Delhi District Court
Chandrahas Kuchya vs Insta Power Limited on 17 September, 2025
IN THE COURT OF SH. LOKESH KUMAR SHARMA
DISTRICT JUDGE (COMMERCIAL COURTS)-05,
SOUTH DISTRICT, SAKET COURTS, NEW DELHI
In the matter of
CS (COMM) 661/2023
CNR No. DLST01-012220-2023
Chandrahas Kuchya
Proprietor of Cine India
Office At:
H-63, Harkesh Nagar,
Phase-II, Okhla,
New Delhi-110020 ..... Plaintiff
Versus
Insta Power Ltd.
Office At:
S-19, Panchshila Park,
New Delhi-110017
Also At
Khasra No. 103, Raipur Industrial Area,
Bhagwanpur, Roorkee,
Distt: Haridwar, Uttrakhand ..... Defendant
Institution of the Suit : 19.12.2023
Arguments concluded on : 04.09.2025
Judgment pronounced on : 17.09.2025
JUDGEMENT
1. The present suit for recovery of Rs. 9,23,614/- (Rs. Nine Lakhs Twenty Three Thousand Six Hundred Fourteen Only) along with Pendentelite and future interest @2.5% per month has been filed by the plaintiff against the defendant.
CS(COMM)661/23 Chandrahas Kuchya Vs. Insta Power Limited Page 1 of 332. Brief facts:- As per the plaintiff, who is claiming himself to be the Proprietor of M/s Cine India, having his office at H-63, Harkesh Nagar, Phase-II, Okhla, New Delhi-110020 and was engaged in the business of dealing in all types of Screw nut bolts. The present suit was filed by Sh. Chandrahas Kuchya, who was authorized to file, sign and verify the present lis, vide Special Power of Attorney dated 22.11.2023 executed in his favour by his proprietorship concern.
3. Defendant was also stated to be a Non-Government Limited Company by shares and duly incorporated under the provisions of Companies Act, 1956.
It was stated that in 2014, Defendant had approached the Plaintiff Company for purchasing of screw, nut bolts and after satisfaction, it had also placed order for supply of aforesaid goods and the same were duly supplied by the Plaintiff w.e.f. April 2014 till June 2017 against invoices.
It was stated that Plaintiff had supplied goods as per the requirements of the defendant and the same were duly accepted by it without any complaint. After satisfaction, defendant had made certain payments, however, it had failed to pay the entire amount despite repeated requests and reminders of the Plaintiff.
It was stated that Plaintiff had issued debit notes of interest on 01.06.2018 and 30.09.2019 and the same were duly send to defendant through email on 17.04.2019. On 03.05.2019, CS(COMM)661/23 Chandrahas Kuchya Vs. Insta Power Limited Page 2 of 33 Defendant had sent a notice to the Plaintiff, through which, it had admitted its liability and had also agreed to settle the balance payment for a sum of Rs. 1,16,922/- as full and final payment but the said offer was not accepted by the Plaintiff.
It was stated that on 01.05.2019, Plaintiff had served the notice u/s 8 of the Insolvency and Bankruptcy Code, 2016 upon the defendant and the same was duly replied by it on 09.05.2019. Plaintiff had also filed a petition u/s 9 of the Insolvency and Bankruptcy Code, 2016 before the NCLT, New Delhi, vide petition no. CP IB No. 2070 (ND) 2019, however, the same was dismissed in default due to non-appearance vide order dated 07.12.2022. As per the directions of NCLT, Plaintiff had also paid Rs. 50,000/- to IRP Sh. Dharam Vir Gupta.
Following claims were stated to have been due and payable by the defendant to the plaintiff:
a) Rs. 3,42,594 un-contractually withheld.
b) Interest @2.5% p.m w.e.f. 05.09.2018 due to wrongful and un-contractual delay in the settlement of accounts and payment.
c) Rs. 50,000/- paid by Plaintiff to IRP Sh. Dharam Vir Gupta.
4. It was stated further that despite repeated requests and reminders, Defendant had failed to clear its pending dues. Consequently, Plaintiff had issued a legal notice, through speed post, to the defendant through his Counsel on 01.05.2019, and the same was duly replied by the Defendant on 09.05.2019, in which CS(COMM)661/23 Chandrahas Kuchya Vs. Insta Power Limited Page 3 of 33 it had accepted its liability and expressed its readiness to pay only Rs. 1,16,922/- however, it had no intention to pay the remaining amount.
5. It was averred further that plaintiff had applied for Pre-institution Mediation with SDLSA on 03.05.2023, however, despite issuance of two notices dated 18.05.2023 and 05.07.2023, neither the defendant had appeared nor any intimation was received from its side for the mediation, hence non-starter report was issued by SDLSA on 06.07.2023.
6. The cause of action was stated to have arisen firstly in the month of April 2014, when Defendant had approached the Plaintiff for supply of the goods and had further arisen on 04.09.2018, when last payment was made by the defendant. The cause of action had again arisen on 17.04.2019 and 01.05.2019, when a debit note and legal notice were respectively issued by the Plaintiff to the defendant. The cause of action had again arisen on 03.05.2019 and 09.05.2019, when Defendant had admitted its liability and had again arisen in the year 2019, when Plaintiff had filed a petition u/s 9 IBC, 2016 and had again arisen when the Petition was dismissed by NCLT. Cause of action had arisen again on 03.05.2023 and 06.07.2023 (wrongly mentioned as 18.05.2023 and 05.07.2023 respectively in the plaint), when the plaintiff had approached the SDLSA, Saket, New Delhi, for pre-litigation mediation and Non Starter Report was issued by SDLSA. The cause of action was stated to be still continuing as the defendant had failed to pay the amount due against it.
