Delhi District Court
M/S Eastman Auto And Power Ltd vs M/S Green Kaiketsu Automotive India Pvt ... on 10 May, 2024
BEFORE THE COURT OF SH. SURINDER S. RATHI, DISTRICT JUDGE
(COMM.)-03 SHAHDARA, KARKARDOOMA, DELHI.
CS Comm. No.143/2023
Eastman Auto and Power Ltd.
Flat No.-101, Ist Floor,
Naraina Industrial Area, Phase-I,
New Delhi -110028
Also At:
Plot No. 572, Udyog Vihar Phase-V
Gurugram, Haryana-122016 .......Plaintiff
Vs.
M/s Green Kaiketsu Automotive India Pvt. Ltd.
245, Plot No. P2, KH No. 771/523,
Durga Puri Extension, Shahdara,
New Delhi -110093 .......Defendant
Date of Institution : 21.03.2023
Date of Final Arguments : 10.05.2024
Date of Judgment : 10.05.2024
Decision : Decreed
Judgment
1. This suit is filed by plaintiff company for recovery of Rs.10,14,972/-
alongwith interest @18% per annum qua unpaid debit balance of
goods sold.
Case of the Plaintiff
2. Case of the plaintiff as per plaint and the documents filed that it is a
duly incorporated public limited company and has instituted this suit
with above prayer through their Authorised Representative. Plaintiff is
CS Comm. No.143/2023
Eastman Auto and Power Ltd. Vs. M/s Green Kaiketsu Automotive India Pvt. Ltd. Page 1 of 35
in the business of providing batteries and solar energy equipments.
Defendant is also said to be a duly incorporated private limited
company which is in the business of manufacturing and selling e-
rickshaws. During the course of business defendant used to purchase
e-Rickshaw Batteries from the plaintiff by placing orders. Goods were
supplied through invoices as per orders received. Plaintiff used to
maintain a running account wherein part payments made by defendant
were duly entered. Sales were made by way of various invoices
between 04.01.2017 to 26.09.2017 which cumulatively amounts to
Rs.13,74,720/-. Out of the same defendant paid only Rs.8,76,020/-
leaving a debit balance of Rs.4,98,700/-. These dues were not cleared
even though numerous emails and communications were sent between
09.01.2018 and 02.04.2019. It is pleaded that vide his email dated
27.11.2018 defendant has not disputed the above dues while flagging
his concern qua replacement of some batteries under warranty even
though there were no issues with the quality of the goods supplied.
3. Plaintiff was constrained to issue legal notice dated 19.08.2020 which
was neither replied nor complied. Plaintiff approached Shahdara
DLSA on 08.04.2021 for Pre-Institution Mediation under Section 12A
of Commercial Courts Act, 2015. However, a Non-Starter Report was
issued on 13.09.2021 mentioning that the applicant plaintiff did not
pay up the mediation fees whereas respondent/defendant paid their
part of the fees.
4. Armed with this Non-Starter Report a suit with the same case titled i.e. Eastman Auto and Power Ltd. Vs. Green Kaiketsu Automotive India Private Ltd. as CS (Comm.) No. 408/2022 was filed but the same was rejected by this Court on 09.01.2023 while flagging that the plaintiff CS Comm. No.143/2023 Eastman Auto and Power Ltd. Vs. M/s Green Kaiketsu Automotive India Pvt. Ltd. Page 2 of 35 has not complied the mandatory Pre-Institution Mediation and the same failed simply because the plaintiff company did not pay up the mediation fees.
5. Court is apprised that plaintiff approached Shahdara DLSA for Pre- Institution Mediation under Section 12A of Commercial Courts Act, 2015 for the second time vide their application dated 22.02.2023 where defendant appeared but refused to participate in the process. Consequently second Non-Starter Report was issued on 20.02.2023. Thereafter, fresh suit was filed on 06.03.2023 with following prayers:
Prayer:
i. Pass a money decree in favour of plaintiff company and against the defend-
ants for the recovery of Rs.10,14,972/- on account of the payment due to the Plaintiff by the Defendants against the invoices raised by the Plaintiff and mentioned in the suit along with pendente lite interest @18% p.a.; ii. Award pendente lite and future interest @18% per annum on the aforesaid amount claimed vide prayer (a), from the date of institution of the suit till realization;
iii. Pass any other order or further order (s) as this Hon'ble Court may deem fit and proper as per the facts and circumstances of the present case.
6. During the course of trial the plaint was amended by the plaintiff under orders of the Court dated 04.12.2023 whereunder plaintiff was allowed to seek relief of pre-suit interest which was not sought in the main suit out of inadvertance and oversight. As such the suit amount swelled from Rs.4,98,700/- to Rs.10,14,972/-.
7. Summons of the suit was issued to the defendant and defendant was served on 21.07.2023. Defendant entered appearance through their counsel Sh. Manmohan Tiwari, Advocate on 14.08.2023 followed by filing of detailed Written Statement alongwith Order 7 Rule 11 CPC application on 19.08.2023. While hearing the Order 7 Rule 11 CPC application of the defendant that the suit is barred by limitation, an CS Comm. No.143/2023 Eastman Auto and Power Ltd. Vs. M/s Green Kaiketsu Automotive India Pvt. Ltd. Page 3 of 35 issue was dedicated on the objection of limitation. Defendant's case
8. Case of the defendant company as per WS is that the suit deserves to be dismissed being barred by limitation since the cause of action arose in 2017 but the plaintiff approached Shahdara DLSA for Pre- Institution Mediation on 08.04.2021. It is pleaded that the suit is time barred even if benefit under Hon'ble Supreme Court's WP (C) No. 3/2020 was granted. Dismissal of the suit was also prayed on the ground that plaintiff approached this Court with unclean hands and material facts were suppressed.
9. It is pleaded that the goods supplied by the plaintiff company vide invoices dated 08.08.2017 and 26.09.2017 were of inferior quality. It is pleaded that goods worth Rs.5 lakhs were not only defective but also non-usable and were supposed to be returned. It is pleaded that the goods were not accepted by the plaintiff despite repeated requests and the payments already made by the defendant in advance were also not returned.
10.It is defendant's case that these batteries are lying in the garbage and for this reason the defendant stopped making payments to the plaintiff as well as doing business with the plaintiff. When the goods were not taken back by the plaintiff the defendant was constrained to sell the same to a Kabadi as garbage. It is pleaded that defendant did not do business with the plaintiff after 26.09.2017.
11.In its reply to the plaint on merits, the defendant company did not dispute the fact that plaintiff company is renowned for providing superior quality batteries. It is also admitted that defendant is manufacturer of e-rickshaw and used to purchase batteries from the CS Comm. No.143/2023 Eastman Auto and Power Ltd. Vs. M/s Green Kaiketsu Automotive India Pvt. Ltd. Page 4 of 35 plaintiff by purchasing orders. Defendant admits doing business with the plaintiff but claimed that it is the plaintiff who approached the defendant for sale of batteries. Defendant deny assuring the plaintiff that they will make 100% upfront payment against the invoices for supply of goods.
12.In its affidavit of admission and denial to plaintiff's documents defendant has denied the invoices, ledger and legal notice of the plaintiff. However, these are bald denials which are not in consonance with Order 11 Rule 4 (3) CPC as no reason for denial is cited. Replication
13.Separate replication was filed by plaintiff wherein it reiterated its pleaded case and denied the assertion of the defendant qua supply of inferior quality batteries.
14.Upon completion of pleadings following issues were identified by this Court on 16.10.2023:
Issues:
i. Whether suit of the plaintiff is within limitation? OP Parties ii. Whether the plaintiff is entitled for recovery of Rs.10,14,972/- along with pendente lite and future interest @18% p.a.? OPP iii. Relief.
15.Evidence in this case was ordered to be recorded before Ld. LC Sh. Musheer Khan, Advocate as per following protocol created by this Court under Order 18 Rule 4 CPC read with Order 15A Rule 6(l) and
(o) CPC as applicable to Commercial suits.
"Protocol for Recording of Evidence before Court Commissioner appointed by District Judge, Commercial Court, 2022"
Part - 1 Preliminary CS Comm. No.143/2023 Eastman Auto and Power Ltd. Vs. M/s Green Kaiketsu Automotive India Pvt. Ltd. Page 5 of 35
1. Short title- This Protocol is titled "Protocol for Recording of Evidence before Court Commissioner appointed by District Judge Commercial Court 2022."
