long with the plaintiff and have placed various orders and also made various payments in account for realization of the invoices raised to him.
3. It is averred that as per the ledger Account of the defendant, there is a closing balance of Rs.24,27,560/- for Financial Year 2018-19 which was carried forward for the financial year 2019-20. It is stated that in the financial year 2019-20, the defendant placed various orders, against which, the material supplied to the defendant through tax invoices and also credited various credit which was properly depicted in the ledger account of the defendant and there was closing balance of Rs.1,16,25,861.82/- as on 31.03.2020, which was carried forward for the financial year 2020-21. It is further stated that in financial year 2020- 21, the defendant has credited Rs.2,00,000/- through RTGS and Rs.5,00,000/- on 02.11.2020, besides this the local GST of Rs.4,76,121/- was debited.
4. It is averred that on the closing of financial year 2020-21 there was an outstanding balance of Rs.1,14,01,982.82 and thereafter, there was no transaction. It is stated that plaintiff is entitled to claim interest after closing of financial year i.e. 31.03.2021 onwards @ 18 % per annum as agreed in Tax invoices.
CS(Comm) 114/23 M/s Vijay Cotswin Pvt. Ltd. vs. Vinesh Sharma Page 2 of 235. It is submitted that the plaintiff demanded his balance outstanding amount from the defendant through various telephonic calls, sending e-mail and personal visits to the defendant premises, but all went in vain and therefore the plaintiff was constrained to issue the legal demand notice dated 27.05.2022 demanding therein the balance outstanding amount of Rs.1,14,01,982.82 along with interest @18% per annum from the date of notice i.e. 27.05.2022, but despite service of demand notice, the defendant failed to make the payment.
6. It is further stated that the plaintiff also exhausted the remedy available under Section 12A of the Commercial Courts Act, 2015 for pre-institution mediation and settlement where no settlement arrived between the parties and thereafter, a Non Starter Report was issued.
7. It is averred that the tax invoices bear the clause of interest @ 18% from the due date but in notice, plaintiff demanded the interest from the date of notice, which is calculated as per Order VII Rule 2A CPC, the details of same are as under:-
S. The rate at The date The date to The total The daily No which from which which it is amount of rate at interest is it is claimed calculated interest which claimed claimed to the interest date of accrues calculation after that date 1 18 % per 27.05.2022 From Rs.2760842/- 0.049315% annum i.e. from the 27.05.2022 Rs.5622.89 date of to per day notice 01.10.2023 CS(Comm) 114/23 M/s Vijay Cotswin Pvt. Ltd. vs. Vinesh Sharma Page 3 of 23
8. The plaintiff prays that a decree may be passed in its favour and against the defendant for a total sum of Rs.1,14,01,982.82 alongwith pendente lite and future interest @18% per annum with costs of the suit. Hence, the present suit.
9. Defendant contested the present suit by filing detailed written statement while taking preliminary objections that the plaint does not disclose any cause of action in favour of the plaintiff and against the defendant and same is liable to be dismissed under Order VII Rule 11 CPC; that present suit is ex-facie barred by limitation; the claim of the plaintiff for every invoice i.e. from 26.11.2019 to 21.11.2020 is time barred as the right to sue qua each of the said invoice would accrue from the alleged delivery of goods; that there is no running account and all the admitted payments were made by the defendant against the goods received; that there is no dispute qua any alleged outstanding has ever arisen between the plaintiff and the defendant and that even if any dispute is claimed to have ever arisen between the plaintiff and the defendant as per the alleged invoices filed by the plaintiff, the same have to be resolved/decided through Arbitration as per the provisions of 'Arbitration and Conciliation Act', which is categorically mentioned in all the alleged bills/invoices and therefore the suit is barred by Section 8 of the Arbitration and Conciliation Act, 1996; the purported certificate under Section 65B of Indian Evidence Act through which all the alleged computer generated invoices and other documents are sought to be proved, is not in accordance with law; that CS(Comm) 114/23 M/s Vijay Cotswin Pvt. Ltd. vs. Vinesh Sharma Page 4 of 23 the statement of account filed by the plaintiff is nothing more than a self serving statement; that neither any such invoice was provided to defendant nor the defendant received any such material as alleged; there are no delivery challans or GRs qua the alleged delivery of goods to the defendant, even the vehicle numbers are not mentioned in the invoices and ex-facie, the invoices are false and fabricated; that all the orders placed by the defendant with the plaintiff have been duly settled and there were no delay ever on the part of the defendant in making the payment towards the clothing materials which the defendant had purchased from the plaintiff on regular basis.