CS(COMM)661/23 Chandrahas Kuchya Vs. Insta Power Limited Page 4 of 337. It was stated that as per the directions of the Hon'ble Apex Court in WP (C) 3/2020, the period w.e.f. 15.032020 till 28.02.2022 would have to be excluded while counting/calculated the limitation period. In the present case, last payment was made made on 04.09.2018 and on 09.05.2019, defendant had admitted its liability, hence, the plaintiff was stated to have been entitled to the benefit under Article 14 of the Limitation Act.
8. Since the defendant had its registered office at Panchshila Park, Delhi, which had fallen within the territorial jurisdiction of this court and since the subject matter of the suit was "Commercial" in nature as per section 2(1)(c) of the Commercial Courts Act, 2015, hence this court was stated to have territorial as well as pecuniary jurisdiction to try and decide the present lis.
9. In the light of the aforesaid facts and circumstances, the plaintiff had prayed for passing of a decree to the tune of Rs. 9,23,614/- alongwith pendente lite and future interest @2.5% per month w.e.f 05.09.2019 till the date of its realization along with costs and legal fee of the present suit in his favour and against the defendant.
10. Upon service of notice, the defendant had also appeared to contest the case of plaintiff on its merits and filed its written statement on record, wherein it had taken a preliminary objection that plaintiff was guilty of concealment of material facts as well as for not approaching the court with clean hands.
CS(COMM)661/23 Chandrahas Kuchya Vs. Insta Power Limited Page 5 of 33No cause of action was stated to have ever arisen in favour of the plaintiff and against the defendants.
On merits, defendant was stated to have made payments towards the goods received by it from the Plaintiff between April 2016 till June 2017 and the terms of the transactions were mentioned on the various Purchase Orders (POs) issued by the Defendant upon Plaintiff. One of the terms related to payment provided that, payment was to be made within 60/90 days after receiving of goods provided that all the other terms and conditions were also met out.
Further the supplied goods were liable to be inspected for compliance with product satisfaction and rejections were to be replaced by plaintiff at no extra cost. Material were to be supplied in original as per specified make. Any duplicacy would have resulted in penalization and other legal actions being initiated against the Plaintiff. The jurisdiction regarding all matters in dispute was to be vested in Gurgaon Courts.
It was stated further that as per communication dated 09.05.2019, defendant had clearly mentioned about the inferior and sub-standard quality of goods supplied by the Plaintiff to it and defendant had also returned some of those goods and had also stopped further purchases from June 2017, hence, Plaintiff had started overcharging the defendant. Defendant had also issued several debit notes upon Plaintiff, but the Plaintiff had steadfastly refused to honour the same or even carry out a rendition of accounts.
CS(COMM)661/23 Chandrahas Kuchya Vs. Insta Power Limited Page 6 of 33It was also stated that since the Plaintiff had claimed liability towards tax invoices which pertained to year 2016 and 2017 and the present suit was filed in November 2023, much after expiry of the period of limitation.
Apart from this, except for the paras which were either specifically admitted or essentially or purely constituted a matter of record, rest others were denied by it as wrong and incorrect.
11. To this written statement of the defendant, plaintiff had also filed his replication, wherein all the preliminary objections taken by the defendant were denied by him and the contents of plaint were reiterated as correct on merits.
12. On the pleadings of the parties, this court vide order dated 27.11.2024, had framed the following issues for determination:
(i) Whether the Plaintiff is entitled to recovery of suit amount, as prayed? OPP.
(ii) Whether the Plaintiff is entitled to claim the interest on suit amount, if so, at what rate? OPP
(iii) Whether the Plaintiff is guilty of suppression and concealment of material facts? OPD
(iv) Whether the Suit of the Plaintiff is barred by limitation? OPD
(v)Relief CS(COMM)661/23 Chandrahas Kuchya Vs. Insta Power Limited Page 7 of 33
13. In order to prove his case by preponderance of probabilities, the plaintiff Sh. Chandrahas Kuchya, himself had appeared in the witness box and had filed in evidence, his examination-in-chief by way of affidavit Ex. PW1/A, wherein besides reiterating the contents of his plaint on solemn affirmation, he had also placed on record the following documents:-
i. Ex.PW1/1 - Special Power of Attorney dated 22.11.2023 on behalf of Plaintiff in favour of PW1.
ii. Ex. PW1/2- Tax Invoice No. 9573 dated 05.08.2016.
iii. Ex. PW1/3- Tax Invoice No. 9348 dated 15.04.2016 (however, in affidavit Ex.
PW1/A, inadvertently written as
05.04.2016).
iv. Ex. PW1/4- Tax Invoice No. 9543 dated
15.07.2016 (however, in affidavit Ex.
PW1/A, inadvertently written as
05.07.2016).
v. Ex. PW1/5- Tax Invoice No. 9503 dated
27.06.2016. (however, in affidavit Ex.
PW1/A, inadvertently written as
05.08.2016).
vi. Ex. PW1/6- Tax Invoice No. 9394 dated
04.05.2016.
vii. Ex. PW1/7- Tax Invoice No. 9423 dated 18.05.2016.
CS(COMM)661/23 Chandrahas Kuchya Vs. Insta Power Limited Page 8 of 33viii. Ex. PW1/8- Tax Invoice No. 10091 dated 12.05.2017.
ix. Ex. PW1/9- Tax Invoice No. 10113 dated 19.05.2017.
x. Ex. PW1/10- Tax Invoice No. 9998 dated 27.03.2017.
xi. Ex. PW1/11- Tax Invoice No. 10067 dated 01.05.2017.
xii. Ex. PW1/12- Tax Invoice No. 9729 dated 14.11.2016.
xiii. Ex. PW1/13- Ledger account of Plaintiff w.e.f. 01.04.2014 to 31.03.2020 in respect of defendant.
xiv. Ex. PW1/14 (colly)- Copy of email dated 17.04.2019 sent to defendant.
xv. Ex. PW1/15 and Ex. PW1/16- Original debit note dated 01.06.2018 (however, inadvertently it was written as 01.06.2019 in affidavit Ex. PW1/A) and 30.03.2019 respectively. (Inadvertently mentioned as 31.03.2019 in Ex. PW1/A).
xvi. Ex. PW1/17- Offer of appointment issued by Sh. Dharmvir Gupta dated 03.08.2022 to the Plaintiff.
xvii. Ex. PW1/18 to Ex. PW1/20- Legal notice dated 01.05.2019, reply of defendant dated 09.05.2019 and 03.05.2019 respectively. xviii. Ex. PW1/21- Certificate u/o XI Rule 6(3).