2. Statutory Provision- This protocol is prepared as per Order 18 Rule 4 CPC and Order 15A Rule 6(l) CPC as applicable to Commercial Court.
3. Court- Whenever the term 'Court' appears in this Protocol it should refer to Commercial Court as defined under Section 2(b) of Commercial Court Act 2015.
Part - 2 Preparation for Assignment
4. Recording of evidence in Commercial Cases- Recording of evidence in Commercial Cases may be carried out before the Court Commissioner.
Explanation: For reasons to be recorded, Court may retain the case for recording of evidence before the Court.
5. Appointment of Court Commissioner- As per the Protocol, on the first Case Management Hearing when the issues are identified, the Court may pass an order for appointment of Court Commissioner.
6. Copy of order be shared with parties and Court Commissioner- Copy of the order of framing of issues, appointment of Court Commissioner and the schedule of recording of evidence shall be supplied to the parties as well as the Court Commissioner.
Part - 3 Recording of Evidence
7. Filing of list of witnesses- Both sides shall file list of witnesses preferably within one week but not later than 15 days of identification of issues before the Court while sharing an advanced copy thereof with the opposite party.
8. Order of assignment of Case to the Court Commissioner- While assigning the case, following aspects shall be complied :
i. Schedule of evidence- Recording of evidence shall start within two weeks of identification of issues. Evidence shall continue on day to day basis, till conclusion. Any alteration in schedule for recording of evidence, if needed, shall be decided by the Court Commissioner as per convenience of all concerned, as far as possible. However, entire evidence shall be concluded within Eight weeks of initiation.
ii. Judicial File- Judicial file shall not be sent or summoned for the purpose of recording of evidence by the Court Commissioner.
iii. Examination-in-Chief- An advance copy of examination in chief by way of affidavit shall be supplied to opposite party preferably one week in advance. However, no adjournment shall be granted in case of non-supply of advance copy. iv. Production of documents for cross-examination- In case the opposite side is desirous of production of any document by the witness or any other entity for the purpose of cross- examination, an application requesting the same shall be moved well in advance before the Court.
Part - 4 Duty of Court Commissioner CS Comm. No.143/2023 Eastman Auto and Power Ltd. Vs. M/s Green Kaiketsu Automotive India Pvt. Ltd. Page 6 of 35
9. Recording of evidence by the Court Commissioner- i. Place and Time- Court Commissioner shall record evidence either in Lawyer's chamber, or Judges/Bar Library, Court Room or any other public place within the Court Complex as mutually agreed by all concerned. Evidence shall be recorded between 10.00 AM to 5.00 PM. It can carry on beyond 5.00 PM as well in case both parties agree. It can be recorded even on a holiday if all the stakeholders are comfortable and agree to the same. ii. Chronology of recording- Court Commissioner shall proceed to record the examination by first recording the deposition of litigating party before examining additional summoned witnesses.
iii. Oath to witnesses- Court Commissioner shall administer oath to the witnesses under examination as a delegatee of the Court as per Oaths Act, 1969. iv. Recording of evidence- The evidence shall be preferably typed on a computer but can also be recorded by hand neatly.
v. Time frame- Court Commissioner shall conclude the recording of evidence, as early as possible, but not later than eight weeks of assignment of a case. In case, for any reason the parties are unable to adhere to the time schedule, extension can be sought from the Court. vi. Comfortable sitting space- Witnesses and their Counsel shall be provided comfortable sitting space by the Court Commissioner.
vii. Exhibition of documents- Court Commissioner shall exhibit all the documents sought to be proved by a party on record. In case of any objection to exhibition of the documents by either side, the objection shall be recorded in some detail and left open with an assurance that mere marking of such exhibits will not be treated as conclusive proof thereof and that admissibility of such document shall be decided by the referral Court at final stage. viii. Original documents to be retained by parties- Court Commissioner shall make an observation in the record of evidence of all original documents produced and shall sign the exhibits with an endorsement OSR (original seen and returned) wherever necessary. If a party has filed original documents alongwith pleadings in Court, the same can be taken back as per rules for the purpose of recording of evidence before the Court Commissioner. Original documents be submitted with the Court at the time of final arguments. ix. Language- Recording of evidence shall preferably be carried out in English or Court language, as the case may be, unless requested by the parties otherwise. x. Adjournments- Once started, the cross-examination shall preferably concluded on the same day or continue on day-to-day basis. In case of any hardship viz. ill health etc. the case can be deferred but preferably for a day or two but not later than a week.
In case an evidence schedule is fixed and adjournment is sought by the opposite side, i.e the side other than who is leading evidence, without 24 hour advance notice.
Explanation: In case a witness scheduled to be examined or under examination is reported to be unwell or unavailable, the party leading the evidence shall produce the next witness in line in the list for recording of evidence.
xi. Recording of objections- All the objections raised during cross-examination/reexamination shall be recorded in the deposition under title objections and shall be left open for the decision of the Court at the stage of final arguments. Witness shall not refuse to answer the question asked.
CS Comm. No.143/2023 Eastman Auto and Power Ltd. Vs. M/s Green Kaiketsu Automotive India Pvt. Ltd. Page 7 of 35xii. Questions to be allowed- In case Court Commissioner finds any question not related to the fact and issue, he shall record his objection but shall allow the question to be put and witness must answer.
xiii. No third person intervention- Court Commissioner shall ensure that the witness is not assisted by his Counsel or any other person while under examination in answering the questions.
xiv. Recording of demeanour of witness- Court Commissioner shall record the demeanour of the witness wherever it is found pertinent and necessary for sharing with the Court. xv. Copy of evidence- All parties shall be provided uncertified electronic/hard copy of the evidence recorded, free of cost by Court Commissioner. xvi. Safe keeping of original deposition- Court Commissioner shall keep the original depositions in his safe custody till such time they are filed in the Court in original upon completion of each witness individually.
xvii. Miscellaneous proceedings- Court Commissioner shall maintain a miscellaneous proceeding sheet for each day of work and shall submit it in the Court at the time of submission of final report.
xviii. Hostile Witness- In case a witness is sought to be declared hostile, then Court Commissioner shall refer both the parties to Court at the earliest and the Court shall decide the issue within three days.
Part - 5 Miscellaneous
10. Summoning of Witness-
i. Summons from Court- In case a litigating party is desirous of summoning a person for deposition or production of documents, it shall obtain summons from the Court with an endorsement that such person shall appear before the address of Court Commissioner on scheduled date, time and place.
ii. Diet Money- Diet money shall be paid to such witness by the party desirous of summoning as per rules.
11. Advisory to Court Commissioner- While recording the evidence on commission, the Court Commissioner shall ensure the following:
i. Impartial- Court Commissioner shall conduct himself in an impartial way and behave in an indiscriminate manner while recording of evidence. ii. Polite- Court Commissioner shall be polite with the witness and other stakeholders while recording of evidence.
iii. Confidentiality- Court Commissioner shall maintain confidentiality during the whole process.
iv. Keeping professional distance- Court Commissioner shall not solicit professional work from the parties.
v. Integrity- Court Commissioner shall not accept remuneration or any favour in cash or kind from the parties over and above the honorarium fixed by the Court. vi. Non-judgmental- Court Commissioner shall not criticize the professional conduct of lawyers and litigating parties on their understanding of law. vii. Punctuality- Court Commissioner shall adhere to time schedules and shall not make excuses like being engaged in some personal or Court work etc. CS Comm. No.143/2023 Eastman Auto and Power Ltd. Vs. M/s Green Kaiketsu Automotive India Pvt. Ltd. Page 8 of 35 viii. Coordination- In case of any unforeseen circumstances warranting change of dates of hearing, for his own case or the request of other side, he shall apprise the other side in advance via phone call, email, SMS, Whatsapp Group etc.. ix. No third party sharing- Court Commissioner shall not allow the deposition to be inspected by any third party and shall not share a copy thereof with any stranger without permission of the Court.
x. Inspection- Court Commissioner shall allow any party to inspect the recorded proceedings only in his presence.
xi. Recusal- In case either of the parties or Counsel for the parties are related or closely known to Court Commissioner, he/she shall recuse self from the case and inform the referral Court.
