Delhi District Court
M/S Chrysalis Creation Through Its ... vs Msd Fabrics A Proprietorship Firm, ... on 24 October, 2024
IN THE COURT OF MS. ANURADHA SHUKLA
BHARDWAJ: DISTRICT JUDGE (COMMERCIAL COURT)-
02, SOUTH, SAKET, DELHI
CS (COMM) 240/23
1. M/S. CHRYSALIS CREATION
THROUGH ITS PROPRIETOR
MS. RASHMI BHARATIYA
Through its Proprietor
Ms. Rashmi Bharatiya
JD-14, Ground Floor, Gupta Colony,
Khirki Extension, Malviya Nagar,
New Delhi-110017.
.......Plaintiff
VERSUS
1. MSD FABRICS PROPRIETORSHIP FIRM
THROUGH PROPRIETOR
DEFENDANT NO.2
At Plot No.2, 1st Floor,
Near Raliance Fresh,
Dayal Bagh Road,
Charm-Wood Village,
Eros Garden, Sector-39,
Faridabad-121009.
2. Ms. Renu Gupta
R/o. A-1984, Green Field Colony,
Faridabad, Haryana-121010.
3. Mr. Vaibhav Gupta
S/o. Ms. Renu Gupta
R/o. A-1984, Green Field Colony,
Faridabad, Haryana.
..... Defendants
24.10.2024
CS (COMM) 240/23 Page 1 of 17 M/s. Chrysalis Creation Through Its Proprietor
Ms.Rashmi Bharatiya Vs. MSD Fabrics A Proprietorship
Firm Through Its Proprietor Defendant no.2.
ORDER
1. By this order, I shall dispose of application u/o XXXVII rule 3 (5) r/w section 151 CPC filed by defendants seeking leave to defend in the suit of recovery filed by the plaintiff u/o XXXVII CPC.
2. The grounds seeking leave to defend inter-alia are that the suit is not maintainable u/o XXXVII CPC; that there are many flaws, irregularities, illegality and contradictions which require evidence to be led; that the suit is based on invoices and is not maintainable as the invoices were never admitted by the defendants; that there is no contract between the parties and as such in absence of admission of bills by defendants the suit is not maintainable u/o XXXVII CPC; that the claim of plaintiff is based on incorrect, inflated, false and fabricated invoices; that there are false invoices under which either no material was supplied or material supplied was short; that the defendants need to lead defence in this regard and is entitled to grant of unconditional leave to defend; that the entire account of plaintiff has been settled and defendants have made entire payment; that the statement of account filed by the plaintiff is incorrect, incomplete, bogus, manipulated and fabricated; that the plaintiff has not shown entries of certain debit notes issued by defendants, credit notes, payments and many CS (COMM) 240/23 Page 2 of 17 M/s. Chrysalis Creation Through Its Proprietor Ms.Rashmi Bharatiya Vs. MSD Fabrics A Proprietorship Firm Through Its Proprietor Defendant no.2. claims/credits etc. of defendants in the statement of account; that there is no justification for charge of interest @ 24 % pm; that Defendant no.1 is proprietorship concern of D-2 and D-3 is son of D-2; that there is no privity of contract between plaintiff and D-3; that the suit is barred by limitation; that last invoice relied upon by plaintiff was raised on 09.10.2019 and the last payment was made on 07.02.2020 as such, the suit ought to have been filed by 06.02.2023 and that including the period of pre-litigation mediation the suit could have been filed on or before 05.04.2023, however, the same was filed on 10.04.2023 and is beyond limitation. It is stated that the court does not have territorial jurisdiction.