10. On merits, the contents of the plaint have been denied as wrong. It is thus submitted that suit of the plaintiff is liable to be dismissed with exemplary costs.
11. Replication to the written statement of defendant was filed on behalf of plaintiff, wherein plaintiff denied the facts as mentioned in written statement while re-affirming the facts as mentioned in the plaint.
12. From the pleadings of the parties following issues were framed vide order dated 08.05.2024:-
1. Whether the suit of plaintiff is barred by limitation? OPD
2. Whether plaintiff is entitled for a decree for sum of Rs.1,14,01,982.82/-?OPP
3. Whether plaintiff is entitled for pendente lite and future interest @18% per annum, as prayed?OPP
4. Relief.CS(Comm) 114/23 M/s Vijay Cotswin Pvt. Ltd. vs. Vinesh Sharma Page 5 of 23
13. In this case, Sh. Nand Kishore, Advocate was appointed as Local Commissioner to record the evidence of parties. Ld. Local Commissioner has filed his report on 22.11.2024 alongwith evidence of PW-1, PW-2 and PW-3.
14. Perusal of record shows that the Ld. Local Commissioner recorded the cross examination of the defendant i.e. DW-1 on 16.12.2024 and 18.12.2024 and the cross-examination of DW-1 conducted on 16.12.2024 was shared with Ld. Counsels for parties on the Whatsapp group created by Ld. Local Commissioner while unsigned copy of evidence recorded by him on 18.12.2024 was also provided to the parties. Perusal of record further goes to show that on 18.12.2024, Ld. Local Commissioner recorded the evidence of defendant witnesses in the court premises, but before the Ld. Local Commissioner could file his report, unfortunately he passed away on the very same day.
15. Perusal of record further shows that both the parties gave statement before the court on 28.01.2025 that they have no objection in case this court rely upon the true copies of cross examination of DW-1 recorded on 16.12.2024 and 18.12.2024 and shared on Whatsapp group created by Ld. Local Commissioner to Ld. Counsels for both the parties, as original was with the Ld. Local Commissioner, who is no more, which is exhibited as Ex.DW1/X-2.
16. As per report of Ld. Local Commissioner, plaintiff in support of its case, examined Sh. Ankur Goyal, AR as PW-1, who tendered his examination in chief by way of CS(Comm) 114/23 M/s Vijay Cotswin Pvt. Ltd. vs. Vinesh Sharma Page 6 of 23 affidavit Ex.PW1/A. PW-1 has relied upon following documents:-
1. Copy of Incorporation Certificate i.e. Ex.PW1/1.
2. True copy of board resolution i.e. Ex.PW1/2.
3. Copy of statement of account pertaining to years 2018-19, 2019-20 & 2020-21 i.e. Ex.PW1/3 (colly).
4. Copy of Tax Invoice No.VCPL/19-20/198 i.e. Mark A.
5. Copy of Tax Invoice No. VCPL/19-20/199 to VCPL/2021/005 i.e. Ex.PW1/4 to Ex.PW1/23.
6. Copy of attested GST Returns and Affidavit u/s 63 of BSA i.e. Ex.PW1/26A (colly).
7. Copy of certificate u/s 65B of Indian Evidence Act i.e. Ex.PW1/27.
8. Copy of notice and postal receipts i.e. Ex.PW1/28 & Ex.PW1/29 (colly).
9. Copy of Legal notice dated 27.05.2022 and postal receipts i.e. Ex.PW1/30 and Ex.PW1/31 (colly).
10. Original Non-Starter Report i.e. Ex.PW1/32.
17. Plaintiff also examined Mr. Ashutosh Kumar, Stenographer GR-III, Department of Trade & Taxes, Govt. of NCT of Delhi as PW-2, who brought the record of GSTR-1 pertaining to financial year 2019-20 and 2020-21 in respect of M/s Vijay Cotswin Private Limited having its GST No.07AACCV4696A2ZA and proved the same as Ex.PW2/1 (colly). He also proved the certificate u/s 65B of Indian Evidence Act in support of GSTR-1 as Ex.PW2/2.