12. Remuneration of Court Commissioner -
i. Remuneration- In terms of Order 18 Rule 4 of the Code read with Order 15 Rule 2(l) and Rule 2(o) of the Code, Court Commissioner shall be paid remuneration for the work carried out.
ii. Mode of payment- Such remuneration shall be paid by the party directly for the work carried out by way of cash, UPI, Bank Transfer, cheque or draft against due receipt. iii. Cost to parties- Each party shall individually bear the cost incurred in leading its evidence.
iv. Fee to be paid- Remuneration fee for recording of evidence is fixed at Rs.2,000/- per witness or Rs.2,000/- per hour whichever is more. Court Commissioner shall record the Evidence himself and in case the Stenographer services are taken it can either be arranged by a litigating party on its own cost or in case the same is arranged by Court Commissioner, then the actual cost of typing shall be reimbursed by the party to the Court Commissioner.
v. Litigation Cost- Expenditure incurred in recording of evidence shall be redeemable as cost of litigation at the end of the suit.
13. Judicial Intervention during recording of evidence-
i. Parties to cooperate- It is expected that both the sides will cooperate with Court Commissioner as well as with each other in recording of evidence and carry out proceedings in a cordial manner.
ii. Dissolution of hindrances- In case of any conflict resulting into hindrance recording of evidence, it shall be resolved amicably by the parties at their own level with the active help of the Court Commissioner.
iii. Court intervention- However, in case of any unforeseen situation requiring judicial intervention, Court Commissioner shall fix date and time for joint appearance of both sides before the Court for removal of any such impediment.
14. Miscellaneous Applications-
i. Moving the application- In case either of the parties is desirous of moving any miscellaneous application viz. amending of pleadings, interim injunction etc. it shall share an advance copy with the opposite side and reply thereof, if any, shall be filed and shared within seven days.
ii. Date of hearing- Upon receipt of reply, both the sides shall get the application fixed for disposal in the Court with the help of Reader of the Court and shall not wait till next date fixed for hearing. All such miscellaneous applications shall be registered, numbered and indexed separately.
CS Comm. No.143/2023 Eastman Auto and Power Ltd. Vs. M/s Green Kaiketsu Automotive India Pvt. Ltd. Page 9 of 35iii. Evidence not to be stalled- It is clarified that, unless Court Commissioner is of the view that the interim application moved by either of the parties is such that evidence cannot be recorded before its disposal, the recording of PE/DE shall continue unabatedly.
Plaintiff's Evidence
16.To prove its case plaintiff company examined PW1 Om Prakash Singh, its AR. Vide his affidavit Ex.PW1/A he deposed on the lines of plaint and exhibited following documents:
i. Board resolution dated 15.10.2019 is Ex.PW1/1; ii. MCA Data taken from the official website of Ministry of Corporate Affairs is Ex.PW1/2;
iii. Invoices nos. DLH/D1/1717/83 and DLH/D1/1718/184 are Ex.PW1/3 and Ex.PW1/4;
iv. Ledger of defendant no. 1 company maintained by the plaintiff is Ex.PW1/5; v. Email communications between the plaintiff and the defendant are Ex.PW1/6(colly.);
vi. Copy of Legal demand notice dated 19.08.2020, copy of speed post receipts and tracking report are Mark A(colly.);
vii. Copy of Non-Starter Report dated 13.09.2021 is Mark B; viii.Copy of judgment/order dated 09.01.2023 is Mark C; ix. Original Non-Starter Report dated 20.02.2021 is Ex.PW1/7;
17.He was cross-examined by Ld. Counsel for defendant Sh. V K Upadhyay, Advocate. On being asked he could not disclose the mutally agreed terms of business between the parties. The witness also could not disclose the number of orders placed by defendant to the plaintiff. He accepted that the last purchase made by defendant was in September 2017. The invoices were supposed to be paid in 30 days. PW1 had no knowledge of taking back the defective batteries. He denied that batteries supplied were defective. He denied that defendant requested the plaintiff to take defective batteries worth Rs. 5 lakhs back.
Defendant's Evidence
18.On the other hand, examined DW1 Pawan Kumar Gupta, its Director CS Comm. No.143/2023 Eastman Auto and Power Ltd. Vs. M/s Green Kaiketsu Automotive India Pvt. Ltd. Page 10 of 35 and AR. Vide his affidavit Ex.DW1/A he deposed on the lines of WS and exhibited following documents:
i. Original company master data is Ex.DW1/1;
ii. Original GST Registration Certificate dated 03.09.2021 is Ex.DW1/2 (colly.) iii. Certificate of incorporation dated 04.08.2015 is Ex.DW1/3;
19.In his cross-examination he stated that he is Director of defendant company since 26.02.2020. He expressed unawareness about claiming GST inputs. He accepted that he has no personal knowledge regarding dealing between the plaintiff and defendant company and his knowledge is based on documents as well as facts shared by previous Director Vijay Sharma. In reply to question put by plaintiff DW1 conceded that there is outstanding payment of Rs.5 lakhs payable by Defendant to the plaintiff out of Rs. 19 lakhs. He accepted that he has no document to show that the batteries supplied were defective. Final Arguments :
20.I have heard arguments of Sh. Kamal Kumar, Ld. Counsel for plaintiff and Sh. Salil Shekhar, Ld. Counsel for defendant. I have perused the case file carefully.
21.Now I shall dispose of individual issues framed in this case.
Discussion and Findings on Issues:
Issue No. 1Whether suit of the plaintiff is within limitation? OPParties
22.The aspect of limitation shall be discussed under following heads:-
i. Factual matrix related to issue of limitation. ii. Implication of Hon'ble Supreme Court's Covid related CS Comm. No.143/2023 Eastman Auto and Power Ltd. Vs. M/s Green Kaiketsu Automotive India Pvt. Ltd. Page 11 of 35 freeze on limitation in Re: Cognizance For Extension of Limitation" Suo Motu Writ Petition (C) No.3 of 2020. iii. Entitlement of plaintiff for exclusion of period spent in earlier suit CS (Comm.) No. 408/2022 as per Section 14 of Limitation Act.
iv. Whether plaintiff is entitled to benefit of Section 19 Limitation Act qua part payment of Rs.2 lakhs made by defendant on 09.07.2019?
Factual matrix related to issue of limitation:
23.The facts admitted by both the parties, as borne out of pleadings and the documents, as per oral orders placed by the defendant, plaintiff carried out sale of e-rickshaw batteries to the defendant through four invoices. Details of only two invoices are mentioned in the plaint as exhibit Ex.PW1/3 and Ex.PW1/4 dated 08.08.2017 and 26.09.2017 respectively.
24.Out of the other two invoices the first invoice dated 04.01.2017 is said to be a nil invoice issued qua the samples sent while the other one dated 27.02.2017 was for Rs.6,23,210/-, an amount which already stands paid by the defendant. Total payment made by the defendant to the plaintiff iss Rs.8,76,020/-.
25.Admittedly, there was no separate standalone contract or MoU of any regular sale/supply of Batteries and all these sales were carried out through random invoices except the fact that plaintiff was maintaining a ledger of account of sales made and payments received. In so far as the two invoices Ex.PW1/3 and Ex.PW1/4, carry an endorsement that "credit period is of 30 days", the relevant Article of Schedule attached to Limitation Act is Article 15 which provides that the period of CS Comm. No.143/2023 Eastman Auto and Power Ltd. Vs. M/s Green Kaiketsu Automotive India Pvt. Ltd. Page 12 of 35 limitation in such cases would start when the credit period expires. For ready reference Article 15 is reproduced hereunder:
Article Description of suit Period of Time from which period Limitation begins to run 15 For the price of goods sold and Three Years When the period of credit delivered to be paid for after the expires.
expiry of a fixed period of credit.
26.Applying the above law on the above two invoices the period of three years of limitation under the law started qua the two bills dated 08.08.2017 and 26.09.2017 on 07.09.2017 and 26.10.2017 respectively. By implication of law the three years period qua these bills expires on 07.09.2020 and 26.10.2020 respectively. Admittedly, the suit in hand was not filed on or by either of these dates because Covid related freeze started on 15.03.2020 in District Courts.