CS(COMM)661/23 Chandrahas Kuchya Vs. Insta Power Limited Page 9 of 33xix. Ex. PW1/22- Non-Starter report issued by the SDLSA, Saket Courts, Delhi dated 06.07.2023.
During his cross-examination conducted by Ld. Counsel for the defendant on 01.04.2025, PW1 had denied the suggestion that he was not the proprietor of M/s Cine India. He had also denied the suggestion that he had not authorized Gaurav Kuchya to engage a Counsel in the present case. He had denied the suggestion that Plaintiff himself had approached the defendant and not vice-versa as stated in his affidavit. However, he had volunteered that defendant used to issue Purchase order (PO) to Plaintiff. He had also denied the suggestion that defendant had made payments only after satisfying itself regarding quantity and quality of the material supplied to it by the Plaintiff. However, he had volunteered that Defendant was supposed to make full payment against the invoice, and in case, if any material was found defective, then defendant had a right to return the same. He had denied the suggestion the Plaintiff had not supplied the complete material to the defendant as per the purchase orders received.
His affidavit Ex. PW1/A was stated to have been drafted upon his instructions and contents of same were explained to him in Hindi as well. Defendant was stated to have informed the Plaintiff through e-mail, whenever, the quality of material supplied was found inferior and even it used to return the said material to Plaintiff along with debit notes. Para 5 of PW1's affidavit Ex. PW1/A, was stated to have mentioned about CS(COMM)661/23 Chandrahas Kuchya Vs. Insta Power Limited Page 10 of 33 the bills raised by the Plaintiff upon the defendant. The stipulation regarding payment of interest was stated to have already been mentioned in their invoices, hence, it was not discussed with defendant. PW1 had admitted that defendant had made a settlement offer, but since he wanted his full payment, hence, neither it was accepted by him nor any counter offer was made on his behalf. He had denied the suggestion that no direction was issued by the Ld. NCLT to the Plaintiff to pay Rs. 50,000/- to IRP Sh. Dhram Vir Gupta.
Other formal suggestions were also denied by him as wrong and incorrect.
Plaintiff had also examined Sh. Dharamvir Gupta, S/o late Sh. Jai Bhagwan Gupta, aged about 54 years, having his Office at A-263/1, Derawal Nagar, Delhi-110009, Chartered Accountant and Insolvency Professional as PW2, who had stated in his examination-in-chief that he was running his firm in the name of Garg Ashok and Company. In this case, Plaintiff Chandrahas Kuchya was stated to have appointed him as an insolvency professional. He had also worked with the Plaintiff for few dates. However, later on the case was dismissed by NCLT. He had received only first installment of his fees and second installment was never received by him. After seeing the document Ex. PW1/17, on the date of his deposition before the court, he had admitted his signatures at point 'A'.
This witness was not cross-examined on behalf of the defendant, despite availing an opportunity in this regard.
CS(COMM)661/23 Chandrahas Kuchya Vs. Insta Power Limited Page 11 of 3314. Thereafter Plaintiff's evidence was closed.
15. In rebuttal defendant had examined its Manager (Administration) Sh. Palash Mukherjee, S/o Sh. Bipradas Mukherjee, aged about 36 yrs, R/o B-603, Radhika Homes, Umeed Green, Shahberi, Noida Extension, having its registered office at 4-A, 3rd floor, Adhchini, Sri Aurbindo Marg, New Delhi- 17, who had filed in evidence, his examination-in-chief by way of affidavit Ex. DW1/A reiterating the contents of written statement on solemn affirmation. He had also placed on record the following documents:-
i. Ex.DW1/1 (Colly)- True copies of the
Purchase Orders dated 02.04.2016,
18.04.2016, 18.04.2016, 23.04.2016,
09.05.2016, 16.05.2016, 20.06.2016,
20.06.2016, 13.07.2016, 26.07.2016,
29.07.2016, 01.10.2016, 13.10.2016,
14.10.2016, 25.10.2016, 04.11.2016,
29.11.2016, 30.11.2016, 05.12.2016,
20.12.2016, 24.12.2016, 13.02.2017,
14.02.2017, 16.02.2017, 20.02.2017,
28.02.2017, 17.04.2017, 17.04.2017,
20.04.2017, 27.04.2017, 27.04.2017,
02.05.2017, 03.05.2017, 13.05.2017,
18.05.2017, 25.05.2017, 25.05.2017,
25.05.2017, 05.06.2017, 05.06.2017 and 06.06.2017 issued by the Defendant to the Plaintiff from time to time.
CS(COMM)661/23 Chandrahas Kuchya Vs. Insta Power Limited Page 12 of 33
ii. Ex.DW1/2 (Colly)- True copies of the debit
notes dated 21.04.2015, 13.01.2016,
25.01.2016, 18.03.2016, 18.03.2016,
30.06.2016, 31.08.2016 and 30.06.2017
issued by the Defendant to the Plaintiff. iii. Ex. DW1/3- True copies of the invoices dated 01.03.2021, 05.05.2022, 15.10.2022 and 08.11.2023 reflecting the invoices raised upon it and payments made to the Counsel by the Defendant along with deposit of TDS accrued thereon.