3. Reply to the application was filed, wherein the plaintiff took preliminary objections that the statement of accounts and debit notes filed by defendants are forged, fabricated, false, concocted and fudged. There is no plausible or real defence raised by the defendants warranting grant of permission to contest and defend the suit. The plaintiff has denied all the issues raised by defendants in leave to defend. It is stated that the defendants in the Whatsapp chat have clearly acknowledged pending payment to the plaintiff and counsel for defendants even shared a draft Memorandum Of Understanding containing the proposed payment schedule, according to which an amount of Rs.60,47,487/- was to be paid in 26 installments from 15.11.2021 till CS (COMM) 240/23 Page 3 of 17 M/s. Chrysalis Creation Through Its Proprietor Ms.Rashmi Bharatiya Vs. MSD Fabrics A Proprietorship Firm Through Its Proprietor Defendant no.2. 15.10.2023. The plaintiff has challenged the debit notes filed by defendants stating that same are not supported by any reference or communication of e-way bills in support. It is stated that rate of interest was mentioned as 2% monthly in the invoices and hence the interest @ 24% per annum has been claimed. In respect of limitation plaintiff has admitted that the Whatsapp chats and draft MOU annexed alongwith plaint show the acknowledgment on part of defendants, the suit is well within limitation from the said dates. Regarding territorial jurisdiction it is stated that orders were placed at the plaintiff's Malviya Nagar office. The payment was also to be received at the Malviya Nagar office.
4. Ld. Counsel for the plaintiff in support of its contention has relied upon the judgments in cases titled as M/s. Flint Group India Private Limited Vs. M/s. Good Morning India Media Private Limited, 2017 SCC Online Del 7894; Ashok Parshad Vs. Mahalaxmi Sugar Mills Co. Ltd, 2013 SCC Online Del 3629; Susumorov Enterprises Pvt. Ltd. Vs. Odeon Builders Pvt. Ltd., 2018 SCC Online Del 12509; M/s.Agroha & Anr. Vs. M/s. Klj Pollyalloys, 2012 SCC Online Del 5859; Sameer Bhutani Vs. Kewal Krishan Kumar, 2019 SCC Online Del 6868; TKW Management Solutions P.L Vs. Sherif Cargo and Anr., 2023 SCC Online 593 and Siria International (Regd.) Vs. Nitin Jain and Anr., 2022 SCC Online Del 4790.
CS (COMM) 240/23 Page 4 of 17 M/s. Chrysalis Creation Through Its Proprietor Ms.Rashmi Bharatiya Vs. MSD Fabrics A Proprietorship Firm Through Its Proprietor Defendant no.2.
5. Arguments were advanced by Sh.Ashutosh Lohia & Sh.Karan Sharma, Ld.Counsels for plaintiff as also by Sh. Manoj Kumar, Ld. Counsel for defendants. I have also gone through the record.
Today, Sh.Arunabh Banerjee appeared alongwith Sh.Debasish Bhaumik and stated that they have been recently engaged by defendants. In addition to whatever has already been argued Ld. Counsels appearing for defendants argued that the invoices relied upon by the plaintiff are of the period 2018 to 2019 while the statement of account is from 2016. The transactions it is stated were being carried since 2015. There is thus, discrepancy in the three documents being relied by the plaintiff. The arguments shall be considered as an additional arguments hereunder.
LIMITATION
6. Ld. Counsel for the plaintiff on 09.09.2024 filed the copies of receipts of e-filing dt. 10.04.2023 and 13.04.2023. Ld. Counsel for the defendants thereafter, filed an application u/s. 151 CPC stating that that the e- filing does not confer any right regarding limitation and physical filing at court complex shall be considered for the purpose of calculation of limitation. The limitation therefore, should be computed from the date of filing of the suit in this court, which was 26.04.2023.
CS (COMM) 240/23 Page 5 of 17 M/s. Chrysalis Creation Through Its Proprietor Ms.Rashmi Bharatiya Vs. MSD Fabrics A Proprietorship Firm Through Its Proprietor Defendant no.2.
7. The defendants have challenged the limitation stating that last payment was made by defendants on 07.02.2020, the suit therefore, should have been filed by 06.02.2023. 57 days were taken in pre-litigation mediation. The suit, however, was filed on 10.04.2023 and in the court on 26.04.2023. Ld. Counsel for the plaintiff in this regard has given his own computations.
8. Irrespective of the stands taken by the parties case of plaintiff shall be covered by the judgment of Hon'ble Supreme Court in Suo Moto Writ Petition (C) No. 3/2020. The Hon'ble Supreme Court while considering the issue of extension of limitation and suspension of period of pandemic had held as under:-
1.In computing the period of limitation for any suit, appeal, application or proceeding, the period from 15.03.2020 till 14.03.2021 shall stand excluded.