Implication of Hon'ble Supreme Court's freeze on limitation in Re:
Cognizance For Extension of Limitation" Suo Motu Writ Petition (C) No.3 of 2020:
27.The country was gripped by the Covid Pandemic in early 2020, Hon'ble Supreme Court "In Re: Cognizance For Extension of Limitation" Suo Motu Writ Petition (C) No.3 of 2020" in vide judgment dated 10.01.2022 ordered for exclusion of period between 15.03.2020 to 28.02.2022 and held that:
"5. Taking into consideration the arguments advanced by learned counsel and the impact of the surge of the virus on public health and adversities faced by litigants in the prevailing conditions, we deem it appropriate to dispose of the M.A. No. 21 of 2022 with the following directions:
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 CS Comm. No.143/2023 Eastman Auto and Power Ltd. Vs. M/s Green Kaiketsu Automotive India Pvt. Ltd. Page 13 of 35 respect of all judicial or quasi judicial proceedings. II. Consequently, the balance period of limitation remaining as on 03.10.2021, if any, shall become available with effect from 01.03.2022. III. In cases where the limitation would have expired during the period between 15.03.2020 till 28.02.2022, notwithstanding the actual balance period of limitation remaining, all persons shall have a limitation period of 90 days from 01.03.2022. In the event the actual balance period of limitation remaining, with effect from 01.03.2022 is greater than 90 days, that longer period shall apply.
IV. It is further clarified that the period from 15.03.2020 till 28.02.2022 shall also stand excluded in computing the periods prescribed under Sections 23 (4) and 29A of the Arbitration and Conciliation Act, 1996, Section 12A of the Commercial Courts Act, 2015 and provisos (b) and (c) of Section 138 of the Negotiable Instruments Act, 1881 and any other laws, which prescribe period(s) of limitation for instituting proceedings, outer limits (within which the court or tribunal can condone delay) and termination of proceedings."
(Emphasis Supplied)
28.Vide this judgment the relief of freeze on limitation was granted to the litigants like the plaintiff in hand from dates 15.03.2020 to 28.02.2022. In this regard it is vehemently argued by Ld. Counsel for the defendant that in so far the limitation qua the two invoices expired on 07.09.2020 and 26.10.2020 respectively and both these dates fall within the window created by Hon'ble Supreme Court i.e. 15.03.2020 and 28.02.2022, the plaintiff was supposed to file the initial suit bearing no. CS (Comm.) 408/2022 within 90 days of 28.02.2022 i.e. on or by 29.05.2022. Ld. Counsel for defendant has laid stress on para 5 (iii) of order of Hon'ble Supreme Court dated 10.01.2022, as reproduced supra, to show that it is ruled by the Three-Judge Apex Court Bench that all the cases whose limitation expired between 15.03.2020 to 28.02.2022 shall have limitation period of only 90 days from 01.03.2022 onwards unmindful of the actual balance period of limitation remaining with them.
29.In support of this plea Ld. Counsel for defendant has relied on case CS Comm. No.143/2023 Eastman Auto and Power Ltd. Vs. M/s Green Kaiketsu Automotive India Pvt. Ltd. Page 14 of 35 titled Dr. Reddys Laboratories Limited Vs. Controller General of Patents Designs and Trademarks, 2022 SCC Online Delhi 813 wherein in para 18.4 the Single Judge of Hon'ble High Court of Delhi is shown to have interpreted that in a case where limitation expired after 15.03.2020, the litigant would have only 90 days period starting from 01.03.2022.
30.Ld. Counsel for defendant has also relied on Prakash Corporates Vs. Dee Vee Projects Limited, (2022) 5 SCC 112 wherein at para 28.2 Two-Judge Bench of Hon'ble Supreme Court ruled that the 90 days additional period granted to plaintiff for institution of the suit would also be applicable to defendants' filing written statements in case it is found that the limitation to file WS expired between dates 15.03.2020 to 28.02.2022.
31.However, these two judgments are of no avail to the defendant not only because they do not discuss the interpretation and implication of Three-Judge judgment qua freezing of limitation but they simply reiterate that every litigant got at least 90 additional days w.e.f. 01.03.2022 onwards. The submissions of Ld. Counsel for defendant are based on misplaced understanding of the para 5 (iii) because it does not take into consideration the clear cut directive in para 5 (i) where it is ruled that, "The period from 15.03.2020 till 28.02.2022 shall stand excluded for the purposes of limitation".
32.When these words are read with following words appearing in para 5
(iii), "in the event the actual balance period of limitation remaining, w.e.f. 01.03.2022 is greater than 90 days, then longer period shall apply." When read in conjunction with each other it is evident that there is en bloc exclusion of period between 15.03.2020 to 28.02.2022 CS Comm. No.143/2023 Eastman Auto and Power Ltd. Vs. M/s Green Kaiketsu Automotive India Pvt. Ltd. Page 15 of 35 which is roughly around one year 11 months and 15 days. If the interpretation being sought to be put forth by Ld. Counsel for defendant is accepted then a plaintiff whose cause of action arose on 15.03.2018 limitation of which should have ordinarily expired on 15.03.2021 too would get only 90 days from 01.03.2022 to 29.05.2022 even though as on 15.03.2020 when the freeze of limitation was started he had clear one year of limitation left with him.
33.This aspect is clarified by Hon'ble Supreme Court in case titled Arif Azim Co. Ltd. Vs. Aptech Ltd., 2024 Latest Caselaw 128 SC Hon'ble Supreme Court ruled that, "82. Thus, in ordinary circumstances, the limitation period available to the petitioner for raising a claim would have come to an end after an expiry of three years, that is, on 27.03.2021. However, in March 2020, the entire world was taken under the grip of the deadly Covid-19 pandemic bringing everyday life and commercial activity to a complete halt across the globe. Taking cognisance of this unfortunate turn of events, this Court vide order dated 23.03.2020 passed in Suo Motu Civil Writ Petition No. 03/2020 directed the period commencing from 15.03.2020 to be excluded for the purposes of computation of limitation.
The said extension of limitation was extended from time to time by this Court in view of the continuing pandemic. As a result, the period from 15.03.2020 to 28.02.2022 was finally determined to be excluded for the computation of limitation. It was provided that the balance period of limitation as available on 15.03.2020 would become available from 01.03.2022. Operative part of the order dated 10.01.2022 is extracted hereinbelow:...............
84. The effect of the above-referred order of this Court in the facts of the present case is that the balance limitation left on 15.03.2020 would become available w.e.f. 01.03.2022. The balance period of limitation remaining on 15.03.2020 can be calculated by computing the number of days between 15.03.2020 and 27.03.2021, which is the day when the limitation period would have come to an end under ordinary circumstances. The balance period thus comes to 1 year 13 days. This period of 1 year 13 days becomes available to the petitioner from 01.03.2022, thereby meaning that the limitation period available to the petitioner for invoking arbitration proceedings would have come to an end on 13.03.2023."
(Emphasis Supplied) CS Comm. No.143/2023 Eastman Auto and Power Ltd. Vs. M/s Green Kaiketsu Automotive India Pvt. Ltd. Page 16 of 35
34.This judgment has been followed by Hon'ble High Court in a recent judgment passed on 01.05.2024 in case titled Chroma-Ator Energy Systems Pvt. Ltd. Vs. Indraprastha Gas Ltd., 2024 Latest Caselaw 869 Del wherein in an arbitration matter notice under Section 21 of Arbitration Act was issued on 04.11.2022 while petition under Section 11 (6) of the Act was filed on 01.03.2024. While referring to the above judgment of Arif Azim Vs. Aptech Ltd. Hon'ble High Court ruled, "11. Applying the interpretation set out above, since limitation in this case expired on 7th November 2021, firstly, the period of limitation between 15 th March 2020 and 7th November, 2021 would stand excluded. The recommencement of the limitation period would be from Ist March, 2022.
12. Thus, the invocation of arbitration on 4 th November 2022, would not be barred by limitation, rendering the present arbitration petition under Section 11(6) of the Act to be within limitation period under Article 137 of the Limitation Act, 1963."
35.As such in view of the above, the plaintiff deserves full exclusion of period between 15.03.2020 to 28.02.2022.
36.It is revealed from the record that plaintiff approached Shahdara DLSA for Pre-Institution Mediation twice under Section 12A of Commercial Courts Act, 2015. For the first time plaintiff approached DLSA on 08.04.2021 and the proceedings continued up to 13.09.2021. Finally, on 13.09.2021 the mediation proceedings were dropped on the ground that the applicant i.e. plaintiff company in hand did not deposit their part of the Mediation fees even though the respondent company deposited its part. Rule 11 of Pre-Institution Mediation and Settlement (PIMS) Rules, 2018 provides as under:
"Rule 11 of PIMS Rules, 2018: Mediation Fee.-
"Before the commencement of the mediation, the parties to the commercial dispute shall pay to the Authority a one-time mediation fee, to be shared equally, as per the quantum of claim as specified in Schedule II."CS Comm. No.143/2023 Eastman Auto and Power Ltd. Vs. M/s Green Kaiketsu Automotive India Pvt. Ltd. Page 17 of 35
37.In this regard a submission is made by Ld. Counsel for plaintiff that he did pay mediation fees as per PIMS Rules and SOP of DLSA but admittedly no fee was paid on or by 13.09.2021 when the Non-Starter report was issued. Rather the fee is claimed to have been deposited on 11.10.2021 when no Pre-Institution Mediation proceedings were pending before Shahdara DLSA.