During his cross-examination conducted by Ld. Counsel for the plaintiff, DW1 had stated that he was working with the defendant since July 2020. He had admitted that no transaction had ever taken place in his presence. The transactions involved in the present case were stated to have pertained to year 2015-2016. Poor quality of goods was informed to Plaintiff by way of e-mail. He had denied the suggestion that he was making a false averment in this regard and since defendant had never informed the plaintiff about the poor quality of goods that is why no communication to that effect had been placed on record by him.
The document Ex. DW1/2 was stated to have been sent to the Plaintiff through e-mails as well as delivered by hand. However, a suggestion contrary to it was denied by him that this document was never sent to the Plaintiff and that is why he had not placed any document of acknowledgment on record.
CS(COMM)661/23 Chandrahas Kuchya Vs. Insta Power Limited Page 13 of 33He had denied the suggestion that the defendant was liable to pay Rs. 342594.87/- on 01.05.2019 therefore, defendant company had not filed any statement of account of payments made to the Plaintiff. However, without verification of record, he could not tell the amount, if any, paid by the defendant to Plaintiff after 09.05.2019. He had denied the suggestion that Defendant had not incurred a single penny towards legal expenses in the proceedings before NCLT. He had also denied the suggestion that the Plaintiff had supplied the goods of good quality to the defendant and even running payments were also made by defendant from time to time to the Plaintiff.
Other formal suggestions were also denied by him as wrong and incorrect.
15. Thereafter Defendant's Evidence was also closed.
16. I have heard Sh. Bhavesh Kumar Sharma, Ld. Counsel for Plaintiff and Sh. Shaurya Kuthiala, Ld. Counsel for defendant, at length and have gone through the record.
It has been argued and submitted on behalf of the plaintiff that in view of the evidence adduced on record as well as the documents placed and proved on record by him, the plaintiff has been able to establish his case successfully and thus is entitled to a decree being passed in his favour and against the defendant to the extent of suit amount.
CS(COMM)661/23 Chandrahas Kuchya Vs. Insta Power Limited Page 14 of 33Per contra, it has been submitted by Ld. Counsel for the Defendant that Plaintiff had been harassing the defendant by adopting all malafide tactics and was trying to extort money from it by hook or crook and in order to succeed in his nefarious designs and malafide intentions, Plaintiff had also dragged the defendant into a bogus litigation before the Ld. NCLT, due to which defendant was burdened to bear extra costs in the form of legal fee of the Counsel as well as other miscellaneous expenses, for which the defendant had also filed a counter-claim for recovery of the said amount from the Plaintiff and thus suit of the Plaintiff was liable to be dismissed as it had failed to justify its claim even by adducing evidence on record.
In his written submissions filed on record by Ld. Counsel for Defendant/Counter-claimant, it has been stated that the Plaintiff in para 11 of his plaint had stated that the last payment was made by defendant on 04.09.2018, whereas the suit was filed only on 16.11.2023, which was well beyond the period of limitation and was not even covered by the extended period of limitation as per the orders passed by Hon'ble Supreme Court of India in suo moto writ petition bearing no. WP (C) 3/2020. Reliance in this regard was also placed by Ld. Counsel for Defendant/Counter-claimant on the citation of Hon'ble Supreme Court in case titled as "IL & FS Financial Services Limited Vs. Adhunik Meghalaya Steels Private Limited", 2025 SCC OnLine SC 1567, decided on 29.07.2025, wherein it was held as infra:-
45. Parties were at daggers drawn on the aspect whether sub Para (I) of Para 5 of the order of 10.01.2022 would apply or sub Para (III) would CS(COMM)661/23 Chandrahas Kuchya Vs. Insta Power Limited Page 15 of 33 apply. Para 5 of the order dated 10.01.2022 reads as under: -
"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 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 Section 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 CS(COMM)661/23 Chandrahas Kuchya Vs. Insta Power Limited Page 16 of 33 which the court or tribunal can condone delay) and termination of proceedings"
46. We have no manner of doubt that sub-Para 1 of Para 5 of the order of this Court dated 10.01.2022 would apply and the entire period from 15.03.2020 to 28.02.2022 would stand excluded, which would mean that the limitation would, reckoning the acknowledgment of 12.08.2020, commence on 01.03.2022 and continue till 28.02.2025. Since the application has been filed on 15.01.2024 the same is within time. Limitation, in view of the acknowledgment as found above, having commenced only on 12.08.2020, the question of limitation expiring between 15.03.2022 and 28.02.2022 cannot arise. Hence, Para 5(III) of the order of this Court dated 10.01.2022, has no application to the facts of this case.
Further it has been stated that the amount of Rs. 1,16,922/- as admitted by Defendant in its letter dated 03.05.2019 and reiterated on 09.05.2019 had not amounted to the acknowledgment of the entire debt, hence, it could not have been considered as sufficient to extend the period of limitation in respect of the recovery of the whole amount as provided u/s 18 of the Limitation Act. Reliance in this regard was also placed on the citation of hon'ble Apex Court in case titled as "Airen and Associates Vs. Sanmar Engineering Services Limited", 2025 SCC OnLine SC 1562, decided on 24.07.2025, wherein it was held as under:
"....6. The facts having been set out hereinabove, the short point for consideration is whether the acknowledgment given by the respondent, under its legal notice dated 21.05.1992, would amount to an acknowledgment that would attract the extended period of limitation under Section 18 of CS(COMM)661/23 Chandrahas Kuchya Vs. Insta Power Limited Page 17 of 33 the Act of 1963 for the entire suit claim. Section 18 of the Act of 1963 reads as follows: -
"18. Effect of acknowledgment in writing.- (1) Where, before the expiration of the prescribed period for a suit or application in respect of any property or right, an acknowledgment of liability in respect of such property or right has been made in writing signed by the party against whom such property or right is claimed, or by any person through whom he derives his title or liability, a fresh period of limitation shall be computed from the time when the acknowledgment was so signed. (2) Where the writing containing the acknowledgment is undated, oral evidence may be given of the time when it was signed; but subject to the provisions of the Indian Evidence Act, 1872 (1 of 1872), oral evidence of its contents shall not be received.