Consequently, the balance period of limitation remaining as on 15.03.2020, if any, shall become available with effect from 15.03.2021.
Later vide order dt.10.01.2022 in the same judgment the period of exclusion was declared by the court uptill 28.02.2022.
The Hon'ble Supreme Court vide the said order had extended the limitation for all the cases not only of which the limitation was falling between 15.03.2020 till 28.02.2022 but had also extended the limitation in all other CS (COMM) 240/23 Page 6 of 17 M/s. Chrysalis Creation Through Its Proprietor Ms.Rashmi Bharatiya Vs. MSD Fabrics A Proprietorship Firm Through Its Proprietor Defendant no.2. cases directing for exclusion of abovesaid period between 15.03.2020 till 28.02.2022 from limitation.
The relevant portion of order contained in para 5 is reproduced hereunder:-
" I. The order dated 23.03.2020 is restored and in continuation of the subsequent orders dated 08.03.2021, 27.04.2021 and 23.09.2021, it is directed that the period from 15.03.2020 till 28.02.2022 shall stand excluded for the purposes of limitation as may be prescribed under any general or special laws in respect of all judicial or quasi- judicial proceedings.
9. Computing from either order, the plaintiff on 15.03.2020 had almost two years 10 months period in its hand, the suit of the plaintiff shall be within limitation having been filed on 26.04.2023. The ground of limitation, therefore, is not available to the defendants.
10. Defendants are taking ground of misjoinder of parties as the suit has been instituted against proprietorship concern of Renu Gupta, however, Vaibhav Gupta has also been made a party. It is stated that Vaibhav Gupta has no concern with the proprietorship concern. It was also argued that proprietorship concern is not a legal entity. The defendants therefore, need an opportunity to take the preliminary objection. Ld. Counsel for plaintiff stated that the name of defendant no.3 be dropped from the array of parties and that the suit can be decreed against the CS (COMM) 240/23 Page 7 of 17 M/s. Chrysalis Creation Through Its Proprietor Ms.Rashmi Bharatiya Vs. MSD Fabrics A Proprietorship Firm Through Its Proprietor Defendant no.2. proprietor of firm Ms.Renu Gupta alone. Allowing leave to defend only to direct plaintiff to drop the defendants would not be the right course of action in my opinion when the defendants have not been able to raise any dispute on merit of the case, as shall be discussed hereunder. D-3 and D-1 therefore, are dropped from the array of parties and the suit is considered against D-2 proprietor of D-1 only.
11. It is stated by the defendant that the suit is based on invoices and is as such not maintainable u/o XXXVII CPC as there was no specific contract between the parties. It is stated that in absence of admission of bills by the defendant the present suit would not be maintainable u/o XXXVII CPC. Ld. Counsel for the plaintiff in this regard has relied upon the judgment in 2017 SCC online Del. 7894, M/s. Flint Group India Pvt. Ltd. Vs. M/s. Good Morning India Media Pvt. Ltd., wherein it was held by the Hon'ble High Court that an invoice can be basis for filing a suit u/o XXXVII CPC. The court relied upon judgment in Bharat Forge Ltd. Vs. Onil Gulati, 2005 (121) DLT 357, wherein it was held that "an invoice which incorporates the particulars of seller, purchaser, description of goods, weight, quantity, rates and price including sales tax and other dues, accompanied with additional terms as noted in the present case would be regarded as a written contract on acceptance by respondent is no longer res integra".
12. A perusal of the invoices filed by the plaintiff would CS (COMM) 240/23 Page 8 of 17 M/s. Chrysalis Creation Through Its Proprietor Ms.Rashmi Bharatiya Vs. MSD Fabrics A Proprietorship Firm Through Its Proprietor Defendant no.2. show that details of purchaser i.e MSD Fabric, Faridabad is mentioned. The details of plaintiff are given on the top of the bill. The documents are tax invoices. IGST has been calculated and written. Payment terms are also written. The bills have signature of recipient of goods as well.