38.Record reveals that initially plaintiff filed a suit having CS (Comm.) No.408/2022 before this Court itself on the basis of above Non-Starter Report dated 13.09.2021 but the suit was rejected by this Court on 09.01.2023 in terms of various judgments of Hon'ble High Court of Delhi which have already ruled that strict compliance of Section 12A of Commercial Courts Act, 2015 in Delhi is mandatory and not directory.
39.In the same spirit the judgment of Patil Automation Limited Vs. Rakheja Engineering Private Ltd., 2022 Latest Caselaw 645 SC, dated 17.08.2022 of Hon'ble Supreme Court was also passed which mandated compliance of Pre-Institution Mediation from 20.08.2022. Hon'ble Supreme Court specifically clarified that the cut off date is applicable to only those jurisdictions where the only specific High Courts have not ruled Pre-Institution Mediation to be mandatory unlike High Court of Delhi where it was mandatory since the inception of the law. However, the period spent by plaintiff in first Pre-Institution Mediation i.e. 08.04.2021 to 13.09.2021 ordinarily deserves to be excluded as per proviso to Section 12A Sub-Section 3 of Commercial Courts Act, 2015. For ready reference same is reproduced hereunder:
CS Comm. No.143/2023 Eastman Auto and Power Ltd. Vs. M/s Green Kaiketsu Automotive India Pvt. Ltd. Page 18 of 35Section 12A Commercial Courts Act, 2015: Pre-Institution Mediation and Settlement
(l) A suit, which does not contemplate any urgent interim relief under this Act, shall not be instiluted unless the plaintiff exhausts the remedy of pre-
institution mediation in accordance with such manner and procedure as may be prescribed by rules made by the Central Government.
(2) The Central Government may, by notification, authorise the Authorities constituted under the Legal Services Authorities Act. 1987, for the purposes of pre institution mediation.
(3) Notwithstanding anything contained in the Legal Services Authorities Act, 1987, the Authority authorised by the Central Government under sub-section (2) shall complete the process of mediation within a period of three months from the date of application made by the plaintiff under sub-section (l ): 19 of 1987 Provided that the period of mediation may be extended for a further period of two months with the consent of the parties:
Provided further that, the period during which the parties remained occupied with the pre-institution mediation, such period shall not be computed for thc purpose of limitation under the Limilation Act, 1963.
(4) lf the parties to the commercial dispute arrive at a settlement, the same shall be reduced into writing and shall be signed by the parties to the dispute and the mediator.
(5)The settlement arrived at under this section shall have 26 or 1996 the same status and effect as if it is an arbitral award on agreed terms under sub-sec-
tion(4) of section 30 of the Arbitration and Conciliation Act, 1996."*
40.But in the case in hand this period of 08.04.2021 to 13.09.2021 squarely falls within the Hon'ble Supreme Court's window on freeze of limitation from 15.03.2020 to 28.02.2022, which is already excluded, so no additional benefit can be accorded to plaintiff in this regard.
41.Record reveals that the initial suit bearing no. CS (Comm.) 408/2022 was filed on 18.05.2022 and hence plaintiff had utilised 2 months and 17 days leaving a balance limitation period of 3 months 6 days and 4 months 24 days qua the third and fourth invoice respectively. The earlier suit filed by the plaintiff on 18.05.2022 was rejected by this CS Comm. No.143/2023 Eastman Auto and Power Ltd. Vs. M/s Green Kaiketsu Automotive India Pvt. Ltd. Page 19 of 35 Court on 09.01.2023. As per record upon rejection of the earlier plaint on 09.01.2023 plaintiff approached Shahdara DLSA for the second time for Pre-Institution Mediation on 02.02.2023 after a gap of 23 days. The time spent in second mediation was from 02.02.2023 to 20.02.2023 (19 days) and the current suit CS (Comm.) No. 143/2023 was e-filed on 06.03.2023 i.e. after a gap of 13 days (21.02.2023 to 05.03.2023) as per document filed at the stage of final arguments in the Court. Thus post rejection of the earlier suit plaintiff utilised One month and 6 days (23+13 days) while plaintiff company had in its kitty two months as per third invoice and 3 months 18 days as per fourth invoice available with them.
42.This table clearly depicting the limitation periods as under:
Description Dates pertaining to Dates pertaining to Third Invoice Fourth Invoice Date of invoice 08.08.2017 26.09.2017 Date of cause of action after expiry of 30 07.09.2017 26.10.2017 days period Limitation period available as on 15.03.2020 5 months 23 days 7 months 11 days (from 15.03.2020 to (from 15.03.2020 to 07.09.2020) 26.10.2020) No. of days utilised prior to filing of earlier 2 months and 17 days suit i.e. 01.03.2022 to 18.05.2022 Balance days of limitation available 3 months 6 days 4 months 24 days Date of filing and rejection of earlier suit 18.05.2022-09.01.2023 bearing no. CS(Comm.) 408/2022 Limitation period utilised before approaching 23 days (from 10.01.2023 to 01.02.2023) Shahdara DLSA for second Pre-Institution Mediation Balance period remaining out of limitation 2 months 13 days 4 months 1 day Time Spent in Shahdara DLSA for second 19 days Pre-Institution Mediation (from 02.02.2023 to 20.02.2023) Time utilised for filing of suit in hand CS 13 days (Comm.) No. 143/2023 on 06.03.2023 (From 21.02.2023 to 05.03.2023) Balance period remaining out of limitation as 2 months 3 months 18 days on 06.03.2023 when the suit was filed CS Comm. No.143/2023 Eastman Auto and Power Ltd. Vs. M/s Green Kaiketsu Automotive India Pvt. Ltd. Page 20 of 35
43.Thus calculating the limitation period left with the plaintiff as on 15.03.2020 according to 3-year limitation dates of 07.09.2020 and 26.10.2020 it is found that the plaintiff company was left with 2 months and 3 months 18 days qua the third and fourth invoices respectively as on the date of filing of second suit i.e. on 06.03.2023. As such, upon calculating the period of limitation on the basis of the above judgments of Hon'ble Supreme Court and High Court this suit appears to be within limitation.
Entitlement of plaintiff for exclusion of period spent in CS (Comm.) No. 408/2022 as per Section 14 of Limitation Act:
44.Plaintiff was found to be entitled to the benefit of Section 14 of Limitation Act qua the time spent by the plaintiff company before this Court from the date of filing of the earlier suit on 18.05.2022 till 09.01.2023 when the same was rejected. As regards the date of filing of the earlier suit is concerned, the earlier plaint revealed that it was received in the Court on 02.07.2022 but it is claimed by Ld. Counsel for plaintiff that it was e-filed on 18.05.2022. Printouts of e-filing by Plaintiff's Counsel show that the same was filed on 18.05.2022.
45.The time spent in second Mediation was from 02.02.2023 to 20.02.2023 and the current suit CS (Comm.) no. 143/2023 was e-filed on 06.03.2023. As per e-filing Rules of Delhi High Court date of e-
filing of a petition is treated as actual filing date irrespective of when the file reaches the Trial Court.
CS Comm. No.143/2023 Eastman Auto and Power Ltd. Vs. M/s Green Kaiketsu Automotive India Pvt. Ltd. Page 21 of 35Section 14 of Limitation Act, 1963: Exclusion of time of proceeding bona fide in Court without jurisdiction (1) In computing the period of limitation for any suit the time during which the plaintiff has been prosecuting with due diligence another civil proceeding, whether in a court of first instance or of the appeal or revision, against the defendant shall be excluded, where the proceeding relates to the same matter in issue and is prosecuted in good faith in a court which, from defect of jurisdiction or other cause of a like nature, is unable to entertain it.