CS(Comm) 114/23 M/s Vijay Cotswin Pvt. Ltd. vs. Vinesh Sharma Page 7 of 2318. Plaintiff also examined Mr. Lakshay Lakra, Sr. Assistant, Department of Trade & Taxes, Govt. of NCT of Delhi as PW-3, who brought the record of GSTR-2A and GSTR-3B pertaining to financial year 2019-20 & 2020-21 in respect of M/s Neelkanth Textile having its GST No.07BGSPS1185D1Z2 and proved the same as Ex.PW3/1 (colly). He also proved certificate u/s 63 of BSA in support of GSTR-2A and GSTR-3B as Ex.PW3/2.
19. Defendant in support of his case, examined himself as DW-1 and tendered his affidavit of evidence as Ex.DW1/A. It is pertinent to note over here that the affidavit of evidence of DW-1 was filed before Ld. Local Commissioner and same could not be filed on record on account of death of Ld. Local Commissioner, however, the affidavit of evidence of DW-1 was also filed through e-filing and with the consent of both the parties, printout of affidavit of evidence of DW-1 i.e. Ex.DW1/A is taken from e-portal and placed on record.
20. Arguments have been advanced by Sh. G. D. Sharma, Ld. Counsel for plaintiff and by Sh. Bheem Sain, Ld. Counsel for defendant. I have given my thoughtful consideration to the rival submissions made by the parties and also gone through the record as well as written submissions, as filed on behalf of both parties. Ld. Counsel for defendant has also relied upon the authorities reported as State of Karnataka vs. Ecom Gill Coffee Trading Private Limited, 2023 SCC Online SC 248; Anil Rice Mill vs. State of U.P. and Ors., MANU/UP/2990/2024; M/s SPP Foods Products Pvt. Ltd. vs. M/s Hannu Marketing, 2018 SCC CS(Comm) 114/23 M/s Vijay Cotswin Pvt. Ltd. vs. Vinesh Sharma Page 8 of 23 Online Del 11288; Madhu Sudan Sharma and Ors. vs. Omaxe Ltd., MANU/DE/7481/2023; Pawan Gupta and Ors. vs. Kamal Gupta and Ors., MANU/DE/2250/2024; Aditya Birla Finance Limited vs. Shri Jagannath Memorial Educational Trust and Ors., MANU/DE/8418/2023 and S. Charanjeet Singh vs. UT of J&K and Ors., RFA No.52/2023, decided by Hon'ble High Court of J&K and Ladakh at Jammu on 13.03.2025. My issue wise findings are as under:-
Issue no.1:-
1. Whether the suit of plaintiff is barred by limitation?
OPD
21. Onus to prove this issue was upon the defendant. Ld. Counsel for defendant argued that claim of the plaintiff for every invoice i.e. from 26.11.2019 to 21.11.2020 is time barred as the right to sue qua each of the said invoice would accrue from the alleged delivery of goods.
22. Ld. Counsel for defendant vehemently contended that a running account under Article 1 of the Limitation Act, 1963 means an open mutual and current account and it requires shifting balances i.e. sometimes there is credit balance in favour of one person and sometimes there is credit balance in favour of another person. Thus, it is submitted that the contention of plaintiff that there was a running account of the defendant with the plaintiff company is incorrect and as such, the suit of plaintiff is barred by limitation. To buttress his contention, Ld. Counsel for defendant has relied upon the following authorities titled as CS(Comm) 114/23 M/s Vijay Cotswin Pvt. Ltd. vs. Vinesh Sharma Page 9 of 23 Hindustan Forest Company vs. Lal Chand, AIR 1959 SC 1349; Kesharichand Jaisukhal vs. Shillong Banking Corporation, AIR 1965 SC 1711; M/s Videocon International Ltd. vs. M/s City Palace Electronics Pvt. Ltd., ILR (2012) V Delhi 14 and Continental Advertising (P) Ltd. vs. Karan & Co., 2018 SCC Online Del 11921.