13. It was argued by Ld. Counsel for the defendant that bills have not been admitted by the defendant and therefore, defendant is entitled for leave to defend and the plaintiff will have to prove the bills in evidence.
Ld. Counsel for plaintiff has with regard to denial of invoices by defendant relied upon the judgment of Hon'ble High Court in 2018 SCC Online Delhi 12509, Sasumorov Enterprises Pvt. Ltd. Vs. Odeon Builder Pvt. Ltd., wherein the Hon'ble High Court held that "a defendant cannot be permitted to convert a summary suit to an ordinary suit, by mere denial and by contending that the onus is on the plaintiff to prove. Order XXXVII of the CPC, if so interpreted, will defeat the legislative intent and will make the procedure for disposal of suits of the class intended to be summarily decided, longer rather than shorter. Order XXXVII is concerned with commercial suits, claim wherein is based on documents. A mere denial of the document cannot entitle the defendant to leave to defend. The defendant, in the leave to defend application, is required to plead all surrounding circumstances concerning the document, to create a doubt as to authenticity of the document. If the defendant does not plead so and/or does CS (COMM) 240/23 Page 9 of 17 M/s. Chrysalis Creation Through Its Proprietor Ms.Rashmi Bharatiya Vs. MSD Fabrics A Proprietorship Firm Through Its Proprietor Defendant no.2. not produce documents which in the ordinary course of the transaction ought to be with the defendant, leave to defend has to be refused".
14. It is stated by the defendant that the suit of the plaintiff is based on incorrect, inflated, false and fabricated invoices under which either no material was supplied or the material supplied was short. It is claimed by plaintiff that the bills were received by defendant and have been signed by Irfan, Raju, Amar etc. from the side of defendant. The defendant has not specified in the leave to defend as to which of the invoices was not received by the defendant. She has also not stated in the leave to defend application that Irfan, Amar, Raju etc. were not her employees. She has not specified as to which goods supplied through which invoice were short/defective. The defendant has not given details of short supply or defects, if any, in the leave to defend, which would make the case of plaintiff doubtful. In Sasumorov (Supra) the Hon'ble High Court while discussing the defence of defendant regarding invoices being false held as under:-
"30.The next contention of the counsel for the defendant is, that the invoices are false. Attention is drawn to the Purchase Orders produced before this Court by the plaintiff and which contain a term "Test Report required for above said material". It is stated that the material supplied by the plaintiff was not accompanied with the Test Report and was thus rejected by the defendant. CS (COMM) 240/23 Page 10 of 17 M/s. Chrysalis Creation Through Its Proprietor Ms.Rashmi Bharatiya Vs. MSD Fabrics A Proprietorship Firm Through Its Proprietor Defendant no.2. " 31. I have enquired from the counsel for the defendant, whether the defendant has pleaded and proved such rejection".
15. In the present matter while Ld. Counsel for defendant was arguing that there were defects/short supply etc. or there were invoices against which no material was supplied, it was asked from Ld. Counsel as to what document has he filed in support of his contention where any specification of such default is given. Ld. Counsel stated that he has filed debit notes and defendant's statement of account. He stated that these debit notes need to be proved in evidence. Ld. Counsel for the plaintiff vehemently disputed the debit notes stating that these are incomplete documents and have been fabricated by the defendant. Most of the debit notes mentioned by the defendant say- "on account of: details attached". With none of the debit notes any detail has been attached. In respect of three debit notes the defendant has written "debit note against bill no.508, rate difference of Rs.2; on account of 4D 225.5 x 82 DN; No. DN2019A/5 respectively. The first debit note is referring to a rate difference of Rs.2. In this debit note it is mentioned amount of Rs.4,612/- in respect of bill no.508, however, bill no.508 refers to three products of which the rates have been mentioned as Rs.70/-, Rs.160/- & Rs.62/-. The defendant has not clarified as to which of the three products had a rate difference of Rs.4,612/-. Even if it is CS (COMM) 240/23 Page 11 of 17 M/s. Chrysalis Creation Through Its Proprietor Ms.Rashmi Bharatiya Vs. MSD Fabrics A Proprietorship Firm Through Its Proprietor Defendant no.2. accepted for the sake of arguments that this debit note was issued, the same is for an amount of Rs.4,612/- only while the recovery suit filed by the plaintiff is for Rs.1,06,43,902/-. Further, the details having been given in this particular debit note do not justify or prove correctness of other debit notes in respect of which no details have been given by the defendant. In yet another debit note at page no.16 it is only written 4D 225.5 x 82. It is not mentioned as to in respect of which bill this debit note has been issued. The third debit note at page no.21 mentions DN/2019A/5. This debit note again does not mention against which bill or amount the debit note has been issued. Except for these three debit notes in none of the debit notes any particular/specification of bills/material/defect etc. are mentioned. The defendant has not specified as to how and when these debit notes were sent to the plaintiff. There is no receipt on the debit notes or any postal receipt showing the service upon plaintiff.