(2) In computing the period of limitation for any application, the time during which the applicant has been prosecuting with due diligence another civil proceeding, whether in a court of first instance or of appeal or revision, against the same party for the same relief shall be excluded, where such proceeding is prosecuted in good faith in a count of first instance or of appeal or revision, against the same party for the same relief shall be excluded, where such proceeding is prosecuted in good faith in a court which, from defect of jurisdiction or other cause of a like nature, is unable to entertain it.
(3) Notwithstanding anything contained in rule 2 of Order XXIII of the Code of Civil Procedure, 1908 (5 of 1908), the provisions of sub-section (1) shall apply in relation to a fresh suit instituted on permission granted by the court under rule of that Order, where such permission is granted on the ground that the first suit must fail by reason of a defect in the jurisdiction of the court of other cause of a like nature.
Explanation - For the purpose of this section, -
(a) In excluding the time during which a former civil proceeding was pending, the day on which that proceeding was instituted and the day on which it ended shall both be counted;
(b) Plaintiff or an applicant resisting an appeal shall be deemed to be prosecuting a proceeding;
(c) Misjoinder of parties or of causes of action shall be deemed to be a cause of a like nature with defect of jurisdiction.
46.At this juncture, a submission is made by Ld. Counsel for defendant that even though in the order of this Court dated 09.01.2023 benefit of Section 14 Limitation Act was granted to the plaintiff after hearing both the sides but it is contended that the relief of Section 14 Limitation Act ought not have been granted to the plaintiff. It is submitted that the detailed order dated 09.01.2023 carries a reference that the initial Section 12A Pre-Institution Mediation initiated by the CS Comm. No.143/2023 Eastman Auto and Power Ltd. Vs. M/s Green Kaiketsu Automotive India Pvt. Ltd. Page 22 of 35 plaintiff ended up with issuance of Non-Starter Report because the plaintiff did not deposit the requisite mediation fees. It is also mentioned that the order refers that the Mediation proceedings were closed within 9 days instead of 90 days.
47.In so far as the order dated 09.01.2023 was passed in the presence of Ld. Counsel for both the sides after detailed discussion and appreciating the fact that initial Pre-Institution Mediation exercise was carried out in 2021 when the Covid-19 pandemic was creating havoc in the country. The fact that the plaintiff initiated the Pre-Institution Mediation on 08.04.2021 and was given the next date of hearing directly of five months i.e. 04.09.2021 can be clearly understood since there was shortage of staff not only with DLSAs but also the Mediators who were attending the DLSAs were scarce in number.
48.The reference of nine days in the previous order evidently pertains to issuance of Non-Starter Report on 13.09.2021 after first hearing. More so when as per plaintiff's submission they were not asked to deposit this money. It is also mentioned that there was no reason as to why a plaintiff would refuse to submit the mediation fees once it is ordered to be deposited. Evidently, the mediation fees was deposited by the plaintiff on 11.10.2021 but by that time, on account of lack of any communication from Shahdara DLSA to the plaintiff, the DLSA ended up issuing Non-Starter Report without waiting for the plaintiff to deposit the fees.
49.Be that as it may, vide order dated 09.10.2023 defendant had succeeded in satisfying the Court that earlier suit of the plaintiff CS (Comm.) No. 408/2022 deserved to be rejected and it was so rejected leading to forfeiture of plaintiff's court fees as well. It is, in this CS Comm. No.143/2023 Eastman Auto and Power Ltd. Vs. M/s Green Kaiketsu Automotive India Pvt. Ltd. Page 23 of 35 backdrop, that after hearing both the sides, the plaintiff was granted benefit of Section 14 of Limitation Act to restart the Pre-Institution Mediation and approach the Civil Court only after fresh Pre-Institution Mediation.
50.Once this Court had opined that Plaintiff was entitled to benefit of Section 14 Limitation Act, I see no reason as to why the same relief should have been sought from the same Court all over again by the plaintiff in the suit in hand by moving a separate application. More so when the order of this Court dated 09.01.2023 benefit under Section 14 was not challenged by defendant before Hon'ble High Court.
51.In this backdrop, Ld. Counsel for defendant has relied on case titled Nina Garments (Pvt.) Ltd. Vs. Unitech Ltd., 2012 Latest Caselaw 5714 Del wherein the original side of Hon'ble High Court of Delhi has observed that the plaintiff should plead circumstances so as to make out a case for exclusion of period spent bonafidely before a Court. Perusal of the plaint in hand shows that the factum of filing of previous suit and the circumstances under which the same was rejected is duly pleaded in para 16 and 17. Even the order where benefit of Section 14 was granted by this very Court was made part of the fresh suit i.e. suit in hand. As such it cannot be said that plaintiff has not pleaded on concealed material facts.
52.Ld. counsel for defendant has relied on Suryachakra Power Corporation Ltd. Vs. Electricity Department, 2016 Latest Caselaw 679 SC to show that in case a litigant fails to satisfy the court about the reasons for condonation of delay, such condonations can be withdrawn even post granting of the same. The cited judgment pertains to a litigation emanating from Electricity Act, 2003 where the Tribunal was CS Comm. No.143/2023 Eastman Auto and Power Ltd. Vs. M/s Green Kaiketsu Automotive India Pvt. Ltd. Page 24 of 35 found to have condoned period beyond the statutory bar unlike the case in hand. As discussed supra there is no condonation sought here rather the relief already granted to the plaintiff pertains to exclusion of period which is totally different to condonation of delay.
53.Reliance is also placed on Purni Devi and Anr. Vs. Babu Ram and Ors., 2024 Latest Caselaw 201 SC where Hon'ble Supreme Court has reproduced in Consolidated Engineering Enterprises Vs. Irrigation Department and Ors., 2008 Latest Caselaw 322 SC to highlight the conditions which calls for grant of benefit under Section 14 of Limitation Act. The relevant text is reproduced as under:
"30.The principles pertaining to applicability of Section 14, were extensively discussed and summarised by this Court in Consolidated Engg. Enterprises (supra), wherein while holding the exclusion of time period under Section 14 of the Limitation Act to a petition under Section 34 of the Arbitration Act it was observed:-
"21. Section 14 of the Limitation Act deals with exclusion of time of proceeding bona fide in a Court without jurisdiction. On analysis of the said section, it becomes evident that the following conditions must be satisfied before Section 14 can be pressed into service:
(1) Both the prior and subsequent proceedings are civil proceedings prosecuted by the same party;
(2) The prior proceeding had been prosecuted with due diligence and in good faith;
(3) The failure of the prior proceeding was due to defect of jurisdiction or other cause of like nature;
(4) The earlier proceeding and the latter proceeding must relate to the same matter in issue; and (5) Both the proceedings are in a court."
54.In case titled M.P. Housing Board and Ors. Vs. Mohan Lal and Company (2016) 14 SCC 199 Hon'ble Supreme Court has directed the Courts that Section 14 of the Limitation Act has to be interpreted liberally to advance the cause of justice.
55.In case titled Sesh Nath Singh and Anr. Vs. Baidyabati Sheoraphuli Co-operative Bank Ltd. and Anr., 2021 Latest Caselaw 154 SC.
CS Comm. No.143/2023 Eastman Auto and Power Ltd. Vs. M/s Green Kaiketsu Automotive India Pvt. Ltd. Page 25 of 35Hon'ble Supreme Court observed that in deserving cases even making of an application for condonation of delay under Limitation Act is not necessary. Relevant text is reproduced hereunder:
63. Section 5 of the Limitation Act, 1963 does not speak of any application. The Section enables the Court to admit an application or appeal if the applicant or the appellant, as the case may be, satisfies the Court that he had sufficient cause for not making the application and/or preferring the appeal, within the time prescribed.
Although, it is the general practice to make a formal application under Section 5 of the Limitation Act, 1963, in order to enable the Court or Tribunal to weigh the sufficiency of the cause for the inability of the appellant/applicant to approach the Court/Tribunal within the time prescribed by limitation, there is no bar to exercise by the Court/Tribunal of its discretion to condone delay, in the absence of a formal application.
64. A plain reading of Section 5 of the Limitation Act makes it amply clear that, it is not mandatory to file an application in writing before relief can be granted under the said section. Had such an application been mandatory, Section 5 of the Limitation Act would have expressly provided so. Section 5 would then have read that the Court might condone delay beyond the time prescribed by limitation for filing an application or appeal, if on consideration of the application of the appellant or the applicant, as the case may be, for condonation of delay, the Court is satisfied that the appellant/applicant had sufficient cause for not preferring the appeal or making the application within such period. Alternatively, a proviso or an Explanation would have been added to Section 5, requiring the appellant or the applicant, as the case may be, to make an application for condonation of delay. However, the Court can always insist that an application or an affidavit showing cause for the delay be filed. No applicant or appellant can claim condonation of delay under Section 5 of the Limitation Act as of right, without making an application.