Explanation.-For the purposes of this section,-
(a) an acknowledgment may be sufficient though it omits to specify the exact nature of the property or right, or avers that the time for payment, delivery, performance or enjoyment has not yet come or is accompanied by a refusal to pay, deliver, perform or permit to enjoy, or is coupled with a claim to set off, or is addressed to a person other than a person entitled to the property or right,
(b) the word "signed" means signed either personally or by an agent duly authorised in this behalf, and
(c) an application for the execution of a decree or order shall not be deemed to be an application in respect of any property or right."
7. In terms of the aforestated provision, there must be an 'acknowledgment of liability in respect of the property or right in question' and even if such an acknowledgment is accompanied by refusal to pay, it would mean that the period of CS(COMM)661/23 Chandrahas Kuchya Vs. Insta Power Limited Page 18 of 33 limitation would have to be computed from the time when such acknowledgment is signed.
8. In the case on hand, the respondent never acknowledged the sum claimed by the appellant in its notice dated 14.03.1992. On the other hand, the respondent clearly asserted that the contract value was much lesser, being just 1,55,223/- (Rupees one lakh fifty five thousand two hundred twenty three only), and went on to state that only a sum of 27,874.10 (Rupees twenty seven thousand eight hundred seventy four and ten paisa only) was due and payable by it. In effect, there was never an acknowledgment of the total suit claim of 3,07,115.85 (Rupees three lakhs seven thousand one hundred fifteen and eighty five paisa only), whereby the appellant could avail the benefit of extended period of limitation for the entire amount claimed.
9. Learned counsel for the appellant placed reliance on the judgment of this Court in Food Corporation of India vs. Assam State Cooperative Marketing & Consumer Federation Ltd. & Ors.2 However, this decision is distinguishable on facts, as there was a clear admission therein of the receipt of 2 crores, which formed the very basis for the suit claim in that case. Once such an acknowledgment was there, this Court held that the benefit of extended period of limitation would be available under Section 18 of the Act of 1963.
10. Reference may also be made to the judgment of this Court in J.C. Budhraja vs. Chairman, Orissa Mining Corporation Ltd. & Anr.3 and, more particularly, paragraph 21 thereof. The relevant part of paragraph 21 reads as follows: -
"21. ....... Again we may illustrate. If a house is constructed under the item rate contract and the amount due in regard to work executed is Rs. two lakhs and certain part-payments say aggregating to Rs.1,25,000/- have been made and the contractor demands payment of the balance CS(COMM)661/23 Chandrahas Kuchya Vs. Insta Power Limited Page 19 of 33 of Rs.75,000/- due towards the bill and the employer acknowledges liability, that acknowledgement will be only in regard to the sum of Rs.75,000/- which is due. If the contractor files a suit for recovery of the said Rs.75,000/- due in regard to work done and also for recovery of Rs.50,000/- as damages for breach by the employer and the said suit is filed beyond three years from completion of work and submission of the bill but within three years from the date of acknowledgement, the suit will be saved from bar of limitation only in regard to the liability that was acknowledged, namely, Rs.75,000/- and not in regard to the fresh or additional claim of Rs.50,000/- which was not the subject-matter of acknowledgement. What can be acknowledged is a present subsisting liability. An acknowledgment made with reference to a liability, cannot extend limitation for a time-barred liability or a claim that was not made at the time of acknowledgment or some other liability relating to other transactions. Any admission of jural relationship in regard to the ascertained sum due or a pending claim, cannot be an acknowledgement for a new additional claim for damages."
11. In the light of the aforestated settled legal position and given the fact that there was no acknowledgment of the full amount claimed by the appellant, in terms of the requirement prescribed in Section 18 of the Act of 1963, the question of extending the period of limitation for the entire suit claim of the appellant did not arise.
Reliance was also placed on the citation of Hon'ble Supreme Court in case titled as "HPCL Bio-fuels Ltd. Vs. Shahaji Bhanudas Bhad", 2024 SCC OnLine SC 3190, decided on 07.11.2024, wherein it was held as under:
"...96. The High Court in the impugned order thought fit to exclude the time- period spent by the CS(COMM)661/23 Chandrahas Kuchya Vs. Insta Power Limited Page 20 of 33 respondent before the NCLT, Kolkata under the IBC since it was of the view that the respondent was availing remedy for recovery of dues before a wrong forum and was thus squarely covered by Section 14(2) of the Limitation Act. The High Court took the view that since the proceedings for initiating corporate insolvency resolution process ("CIRP") under IBC as well as the proceeding sought to be initiated by way of arbitration were ultimately for the recovery of debts, both proceedings could be said to be for the same relief, and thus entitled the respondent for the benefit under Section 14(2) of the Limitation Act. The relevant observations read as under: -
"10. [...] Worth it to note that initially when he approached the NCLT, Kolkata, under Section 8 and 9 of the IBC for institution of CIRP process against the Respondent, his claim was entertained and it is only the Respondents, who approached the Appellate Tribunal, the order passed by the NCLT in favour of the Applicant came to be reversed. Therefore, it cannot be said that the Petitioner was sitting idle and not taking any steps for recovery of his dues, but it is a case where he was availing remedy for recovery of his dues before a wrong forum and he is entitled to take benefit of Section 14 of the Limitation Act, 1963."
97. We are of the view that the High Court fell in error in holding that an application under Section 9 of the IBC and an application under Section 11(6) of the Act, 1996 are filed for seeking the same relief. While the relief sought in the former is the initiation of the CIRP of the corporate debtor, the relief sought in the latter is the appointment of an arbitrator for the adjudication of disputes arising out of a contract.