23. Per contra, Ld. Counsel for plaintiff argued that plaintiff supplied the material to the defendant through invoices Mark A and Ex.PW1/4 to Ex.PW1/23 with respective e-way bills. It is submitted that as per ledger account Ex.PW1/3 (colly), defendant made the last payment of Rs.5 lac through RTGS on 02.11.2020 and the plaintiff has filed the present suit on 31.10.2023 i.e. within the period of limitation.
24. Hon'ble Division Bench of Delhi High Court in a case titled as Bharath Skins Corporation vs. Taneja Skins Company Pvt. Ltd., (2012) 186 DLT 290 while considering the judgment of Hon'ble Supreme Court in Hindustan Forest Company vs. Lal Chand (supra) held as under and I quote:-
"15. In view of the above discussion, since the dealings between the parties disclose a single contractual relationship i.e. of buyer and seller between them, the account between them cannot be termed as a 'mutual' account. As a necessary corollary, Article 1 of the Schedule to the Limitation Act, 1963 has no application in the present case.
19. In the instant case, the account between the parties was an open, running and non-mutual account.CS(Comm) 114/23 M/s Vijay Cotswin Pvt. Ltd. vs. Vinesh Sharma Page 10 of 23
23. The upshot of the above discussions is that Article 14 of the Schedule to the Limitation Act, 1963 does not apply to suits for recovery of money due on a running and current but a non-mutual account between the buyer and seller i.e. an account of the kind with which we are dealing.
24. There being no Article in the Schedule to the Limitation Act, 1963 dealing with suits for recovery of money due on running and current but non-mutual accounts, in such circumstances, the residual article viz. Article 113 applies to such suits.
25. Under Article 113, the period for limitation for filing a suit is three years and the same begins to run when the right to sue would accrue when claim was denied in response to the legal notice dated 26.06.1985 on 13.07.1985 but since `7,000/- was paid on 13.07.1985 and 24.07.1985 (`2,000/- on the former date and `5,000/- on the latter date), limitation would commence from 24.07.1985. The suit being filed on 02.09.1985, governed for purposes of limitation by Article 113 the suit would be within limitation."
25. Adverting back to the facts of the present case, admittedly the dealing between the parties discloses a single contractual relationship i.e. buyer and of seller, therefore, the account between them cannot be termed as a mutual account for application of Article 1 of the Schedule of the Limitation Act, 1963. However, as the ledger account of the plaintiff is running and current but non-mutual account, therefore, Article 113 of the Limitation Act, 1963 would apply which provides that the period of limitation is three CS(Comm) 114/23 M/s Vijay Cotswin Pvt. Ltd. vs. Vinesh Sharma Page 11 of 23 years from the date when the right to sue accrues and in the present case, it accrued on the date when the defendant made the last payment of Rs.5 lac i.e. on 02.11.2020. The plaintiff has filed the present suit on 31.10.2023 i.e. within the period of three years from the date when the right to sue accrued. Accordingly, it is held that suit of plaintiff is within the limitation period. This issue is decided against the defendant and in favour of the plaintiff.
Issue no.2:-
Whether plaintiff is entitled for a decree for sum of Rs.1,14,01,982.82/-?OPP
26. Onus to prove this issue was upon the plaintiff. PW-1 in his affidavit of evidence Ex.PW1/1 deposed that the defendant was among the old and regular customer of the plaintiff and as per order of the defendant, the plaintiff company supplied material through various invoices and the closing balance used to be carried out for the next financial year. PW-1 deposed that plaintiff company as per order of defendant in last one year, supplied material through invoices Mark A and Ex.PW1/4 to Ex.PW1/23 and all the sales have been duly entered in GSTR-1 which is exhibited as Ex.PW1/26A (colly).