102. "In any case, Section 5 and Section 14 of the Limitation Act are not mutually exclusive. Even in a case where Section 14 does not strictly apply, the principles of Section 14 can be invoked to grant relief to an applicant under Section 5 of the Limitation Act by purposively construing 'sufficient cause'. It is well settled that omission to refer to the correct section of a statute does not vitiate an order. At the cost of repetition it is reiterated that delay can be condoned irrespective of whether there is any formal application, if there are sufficient materials on record disclosing sufficient cause for the delay."
56.Perusal of the record reveals that vide order dated 03.07.2023 when cognizance of this suit was taken by this Court a detailed discussion of the relevant facts and material was carried out and the aspect of Limitation was duly considered and a finding was given that this suit is found to be within limitation alongwith benefit of Section 14 of Limitation Act.
CS Comm. No.143/2023 Eastman Auto and Power Ltd. Vs. M/s Green Kaiketsu Automotive India Pvt. Ltd. Page 26 of 3557.It is also a settled legal proposition that exclusion of time under Section 14 of Limitation Act, 1963 is mandatory once the condition under Section 14 (1) qua due diligence in a civil proceeding are found to be existing by the Court. It cannot be said that the plaintiff did not act in good faith as defined under Section 2 (h) of Limitation Act when the earlier suit bearing no. CS (Comm.) 408/2022 was filed. For ready reference the same is reproduced hereunder:
Section 2 of Limitation Act, 1963.- Definitions
(h) "good faith" - nothing shall be deemed to be done in good faith which is not done with due care and attention.
58.As discussed supra, evidently, the plaintiff company approached Shahdara DLSA even when the Covid was creating havoc in Delhi in 2021 and filed the suit within limitation only after a Non-Starter Report was granted to it. Owing to lack of communication the plaintiff after depositing the administrative fees could not deposit the mediation fees well in time and by the time the mediation fees was deposited, Shahdara DLSA acted in an undue haste and issued a Non- Starter Report. Hence, not only in the earlier set of proceedings carried out before this Court between the same parties but even in this set of proceedings this Court is of the considered view that requirements of Section 14(1) Limitation Act have been duly met by the plaintiff and as per mandate of law plaintiff deserves exclusion of time spent before this very Court in the earlier civil proceedings on the same cause of action.
59.Applying the above settled law on the facts of this case it is evident that the initial and the current proceedings are of civil nature they are between the same parties, on the same cause of action and before the CS Comm. No.143/2023 Eastman Auto and Power Ltd. Vs. M/s Green Kaiketsu Automotive India Pvt. Ltd. Page 27 of 35 same Court.
60.In view of the above, I find no merits in the plea of Ld. Counsel for defendant that the benefit of Section 14 of Limitation Act, 1963 already granted to plaintiff by this Court shall be withdrawn. As such, this issue is answered in favour of plaintiff and against the defendant.
Whether plaintiff is entitled to benefit of Section 19 Limitation Act qua part payment of Rs.2 lakhs made by defendant on 09.07.2019?
61.Although this issue is answered in favour of plaintiff but still Ld. Counsel for plaintiff wishes to place on record his submissions that his suit shall be considered as within limitation also on the ground that a part payment of Rs.2 lakhs was made by defendant on 09.07.2019 and that this shall be treated as sufficient compliance of Section 19 of Limitation Act. For ready reference the same is reproduced hereunder:
Section 19 Limitation Act : Effect of payment on account of debt or of interest on legacy.-
"Where payment on account of a debt or of interest on a legacy is made before the expiration of the prescribed period by the person liable to pay the debt or legacy or by his agent duly authorised in this behalf, a fresh period of limitation shall be computed from the time when the payment was made. Provided that, save in the case of payment of interest made before the 1 st day of January, 1928, an acknowledgement of the payment appears in the handwriting of, or in a writing signed by, the person making the payment."
Explanation.- For the purposes of this section,-
(a) where mortgaged land is in the possession of the mortgagee, the receipt of the rent or produce of such land shall be deemed to be a payment;
(b)"debt" does not include money payable under a decree or order of a Court."
(Emphasis Supplied)
62.Bare reading of this Section shows that in order to avail the benefit of this Section two prerequisites have to be satisfied. The first that a payment is made on account of a debt before the expiration of the prescribed period and the second that such payment shall accompany CS Comm. No.143/2023 Eastman Auto and Power Ltd. Vs. M/s Green Kaiketsu Automotive India Pvt. Ltd. Page 28 of 35 an acknowledgement of the payment in handwriting or in writing signed by the payer.
63.In the case in hand although the ledger Ex.PW1/5 does show a credit entry of Rs. 2 lakhs on 09.07.2019 but admittedly no written document or email or message accompanied from the defendant side to the plaintiff qua this payment. Although it is not the case of the defendant company that it did not pay this Rs. 2 lakhs to the plaintiff but simply because plaintiff's debit balance is shown to be Rs.4,98,700/- and as per defendant goods worth Rs. 5 lakhs were found defective cannot constitute an acknowledgement as mandated in proviso to Section 19 of Limitation Act.
64.Ld. counsel for plaintiff has relied on case titled Ashok Parshad Vs. M/s Mahalaxmi Sugar Mills Co. Ltd., 2013 Latest Caselaw 4144 Del and case titled Veena Jain Vs. Sunil Sood, 2012 Latest Caselaw 4326 Del wherein Single Bench of Honble High Court of Delhi on the original side has mentioned that Section 9 can be invoked as and when the last payment is received. The cited judgments do not specifically mention about simultaneous issuance of any written document qua payment and as such it cannot be said that these two judgments can have the effect of dispensing the requirement provided under proviso to Section 19 of Limitation Act.
65.However, law in this regard is well-settled by Hon'ble Supreme Court of India in Sant Lal Mahton Vs. Kamla Prasad and Ors., 1951 Latest Caselaw 47 SC. The relevant text is as under:
"9. For determination of this point, it is necessary to turn to the provision of Section 20 of the Limitation Act. The Section, after it was amended by Act 1 of 1927, stands as follows:
"20. (1) Where interest on a debt or legacy is, before the expiration of the prescribed period, paid as such by the person liable to pay the debt or legacy, CS Comm. No.143/2023 Eastman Auto and Power Ltd. Vs. M/s Green Kaiketsu Automotive India Pvt. Ltd. Page 29 of 35 or by his agent duly authorised in this behalf, or where part of the principal of a debt is, before the expiration of the prescribed period, paid by the debtor or by his agent duly authorised in this behalf, a fresh period of limitation shall be computed from the time when the payment was made;
provided that, save in the case of a payment of interest made before the Ist day of January, 1928, an acknowledgement of the payment appears in the handwriting of, or in a writing signed by, the person making the payment."
66.In the light of the above, I do not find any strength in the plea of Ld. Counsel for plaintiff for invoking Section 19 of Limitation Act. However on account of discussions carried above granting the benefit of exemption from limitation during the Covid period suit of the plaintiff is found to be within limitation and the issue no. 1 is answered in favour of plaintiff and against the defendant.
Issue no. 2:
ii. Whether plaintiff is entitled for recovery of Rs.10,14,972/- along with pendente-lite and future interest @18% p.a.? OPP
67.As far as plaintiff's claim on merits is concerned, it is evident from the pleadings, documents filed and the evidence that both the parties had business relations whereunder defendant used to carry out purchase of e-rickshaw batteries from the plaintiff. Plaintiff sold and delivered batteries worth Rs.19,97,930/- to the defendant by way of four GST paid invoices. While first three invoices stood paid up by the defendant but the fourth invoice Ex.PW1/4 valued Rs.6,78,400/- was partially paid and a sum of Rs.4,98,700/- was due and payable as on 09.07.2019 as per ledger Ex.PW1/5.