98. The object of initiation of insolvency proceedings under the IBC is to seek rehabilitation of the corporate debtor by appointment of a new management, whereas the objective behind the appointment of an arbitrator is to resolve the CS(COMM)661/23 Chandrahas Kuchya Vs. Insta Power Limited Page 21 of 33 disputes arising between the parties out of a private contract. As soon as the CIRP of a corporate debtor is initiated, it becomes a proceeding in rem. On the contrary, arbitration being concerned with private disputes is not an in- rem proceeding.
99. In Swiss Ribbons Pvt. Ltd. & Anr. v. Union of India & Ors. reported in (2019) 4 SCC 17 this Court, speaking through R.F Nariman J., held that IBC was not a mere recovery legislation for the creditors but rather a beneficial legislation intended to revive and rehabilitate the corporate debtor. The relevant observations read as under:
"28. It can thus be seen that the primary focus of the legislation is to ensure revival and continuation of the corporate debtor by protecting the corporate debtor from its own management and from a corporate death by liquidation. The Code is thus a beneficial legislation which puts the corporate debtor back on its feet, not being a mere recovery legislation for creditors. The interests of the corporate debtor have, therefore, been bifurcated and separated from that of its promoters/those who are in management. Thus, the resolution process is not adversarial to the corporate debtor but, in fact, protective of its interests. The moratorium imposed by Section 14 is in the interest of the corporate debtor itself, thereby preserving the assets of the corporate debtor during the resolution process. The timelines within which the resolution process is to take place again protects the corporate debtor's assets from further dilution, and also protects all its creditors and workers by seeing that the resolution process goes through as fast as possible so that another management can, through its entrepreneurial skills, resuscitate the corporate debtor to achieve all these ends."
(Emphasis supplied) CS(COMM)661/23 Chandrahas Kuchya Vs. Insta Power Limited Page 22 of 33
100. Similarly, in Pioneer Urban Land & Infrastructure Ltd. & Anr. v. Union of India & Ors. reported in (2019) 8 SCC 416, this Court reiterated that IBC is not a debt recovery mechanism. It observed that when CIRP is initiated the aspect of recovery of debt is completely outside the control of the creditor and there is no guarantee of recovery or refund of the entire amount in default. A creditor initiates insolvency under the Code not for the relief of recovery of debt but rather for rehabilitating the corporate debtor and for a new management to take over. The relevant observations read as under:
"It is also important to remember that the Code is not meant to be a debt recovery mechanism (see para 28 of Swiss Ribbons). It is a proceeding in rem which, after being triggered, goes completely outside the control of the allottee who triggers it. Thus, any allottee/home buyer who prefers an application under Section of the Code takes the risk of his flat/apartment not being completed in the near future, in the event of there being a breach on the part of the developer. Under the Code, he may never get a refund of the entire principal, let alone interest. [...]"
(Emphasis supplied)
101. In yet another decision of this Court in Hindustan Construction Company Ltd. & Anr. v. Union of India reported in (2020) 17 SCC 324 it was held that IBC is not meant to be a recovery mechanism as it is an economic legislation meant for the resolution of stressed assets. The relevant observations read as under: -
"79. Dr Singhvi then argued that under Section 5(9) of the Insolvency Code, "financial position" is defined, which is only taken into account after a resolution professional is appointed, and is not taken into account when adjudicating "default" under Section 3(12) of CS(COMM)661/23 Chandrahas Kuchya Vs. Insta Power Limited Page 23 of 33 the Insolvency Code. This does not in any manner lead to the position that such provision is manifestly arbitrary. As has been held by our judgment in Pioneer Urban Land & Infrastructure Ltd. v. Union of India, IBC is not meant to be a recovery mechanism (see para 41 thereof)--the idea of the Insolvency Code being a mechanism which is triggered in order that resolution of stressed assets then takes place. For this purpose, the definitions of "dispute"
under Section 5(6), "claim" under Section 3(6), "debt" under Section 3(11) and "default" under Section 3(12), have all to be read together. Also, IBC, belonging to the realm of economic legislation, raises a higher threshold of challenge, leaving Parliament a free play in the joints, as has been held in Swiss Ribbons (P) Ltd. v. Union of India [...]"
(Emphasis supplied)
102. Similarly, in Jaypee Kensington Boulevard Apartments Welfare Assn. v. NBCC (India) Ltd., reported in (2022) 1 SCC 401 this Court held that the focus of IBC was more on ensuring the revival and continuation of the corporate debtor rather than mere recovery of the debt owed by the corporate debtor to its creditors. The relevant observations read as under: -
"88.2. In the judgment delivered on 25-1- 2019 in Swiss Ribbons (P) Ltd. Vs. Union of India82 hereinafter also referred to as the case of "Swiss Ribbons"), this Court traversed through the historical background and scheme of the Code in the wake of challenge to the constitutional validity of various provisions therein. One part of such challenge had been founded on the ground that the classification between "financial creditor" and "operational creditor" was discriminatory and violative of Article 14 of the Constitution of India. This ground as also several other grounds pertaining CS(COMM)661/23 Chandrahas Kuchya Vs. Insta Power Limited Page 24 of 33 to various provisions of the Code were rejected by this Court after elaborate dilation on the vast variety of rival contentions. In the course, this Court took note, inter alia, of the pre-existing state of law as also the objects and reasons for enactment of the Code. While observing that focus of the Code was to ensure revival and continuation of the corporate debtor, where liquidation would be the last resort, this Court pointed out that on its scheme and framework, the Code was a beneficial legislation to put the corporate debtor on its feet, and not a mere recovery legislation for the creditors."