27. Ld. Counsel for the defendant argued that plaintiff has failed to prove delivery of the goods by the purported invoices. It is submitted that the alleged invoice Mark A, Ex.PW1/4 to Ex.PW1/6, Ex.PW1/11 to PW1/17 and Ex.PW1/19 to Ex.PW1/23 are not accompanied by Part B of the e-way bills and alleged invoices Ex.PW1/7 to CS(Comm) 114/23 M/s Vijay Cotswin Pvt. Ltd. vs. Vinesh Sharma Page 12 of 23 Ex.PW1/10 and Ex.PW1/18 are neither accompanied by Part A and Part B of the e-way bills. It is submitted that alleged invoices do not even have details of the vehicle numbers and no documents regarding payment of freight charges are filed on record. Ld. Counsel for the defendant vehemently contended that GST record are not the proof of actual delivery of the goods. It is submitted that without the proof of delivery of goods, no liability can be fastened upon the defendant. Ld. Counsel for defendant further argued that PW-1 has admitted in his cross examination that in case the goods worth over Rs.1 lac to be supplied in Delhi, the generation of e-way bills is mandatory under the GST Act. Ld. Counsel for the defendant has relied upon the authorities titled as State of Karnataka vs. Ecom Gill Coffee Trading Private Limited (supra); Anil Rice Mill vs. State of U.P. and Ors. (supra) and M/s SPP Foods Products Pvt. Ltd. vs. M/s Hannu Marketing (supra).
28. Per contra, Ld. Counsel for the plaintiff argued that as per Rule 138 (3) of GST Act, if the transportation distance is less than 50 km and the goods are to be transported within the same state, there is no need to generate Part B of the e-way bill. Ld. Counsel for plaintiff further argued that admittedly the distance between the office/shop of plaintiff and defendant is 3-4 kms, therefore, as per GST rules, there was no need for generation of Part B of e-way bill, which is even otherwise the duty of Transporter.
29. Ld. Counsel for plaintiff argued that since the defendant has denied the receipt of goods supplied to him CS(Comm) 114/23 M/s Vijay Cotswin Pvt. Ltd. vs. Vinesh Sharma Page 13 of 23 through invoices Mark A and Ex.PW1/4 to Ex.PW1/23, therefore, plaintiff issued notice under Order 12 Rule 8 CPC dated 01.07.2024 and asked the defendant to produce the authenticated copy of GSTR-2A and GSTR-3B, but the defendant had given an evasive reply. It is submitted that GSTR-2A and GSTR-3B of the defendant as produced by PW-3 Sh. Lakshay Lakra shows that the defendant had disclosed about these invoices in his return and claimed input tax credit of these invoices as appearing in his GSTR-2A and 3B.
30. In order to prove that the defendant received material through invoices Mark A and Ex.PW1/4 to Ex.PW1/23, but deliberately not accepting the receiving of goods, Ld. Counsel for plaintiff issued a notice under Order XII Rule 8 CPC i.e. Ex.PW1/28 to produce the authenticated copy of GST return i.e. 2A and 3B pertaining to dealings with the plaintiff company for the financial year 2019-20 and 2020-
21. The defendant replied that the said notice is an attempt to create an evidence on the pretext of seeking production of documents and further submitted that the defendant has been out of business for last more than three years and has been constantly incurring losses.
31. During cross examination, the attention of defendant was drawn by Ld. Counsel for plaintiff towards his statement GSTR-3B i.e. Ex.PW3/1 for the month of November, 2019, December, 2019, February, 2020 and July 2020 and he was asked that he has claimed entire input tax for the abovesaid months, on which, the defendant replied that he cannot say. Further, the defendant was asked that as CS(Comm) 114/23 M/s Vijay Cotswin Pvt. Ltd. vs. Vinesh Sharma Page 14 of 23 there are entries in his GSTR-2A and his correct GST number is mentioned in tax invoices and e-way bills, therefore, he had received auto populated message in his registered mobile number and email ID, but the defendant replied that he does not remember. Thus, the defendant during his cross examination when confronted with his statement GSTR-2A and GSTR-3B, gave evasive replies regarding mentioning of invoices in his return through which goods were supplied by the plaintiff and with regard to input tax credit claimed by him regarding the invoices in question.