68.The defence taken by the defendant in the WS and the affidavit in chief Ex.DW1/A in this regard is that the batteries worth around Rs. 5 CS Comm. No.143/2023 Eastman Auto and Power Ltd. Vs. M/s Green Kaiketsu Automotive India Pvt. Ltd. Page 30 of 35 lakhs supplied to him vide two invoices Ex.PW1/3 dated 08.08.2017 and Ex.PW1/4 dated 26.09.2017 were of inferior quality, defective and non-usable. It is neither the pleaded case nor is argued that the plaintiff was supposed to supply batteries of a particular quality or specification. Law with regard to quality under sale of goods is covered under Section 16 of Sale of Goods Act, 1930. For ready reference the same is reproduced hereunder:
Section 16 of Sale of Goods Act: Implied conditions as to quality of fitness "Subject to the provisions of this Act and of any other law for the time being in force, there is no implied warranty or condition as to the quality or fitness for any particular purpose of goods supplied under a contract of sale, except as follows:-
(1) Where the buyer, expressly or by implication, makes known to the seller the particular purpose for which the goods are required, so as to show that the buyer relies on the seller's skill or judgment, and the goods are of a description which it is in the course of the seller's business to supply (whether he is the manufacturer or producer or not), there is an implied condition that the goods shall be reasonably fit for such purpose:
Provided that, in the case of a contract for the sale of a specified article under its patent or other trade name, there is no implied condition as to its fitness for any particular purpose.
(2) Where goods are bought by description from a seller who deals in goods of that description (whether he is the manufacturer or producer or not), there is an implied condition that the goods shall be of merchantable quality:
Provided that, if the buyer has examined the goods, there shall be no implied condition as regards defects which such examination ought to have revealed.
(3) An implied warranty or condition as to quality or fitness for a particular purpose may be annexed by the usage of trade.
(4) An express warranty or condition does not negative a warranty or condition implied by this Act unless consistent therewith.
(Emphasis Supplied)
69.Plain reading of the same shows that unless specifically agreed or a condition is imposed no implied warranty qua the quality or fitness of goods supplied can be raised by the buyer. It is interesting to observe that in the WS and affidavit in chief defendant has contended that even the goods supplied under invoice Ex.PW1/3 valued Rs.6,96,320/-
CS Comm. No.143/2023 Eastman Auto and Power Ltd. Vs. M/s Green Kaiketsu Automotive India Pvt. Ltd. Page 31 of 35dated 08.08.2017 were defective but still he paid up the entire money under the sale and also paid another sum of Rs.2 lakhs on 09.07.2019 for the third and the fourth invoice Ex.PW1/4 dated 26.09.2017.
70.In so far as it is the defendant who has taken the plea that the goods were defective and returnable, nothing has been filed on record to show that the goods were ever returned back to the plaintiff or any attempt for return was made. Rather the defendant concedes that since the plaintiff's unused material about Rs.5 lakhs was lying with him and according to DW1 it was unusable and he sold it to a Kabadi as a garbage.
71.During the course of arguments, Ld. Counsel for defendant tried to draw attention of this Court to certain emails claimed to have been sent by the defendant company to the plaintiff as proved by plaintiff as Ex.PW1/6 but it is rightly objected to by Ld. Counsel for plaintiff on the ground that in the defendant's affidavit of admission denial of documents the entire trail emails Ex.PW1/6 have been denied by the defendant. Admittedly, no email claimed to have been sent by defendant to the plaintiff have been filed or proved by it on record.
72.As such having denied the document, the defendant cannot be permitted to read and rely the same for proving its defence or to dislodge plaintiff's claim. Even otherwise the said emails only refers to talks of granting certain warranties on the batteries supplied but there is no reference of any defect in the goods. The onus of proving the claimed defect lies on defendant under Section 102 and Section 103 of Indian Evidence Act. For ready reference the same is reproduced as under:
CS Comm. No.143/2023 Eastman Auto and Power Ltd. Vs. M/s Green Kaiketsu Automotive India Pvt. Ltd. Page 32 of 35Section 102 Evidence Act: On whom the Burden of Proof lies The burden of proof in a suit or proceeding lies on that person who would fail if no evidence at all were given on either side. Illustration:
(a) A sues B for land of which B is in possession, and which, as A as-
serts, was left to A by the will of C, B's father.
If no evidence were given no either side, B would be entitled to retain his possession. Therefore the burden of proof is on A.
(b) A sues B for money due on a bond.
The execution of the bond is admitted, but B says that it was obtained by fraud, which A denies.
If no evidence were given on either side, A would succeed, as the bond is not disputed and the fraud is not proved.
Therefore the burden of proof is on B. Section 103 Evidence Act: Burden of Proof as to particular fact The burden of proof as to any particular fact lies on that person who wishes the Court to believe in its existence unless it is provided by any law that the proof of that fact shall lie on any particular person. Illustration:
(a) A prosecutes B for theft, and wishes the Court to believe that B ad-
mitted the theft to C. A must prove the admission.
B wishes the Court to believe that, at the time in question, he was else- where. He must prove it.
73.In the absence of any evidence I have no hesitation in concluding that defendant has failed to discharge the onus of proving the defence that plaintiff supplied defective, inferior quality or unusable batteries worth Rs.5 lakhs.
74.In the light of the above duly supported with GST paid invoices and admitted delivery plaintiff has discharged the onus of proving this issue and it is entitled to recovery of principal sum of Rs.4,98,700/-. Interest CS Comm. No.143/2023 Eastman Auto and Power Ltd. Vs. M/s Green Kaiketsu Automotive India Pvt. Ltd. Page 33 of 35
75.As far as interest is concerned, the invoice Ex.PW1/4 refers to 0.1% per day equivalent to 36% per annum are cited. However pre-suit in- terest is calculated at @18% per annum. The interest is payable as per Section 34 CPC. For ready reference, Section 34 CPC is reproduced hereunder:
Section 34 CPC: Interest
(i)"Where and in so far as a decree is for the payment of money, the Court may, in the decree, order interest at such rate as the Court deems reasonable to be paid on the principal sum adjudged, from the date of the suit to the date of the decree, in addition to any interest adjudged on such principal sum for any period prior to the institution of the suit, with further interest at such rate not exceeding 6% per an-
num as the Court deems reasonable on such principal sum from the date of the de- cree to the date of payment, or to such earlier date as the court thinks fit.
(ii).Provided that where the liability in relation to the sum so adjudged had arisen out of a commercial transaction, the rate of such further interest may exceed 6% per annum but shall not exceed the contractual rate or interest or where there is no contractual rate, the rate at which moneys are lent or advanced by nationalized banks in relation to commercial transactions.
Explanation (i) In this sub-section, "nationalized bank" means a corresponding new bank as defined in the Banking Companies (Acquisition and Transfer of Un- dertakings) Act 1970.
Explanation (ii) For the purposes of this section, a transaction is a commercial transaction, if it is connected with the industry, trade or business of the party incur- ring the liability.
Where such a decree is silent with respect to the payment of further interest (on such principal sum) from the date of the decree to the date of the payment or other earlier date, the Court shall be deemed to have refused such interest, and a separate suit therefore shall not lie.
(Emphasis Supplied)
76.Section 34 CPC provides that plaintiff will be entitled the interest at the rate at which Court finds reasonable. For a general suit, the rate of interest prescribed is 6% and for commercial suit, the Parliament pro- mulgates that rate of interest may increase from 6% to a rate which is found reasonable. Plaintiff is accordingly entitled to only the rate at which RBI has issued Circular for Commercial suits.
CS Comm. No.143/2023 Eastman Auto and Power Ltd. Vs. M/s Green Kaiketsu Automotive India Pvt. Ltd. Page 34 of 3577.As far as the interest is concered, rate applicable to Commercial trans- action shall be payable. As per RBI notification dated 30.08.2022 is- sued vide Press Release no.2022-2023/794 whereby advisory issued by RBI to Schedule Commercial banks of accepting deposit rates @ 9.05% per annum.
Relief
78.In view of the above, suit of the plaintiff is decreed with cost for a sum of Rs.4,98,700/- with 9% interest per annum w.e.f. 01.11.2017 on- wards (as per last sale bill) pendente lite and till realization. Lawyer's fees is assessed as Rs. 25,000/-.
79.Decree sheet be prepared accordingly. File be consigned to Record Room after due compliance.
(SURINDER S. RATHI) District Judge, Commercial Court -03 Shahdara District, KKD Delhi/10.05.2024 CS Comm. No.143/2023 Eastman Auto and Power Ltd. Vs. M/s Green Kaiketsu Automotive India Pvt. Ltd. Page 35 of 35