(Emphasis supplied)
103. What can be discerned from aforesaid decisions is that insolvency proceedings are fundamentally different from proceedings for recovery of debt such as a suit for recovery of money, execution of decree or claims for amount due under arbitration, etc. The first distinguishing feature that sets apart ordinary recovery proceedings from insolvency proceedings is that under the former the primary relief is the recovery of dues whereas under the latter the primary concern is the revival and rehabilitation of the corporate debtor. No doubt both proceedings contemplate an aspect of recovery of debt, however in insolvency proceedings, the recovery is only a consequence of the rehabilitation/resolution of the corporate debtor and not the main relief.
104. The second distinguishing feature is that although both proceedings entail recovery of debt to a certain extent, however they are different inasmuch as when it comes to recovery proceedings it is the individual creditor's debt which is sought to be recovered, whereas in insolvency proceedings it is the entire debt of the company which is sought to be resolved. The former is only for the benefit of the individual creditor who initiates the recovery proceedings CS(COMM)661/23 Chandrahas Kuchya Vs. Insta Power Limited Page 25 of 33 whereas the latter is for the benefit of all creditors irrespective of who initiates insolvency.
105. The last distinguishing feature is that, a recovery proceeding be it a suit or arbitration is initiated by a creditor where an amount is due and is unpaid by a debtor, in other words the intention behind initiating a recovery proceeding is simpliciter for the full recovery of amount which is unpaid to it. However, in an insolvency proceeding there is no guarantee of recovery of the entire debt. A creditor opts for insolvency where an amount of such threshold is unpaid, that the creditor has an apprehension that the debtor in its current state and under the existing management in all likelihood will be unable to repay that debt in the future i.e., there is no likely prospect of any recovery, and thus it would be beneficial to take the risk of initiating insolvency which even though does not guarantee full recovery, in order for a new management to take over the corporate debtor and to recover at least some amount of debt before it is too late. Thus, the underlying intention behind initiating insolvency is not with the intention of recovering the amount owed to it, but rather with the intention that the corporate debtor is resolved / rehabilitated through a new management as soon as possible before it becomes unviable with no prospect of any meaningful recovery of its dues in the near future.
106. Thus, by no stretch of imagination can insolvency proceedings be construed as being for the same relief as any ordinary recovery proceedings, and therefore no case is made out for exclusion of time under Section 14(2) of the Limitation Act, 1963."
Further it has been stated that Plaintiff was claiming the amount at an inflated rate and was trying to levy a compound interest @ 2.5% per month , which could not be held to be CS(COMM)661/23 Chandrahas Kuchya Vs. Insta Power Limited Page 26 of 33 justified by any stretch of imagination. Even in his own invoices, the Plaintiff had mentioned that all the disputes having arisen out of the said invoice would have to be settled through arbitration, however, no notice u/s 21 of the Arbitration and Conciliation Act, 1996 was ever issued by him to the defendant.
It has also been stated that defendant had always issued debit notes to the Plaintiff in respect of overcharging and over-pricing of goods supplied by him. However, Plaintiff had failed to take note of the same or to have ever given any adjustments towards those debit notes.
Further it was stated that Plaintiff could not have claimed the amount of Rs. 50,000/- allegedly paid by him to one Sh. Dharam Vir Gupta, IRP.
Lastly, it was submitted that owing to the malafide acts of the Plaintiff, defendant had to incur costs to the extent of Rs. 2,67,500/- to defend itself before Ld. NCLT, which it was entitled to recover from Plaintiff by way of its counter-claim.
17. In view of aforesaid arguments and submissions of the parties as well as evidence appearing on record, my issue wise findings are as under:
Issue no. (i) Whether the Plaintiff is entitled to recovery of suit amount, as prayed? OPP.
The onus to prove this issue was upon the plaintiff. From the evidence adduced on record by both parties, it is CS(COMM)661/23 Chandrahas Kuchya Vs. Insta Power Limited Page 27 of 33 evident that the existence of business transactions between the parties is an admitted fact. The plaintiff has established that the material was supplied to the defendant, as evidenced by the invoices placed on record and not disputed or denied by the opposite side. As per the details provided in those invoices, the total outstanding amount found due and payable by the defendants was Rs. 2,79,878/-, whereas the ledger Ex. PW1/13 which was though an un-audited or un-certified document by a C.A had reflected the same as Rs. 3,42,594.87/-. However, the authenticity and genuineness of this document was never challenged by the Ld. Counsel for Defendant during the cross- examination of PW1, nor any contrary evidence was adduced by him during defendant's own evidence.
It has been argued on behalf of the plaintiff that the goods were delivered to the defendant in accordance with the defendant's instructions. However, despite this, it had failed to clear its the outstanding dues.
Per contra, it has been contended on behalf of the defendant that there was no outright refusal to make any payments; however, since the material supplied by the Plaintiff was of inferior and sub-standard quality and Plaintiff had also over-charged the defendant, hence, it had raised its concern about the quality of goods and had returned the goods to the Plaintiff. Defendant had also issued several debit notes upon the Plaintiff on account of its complaints, however, Plaintiff had refused to honour the same and had never carried out any rendition of accounts.CS(COMM)661/23 Chandrahas Kuchya Vs. Insta Power Limited Page 28 of 33
Although, Defendant had taken a plea of Plaintiff's failure regarding rendition of any accounts or settlement thereof. However, it is interesting to see that even the defendant itself had not come forward with any of its own ledgers maintained during the course of ordinary business with respect to the business transactions carried out with the Plaintiff.
So far as the contention regarding exorbitant charging of rate of interest is concerned, a clear perusal of the invoices categorically establishes that same provided for payment of interest @ 2.5 % per month, in case, if the payment had exceeded a period of 30 days from the date of supply.
However, as per the purchase order issued by the Defendant upon Plaintiff, it was liable to make payment after availing 60 days credit period by way of issuance of PDCs (Post dated cheques).