16. Ld. Counsel for defendant argued that even if three debit notes mention the details, the defendant should be given an opportunity to prove all the debit notes and that these three debit notes are sufficient to create a doubt in the case of plaintiff warranting trial. As discussed hereinabove two out of three debit notes are not giving any material details, which could create any suspicion on the invoices of the plaintiff as they are highly deficient in material particulars. Third debit note again is not clear as CS (COMM) 240/23 Page 12 of 17 M/s. Chrysalis Creation Through Its Proprietor Ms.Rashmi Bharatiya Vs. MSD Fabrics A Proprietorship Firm Through Its Proprietor Defendant no.2. to regarding what material was it issued, however, the same being for an amount of Rs.4,612/- whole of the claim of the plaintiff cannot be rejected only on account of one debit note. The defendant, even if it is considered for the sake of argument that this debit note was a valid debit note, would be entitled for a deduction of Rs.4,612/- from the claim of the plaintiff. Reliance is placed on 2019 SCC Online Del 6868, Sameer Bhutani Vs. Kewal Krishan Kumar. The Hon'ble Court quoted the judgment of Hon'ble Supreme Court in IDBI Trusteeship Services Ld. Vs. Hubtown Ltd., 2017 I SCC 568, wherein the Hon'ble Supreme Court on various defences raised in the said case had held in respect of each ground that no particulars were given; no dates were given. It was held that without the said particular, the story set up was indeed a cock and bull story. In Raj Narain Vs. HBN Housing Finance Ltd., 2013 SCC Online Del 3847 and Renu Aggarwal Vs. Baldev Raj Sachdeva, 2018, SCC Online Del 12299, it was held that "if unsubstantiated and vague pleas were to be entitled to grant of leave to defend, I fail to fathom as to in which cases leave can be refused and if such an interpretation is to be taken, the same would render the provision of Order 37 of the CPC nugatory."
17. It was argued by Ld. Counsel for the plaintiff that the defendant vide Whatsapp messages and the MOU which was shared in one of the Whatsapp messages acknowledged the dues and had agreed to make the CS (COMM) 240/23 Page 13 of 17 M/s. Chrysalis Creation Through Its Proprietor Ms.Rashmi Bharatiya Vs. MSD Fabrics A Proprietorship Firm Through Its Proprietor Defendant no.2. payment. The printouts of Whatsapp messages running from page 207 to 303 have been relied upon in this regard. The plaintiff has filed certificate u/s. 65-B of Indian Evidence Act. Relevantly, the defendant nowhere in the entire leave to defend have challenged the communications made through Whatsapp and not even the MOU being relied upon by the plaintiff. There are clear admissions in the Whatsapp messages and the MOU. The defendant in the leave to defend was expected to explain as to under what circumstances these messages were exchanged between parties and what had led to drafting of MOU being relied upon by plaintiff. The silence of defendant vis-a-vis these documents will be read against defendant in holding that defendant had agreed to creation of MOU and had exchanged the Whatsapp messages and thus to a conclusion that defendant in fact had no defence to raise in respect of admission made by it through Whatsapp messages regarding the payments to be made to the plaintiff.