32. It was argued by Ld. Counsel for the defendant that GST records are not the proof of actual delivery of the goods and even the alleged invoices are not accompanied with the Part B of e-way bills and in some invoices, there is neither Part A nor Part B of e-way bill. It is a settled legal proposition that generation of e-way bill in itself does not amount to proof of delivery. However, the question comes to decide that even if the defendant has given the details of the invoices through which goods were allegedly supplied to him by the plaintiff in his GSTR-2B and also claimed input tax credit for those invoices, can the defendant still deny the delivery of the goods. In this regard, it is relevant to refer to Sub-sections (1) and (2) of Section 16 of the CGST Act. The same are set out below:
"16. Eligibility and conditions for taking input tax credit.-
(1) Every registered person shall, subject to such CS(Comm) 114/23 M/s Vijay Cotswin Pvt. Ltd. vs. Vinesh Sharma Page 15 of 23 conditions and restrictions as may be prescribed and in the manner specified in section 49, be entitled to take credit of input tax charged on any supply of goods or services or both to him which are used or intended to be used in the course or furtherance of his business and the said amount shall be credited to the electronic credit ledger of such person.
(2) Notwithstanding anything contained in this section, no registered person shall be entitled to the credit of any input tax in respect of any supply of goods or services or both to him unless, -
(a) he is in possession of a tax invoice or debit note issued by a supplier registered under this Act, or such other tax paying documents as may be prescribed;
(aa) the details of the invoice or debit note referred to in clause
(a) has been furnished by the supplier in the statement of outward supplies and such details have been communicated to the recipient of such invoice or debit note in the manner specified under section 37.
(b) he has received the goods or services or both.
Explanation.- For the purposes of this clause, it shall be deemed that the registered person has received the goods or, as the case may be, services..."
33. Thus, Section 16 of CGST Act, 2017 provides that in case a buyer has taken the benefit of input tax credit, it shall be deemed that he has already received the goods/services provided to him by the plaintiff. The authority i.e. State of CS(Comm) 114/23 M/s Vijay Cotswin Pvt. Ltd. vs. Vinesh Sharma Page 16 of 23 Karnataka vs. Ecom Gill Coffee Trading Private Limited (supra) is not helpful in the facts and circumstances of present case as in that matter the issue was with regard to Section 70 of Karnataka Value Added Tax Act, 2003 and it was held that as per Section 70 of the Act, the burden of proving that the ITC claim is correct lies upon the purchasing dealer claiming such ITC and merely because the dealer claiming such ITC claims i.e. he is a bonafide purchaser is not enough and sufficient. The another authority as relied upon by Ld. Counsel for defendant i.e. Anil Rice Mill vs. State of UP and Ors. (supra) is also not helpful in the facts and circumstances of the present case as in that case Hon'ble Allahabad High Court relying upon the judgment of Hon'ble Apex Court titled as State of Karnataka vs. M/s Ecom Gill Coffee Trading Pvt. Ltd. (Civil Appeal No.230 of 2023) decided on 13.03.2023 held that primary burden for claiming the input tax credit is upon the dealer to furnish the details of dealer, vehicle number, payment of freight charges, acknowledgment of taking delivery of goods, tax invoices and payment particulars etc. to prove and establish the actual physical movement of the goods. As the defendant has claimed input tax credit of the invoices through which plaintiff supplied goods to him as also appearing in Ex.PW3/1 (colly), it is held that defendant had received the goods as supplied by the plaintiff through invoices Mark A and Ex.PW1/4 to Ex.PW1/23.
34. Ld. Counsel for defendant vehemently contended that the alleged invoices as relied upon by the plaintiff i.e. Mark A and Ex.PW1/4 to Ex.PW1/23, contains an arbitration CS(Comm) 114/23 M/s Vijay Cotswin Pvt. Ltd. vs. Vinesh Sharma Page 17 of 23 clause printed thereon and the defendant has taken specific defence in para no.4 of the preliminary objections that suit of the plaintiff is barred by Section 8 of the Arbitration and Conciliation Act, 1996. Ld. Counsel for defendant argued that plaintiff has also admitted in his cross examination that under the tax invoices, all the disputes were required to be resolved through the process of arbitration under the provision of Arbitration and Conciliation Act.