Be that as it may, even if it is presumed that defendant's liability to pay the amount had accrued only after the expiry of 60 days, in that event as well, I have no hesitation in holding that since that 60 days period had also expired long ago, hence, Plaintiff was well within its rights to claim the aforesaid interest rate on the actual dues outstanding against the defendant. As held supra, the sum total of the invoices placed on record, comes out to be Rs. 279878/-, however, as per the ledger account Ex. PW1/13, total outstanding against defendant was shown as Rs. 342594.87/- and defendant had not challenged or disputed the authenticity and genuineness of the same, hence, I have no CS(COMM)661/23 Chandrahas Kuchya Vs. Insta Power Limited Page 29 of 33 hesitation in holding that by not challenging the authenticity of said document, defendant was presumed to have conceded its correctness and genuineness.
Perusal of the record further reveals that along with its affidavit, the defendant had not placed on record, any affidavit of admission/denial of documents filed by the Plaintiff along with his Plaint, hence an adverse inference is liable to drawn against the defendant and it is presumed to have admitted all the documents of the Plaintiff by not specifically denying any of them.
So far as debit notes of the defendant are concerned, each one of them clearly reflects that those were issued allegedly in respect of over-pricing of the goods and none of them pertained to any deductions made on account of inferior quality or incomplete supply of the consignment. Furthermore, they do not depict any invoice number, nor any proof of delivery of same to the Plaintiff has been placed on record by the defendant, hence, same are not of any use and avail to the defendant.
However, so far as the recovery of an amount of Rs. 50,000/- allegedly paid by Plaintiff to IRP is concerned, I have no hesitation in holding that payment to IRP has to be made only after its appointment and as per the directions issued by Hon'ble NCLT and not before that. However, Plaintiff had miserably failed to place on record any order of appointment of IRP by NCLT, thus I have no hesitation in holding that, even if any such payment was made by Plaintiff to such IRP, same was not legally CS(COMM)661/23 Chandrahas Kuchya Vs. Insta Power Limited Page 30 of 33 recoverable by him from the defendant by any stretch of imagination. Accordingly the issue is answered in affirmative and decided in favour of the Plaintiff and against the Defendant, holding the Plaintiff entitled to recover an amount of Rs. 3,42,594/- being the principal outstanding amount along with Rs. 4,16,063.89 towards the simple interest @ 30 % per annum calculated w.e.f. 05.09.2019 till the date of filing of suit i.e. 22.12.2022 making it a total amount of Rs. 7,58,657.89/-.
Issue No. (ii) Whether the Plaintiff is entitled to claim the interest on suit amount, if so, at what rate? OPP Onus to prove this issue was also upon the plaintiff and in view of my aforesaid findings given to issue no. 1 above, this issue is also answered in affirmative and decided in favour of the plaintiff and against the defendant and it is hereby held that plaintiff shall be entitled to interest at the rate of 8% cent per annum on the aforesaid amount calculated at the rate of the normal interest offered by the nationalized banks on the FDs maintained with them. This interest shall be pendent elite and future payable from the date of the institution of the present suit till its actual realization.
Issue no. (iii) Whether the Plaintiff is guilty of suppression and concealment of material facts? OPD Onus to prove this issue was upon the Defendant, however, it had miserably failed to discharge this onus and to disclose as to which of the material fact was either suppressed or concealed by the Plaintiff in present plaint. Issue is accordingly CS(COMM)661/23 Chandrahas Kuchya Vs. Insta Power Limited Page 31 of 33 answered in negative and decided in favour of the Plaintiff and against the defendant.
Issue no. (iv) Whether the Suit of the Plaintiff is barred by limitation? OPD Onus to prove this issue was again upon the Defendant, who had categorically stated that since no business transactions had taken place after June 2017, and the present suit was filed in 2023, that is clearly after expiry of a period of three years from the date of accrual of cause of action, hence the suit was barred by limitation.
However, in view of the communication dated 03.05.2019, addressed by defendant to the Plaintiff, which was further reiterated in communication dated 09.05.2019, in which the defendant had mentioned about a sum of Rs. 1,16,922.02/- as its existing and admitted liability towards the Plaintiff without furnishing any accounts to substantiate the same, it could not be held to be a valid amount in respect of which the admission was so made. In case, if the defendant had substantiated the said admission with a cogent proof of its existing liability to the extent as claimed by it in its aforesaid communications, then its case would have been squarely covered by the judgments relied and cited upon by it before this court. Hence, if the limitation as per provisions of Section 18 of the Limitation Act is considered from that aspect, then I have no hesitation in holding that after giving the benefit of suspension of the period of limitation as per the directions of the Hon'ble Supreme Court, the present suit as filed by the Plaintiff was filed perfectly within the period of its CS(COMM)661/23 Chandrahas Kuchya Vs. Insta Power Limited Page 32 of 33 limitation and is not barred as such entailing its dismissal on this ground.
Accordingly, the issue is answered in negative and decided against the defendant and in favour of the plaintiff.
(vi) Relief.
18. In view of my findings given to all the issues above, suit of the plaintiff is decreed to the extent of Rs. 7,58,657.89/- along with costs and interest on the said amount @ 8 % per annum from the date of institution of the suit till its actual realization towards pendentelite and future interest in favour of the Plaintiff and against the defendant. Decree sheet be drawn accordingly.
19. File be consigned to record room after completion of necessary legal formalities in this regard.
ANNOUNCED IN THE OPEN COURT
DATED: 17.09.2025 Digitally signed
LOKESH by LOKESH
KUMAR
KUMAR SHARMA
SHARMA Date: 2025.09.17
17:39:25 +0530
(Lokesh Kumar Sharma)
District Judge (Commercial Court)-05
South/Saket/New Delhi
CS(COMM)661/23 Chandrahas Kuchya Vs. Insta Power Limited Page 33 of 33