18. Today, it was argued by Ld. Counsel appearing for the defendant that the period of invoices, statement and initiation of business is differently mentioned. In so far as the argument regarding business having been initiated in 2015 is concerned, plaintiff in para 3 has stated that in the year 2015 defendant had approached plaintiff and had placed orders. The said fabrics were duly supplied against due payment. In the next para it says that post the year CS (COMM) 240/23 Page 14 of 17 M/s. Chrysalis Creation Through Its Proprietor Ms.Rashmi Bharatiya Vs. MSD Fabrics A Proprietorship Firm Through Its Proprietor Defendant no.2. 2015 due to the trust and faith the plaintiff started having regular business dealings with the defendant. The regular business thus had started after 2016. Statement of account filed by the plaintiff at page 197 is beginning from 03.10.2016. The suit has been filed in respect of unpaid invoices and therefore, only those invoices which were not paid by the plaintiff have been mentioned. There are no discrepancies pointed out in respect of the tax invoices and delivery challans as argued by Ld. Counsel for the plaintiff nor any such plea was taken in the leave to defend. In any case the defendant has not been able to give any reason for exchanging Whatsapp messages admitting the liability.
19. In view of above discussion and the clear law laid down by Hon'ble Courts cited hereinabove the suit is maintainable on the basis of invoices; the defendant has failed to give any triable issue; the debit notes being relied upon by her do not provide any details, which could be considered as reliable; the defendant has not been able to point out as to which invoice specifically is it challenging; in none of the debit notes except one, the details of bills/products in respect of which defendant has any objection, has been pointed out specifically. Although even if this debit note is doubtful, however, the same being for an amount of Rs.4,612/- that amount can be deducted.
20. In so far the issue of territorial jurisdiction is concerned the plaintiff has claimed that the bills were CS (COMM) 240/23 Page 15 of 17 M/s. Chrysalis Creation Through Its Proprietor Ms.Rashmi Bharatiya Vs. MSD Fabrics A Proprietorship Firm Through Its Proprietor Defendant no.2. raised at Delhi. The supply of goods was made from the Malviya Nagar address of the plaintiff. It is written in the invoices that all disputes shall be subject to Delhi jurisdiction. Reliance placed on M/s. Agroha and Anr. Vs. M/s.Klj Pollyalloys, 2012 SCC Online Del 5859. Hon'ble Delhi High Court in 2023 SCC Online 593 TKW Management Solution Pvt. Ltd. Sherif Cargo and Anr., held that the doctrine of 'the debtor must seek creditor' could be invoked in the matter. In the instant matter also since the plaintiff is based in Malviya Nagar Delhi the doctrine can be used for invoking the jurisdiction of this court. The Defendants have not been able to raise much defence on the ground of territorial jurisdiction.
21. The Application u/o XXXVII rule 3 CPC filed by defendants seeking leave to defend in view of above is dismissed.
22. As per Order XXXVII CPC Rule 3 (6) clause (a)- if the leave to defend application made by defendant is refused, the plaintiff becomes entitled to judgment forthwith. That being the law, the plaintiff is entitled for judgment since the application under order XXXVII Rule 3 (5) CPC seeking leave to defend has been dismissed by the Court today.
23. I decree the suit filed by the plaintiff against the defendant no.2 under Order XXXVII CPC, directing the CS (COMM) 240/23 Page 16 of 17 M/s. Chrysalis Creation Through Its Proprietor Ms.Rashmi Bharatiya Vs. MSD Fabrics A Proprietorship Firm Through Its Proprietor Defendant no.2. defendant no.2 to pay an amount of Rs.1,06,39,290/- (Rs.1,06,43,902/-minus Rs.4,612/-) along with interest @ 9% per annum from the date of filing of suit till realization. Suit accordingly stands decreed in favour of the plaintiff and against defendant no.2 with cost. Decree sheet be prepared accordingly. File be consigned to Record Room.
(ANURADHA SHUKLA BHARDWAJ) District Judge (Commercial Court)-02 South, Saket/Delhi.
Announced in the open court
Digitally signed
on 24.10.2024 by anuradha
anuradha shukla
Date:
shukla 2024.10.24
16:42:53
+0530
CS (COMM) 240/23 Page 17 of 17 M/s. Chrysalis Creation Through Its Proprietor
Ms.Rashmi Bharatiya Vs. MSD Fabrics A Proprietorship Firm Through Its Proprietor Defendant no.2.