35. Ld. Counsel for defendant vehemently contended that it is a settled proposition of law that in order to seek a reference of dispute to arbitration, a party is only required to raise an objection to the civil courts jurisdiction by bringing the said to the notice of the court and therefore, the present suit is barred by Section 8 of the Arbitration and Conciliation Act, 1996. Ld. Counsel for defendant has relied upon the authorities titled as Madhu Sudan Sharma and Ors. vs. Omaxe Ltd. (supra); Pawan Gupta and Ors. vs. Kamal Gupta and Ors. (supra); Aditya Birla Finance Limited vs. Shri Jagannath Memorial Educational Trust and Ors. (supra) and S. Charanjeet Singh vs. UT of J&K (supra).
36. Per contra, Ld. Counsel for plaintiff argued that defendant has denied each and every document of the plaintiff including the invoices containing arbitration clause and in his cross examination has categorically admitted that he had never given his consent for adjudication of his dispute through arbitration. Ld. Counsel for plaintiff further argued that the defendant has tried to sail upon two boats CS(Comm) 114/23 M/s Vijay Cotswin Pvt. Ltd. vs. Vinesh Sharma Page 18 of 23 while on one hand claiming that the invoices are forged & fabricated and on the other hand, taking a plea that suit is barred as there is an arbitration clause printed on the invoices.
37. Hon'ble Supreme Court of India in Bihar State Mineral Development Corporation and Anr. vs. Encon Builder (1) (P) Ltd., reported in [2003] 7 SCC 418, laid down the essential elements of the arbitration agreement, which are as follows:
(i) There must be a present or a future difference in connection with some contemplated affair;
(ii) There must be the intention of the parties to settle such difference by a private tribunal;
(iii) The parties must agree in writing to be bound by the decision of such tribunal; and
(iv) The parties must be ad idem.
38. Hon'ble Delhi High Court in a case titled as Sagar Ratna Restaurants Pvt. Ltd. vs. DS Foods and Ors., AIR Online 2021 DEL 634, held as under and I quote:
"24 In Telefonaktiebolaget Lm Ericsson (Publ) vs. Intex Technologies (India) Ltd., 2015 (62) PTC 90 (Del), this Court reiterated as under:-
"144. It is equally well-settled that the party cannot be allowed to approbate or reprobate at the same time so as to take one position, when the matter is going to his advantage and another when it is operating to his detriment and more so, when there is a same matter CS(Comm) 114/23 M/s Vijay Cotswin Pvt. Ltd. vs. Vinesh Sharma Page 19 of 23 either at the same level or at the appellate stage.
145. In the case of Dwijendra Narain Roy vs. Joges Chandra De, MANU/WB/0151/1923: AIR 1924 Cal 600, The Division Bench of the Calcutta High Court has succinctly held:
It is an elementary rule that a party litigant cannot be permitted to assume inconsistent positions in Court, to play fast and loose, to blow hot and cold, to approbate and reprobate to the detriment of his opponent. This wholesome doctrine, the learned Judge held, applies not only to successive stages of the same suit, but also to another suit than the one in which the position was taken up, provided the second suit grows out of the judgment in the first.
(Emphasis Supplied) Applying the said principles of law to the present case, it is apparent that if the defendant is allowed to re-agitate, it would also lead to allowing the party to approbate and reprobate at the same time which is clearly impermissible. The plea is thus barred by way of principle of approbate or reprobate which is a facet of estoppels as the defendant had accepted the findings of the Division Bench and Single Judge. There are no subsequent events which have changed warranting re- adjudication of the matter.
25. It is also to be seen that arbitration is an Alternate Dispute Resolution mechanism which is resorted to by the parties with their consent. The parties have to be ad idem for the same. The respondents have, in the earlier instance, clearly envisaged an intent not to be bound by the CS(Comm) 114/23 M/s Vijay Cotswin Pvt. Ltd. vs. Vinesh Sharma Page 20 of 23 Arbitration Agreement so far as the claim of the petitioner to the trademark is concerned. The petitioner has now accepted that opposition and has invoked the ordinary jurisdiction of a Civil Court seeking enforcement of its rights in the trademark. Where both the parties have become ad idem that the dispute raised by the petitioner is not arbitrable in nature, the parties could not have been referred to arbitration."
39. Adverting back to the facts of present case, on one hand, the defendant in para no.4 of reply on merits of his written statement has specifically submitted that ex-facie the invoices are false and fabricated and on the other hand, has taken a preliminary objection that even if any dispute is claimed to have arisen as per alleged invoices, same is to be decided through arbitration as per the provisions of Arbitration and Conciliation Act, 1996. Defendant in his cross examination has specifically deposed that he had never given his consent for adjudication of his dispute with the plaintiff through arbitrator/arbitration. Thus, the defendant cannot be permitted to blow hot and cold while on one hand submitting that the invoices are false and fabricated and on the other hand claiming that the said alleged invoices contains arbitration clause and as such, same have to be decided through arbitration. Further, the defendant by admitting that he had never given his consent for adjudication of his dispute with the plaintiff through arbitrator/arbitration, cannot take a plea that suit is liable to be dismissed under Section 8 of the Arbitration and Conciliation Act.
CS(Comm) 114/23 M/s Vijay Cotswin Pvt. Ltd. vs. Vinesh Sharma Page 21 of 2340. Plaintiff has proved that he supplied material to the defendant through invoices Mark A and Ex.PW1/4 to Ex.PW1/23 for which the defendant has also claimed input tax credit in his GST return. As per ledger account Ex.PW1/3 (colly), a sum of Rs.1,14,01,982.82/- was outstanding against the defendant as on 21.11.2020.
41. The suit of plaintiff is also commercial in nature and squarely falls within the purview of Section 2 (1) (c) of the Commercial Courts Act, 2015 and plaintiff has also duly complied with the mandatory provision of Pre-institution mediation and conciliation as provided in Section 12A of the Commercial Courts Act, 2015. The defendant is working for gain from J-2/9, Street no.2, Kartar Nagar, Delhi-53, which area falls within the territorial jurisdiction of this court. This Court also has the pecuniary jurisdiction over the matter since the suit amount claimed by the plaintiff is more than the specified value of Rs.3 lacs of the Commercial Courts.
42. In view of above reasons and findings, it is held that plaintiff is entitled for recovery of Rs.1,14,01,982.82/- from the defendant. Accordingly, this issue is decided in favour of the plaintiff and against the defendant.
Issue no.3:-
Whether plaintiff is entitled for pendente lite and future interest @18% per annum, as prayed?OPP
43. Onus to prove this issue was upon the plaintiff.
Plaintiff has claimed pendente lite and future interest @ 18% per annum. There is no agreement between the parties CS(Comm) 114/23 M/s Vijay Cotswin Pvt. Ltd. vs. Vinesh Sharma Page 22 of 23 regarding specific rate of interest. Admittedly the transactions between the parties are of commercial in nature, therefore, as per Section 34 CPC, plaintiff is entitled to pendente lite and future interest at which moneys are lent by the nationalized bank in relation to commercial transactions i.e. @ 12% per annum from the date of filing of suit till realization. Accordingly, it is held that plaintiff is entitled to recover the amount i.e. Rs.1,14,01,982.82/- alongwith interest @ 12 % per annum from the date of filing of suit till realization from the defendant.
Relief
44. In view of my findings on aforementioned issues, the suit of plaintiff is decreed for a sum of Rs.1,14,01,982.82/- alongwith pendente lite and future interest @ 12 % per annum from the date of filing of suit till realization in favour of plaintiff and against the defendant. Costs of suit are also awarded in favour of the plaintiff. Decree Sheet be prepared accordingly. Digitally signed by SANJEEV SANJEEV KUMAR MALHOTRA File be consigned to Record Room.
KUMAR MALHOTRA Date:
2025.05.02 17:12:09 Announced in the open court +0530 on 02nd May, 2025 (Sanjeev Kumar Malhotra) District Judge (Commercial Court) North-East District Karkardooma Courts, Delhi CS(Comm) 114/23 M/s Vijay Cotswin Pvt. Ltd. vs. Vinesh Sharma Page 23 of 23