Delhi District Court
Spg Comsumer Products Pvt Ltd vs Siddhi Gupta on 19 March, 2025
BEFORE THE COURT OF SH. SURINDER S. RATHI, DISTRICT JUDGE
(COMM.)-11 CENTRAL, THC, DELHI
CS Comm. No.612/2023
M/s SPG Consumer Products Pvt. Ltd.
Having its Registered Office
1167, IInd Floor, Kucha Mahajani
Chandni Chowk, New Delhi-110039 .........Plaintiff
Vs.
Siddhi Gupta
Through its Proprietorship Firm
M/s Ujjwal Kirana
Situated at:
NA, Rath Durga Chowk, Obra,
Aurangabad, Bihar-824124 ........Defendant
Date of Institution : 12.04.2023
Date of Final Arguments : 19.03.2025
Date of Judgment : 19.03.2025
Decision : Dismissed
Judgment
1. This suit is filed by plaintiff company for recovery of Rs.7,93,461/- with
18% interest as unpaid dues of goods sold.
Case of the Plaintiff
2. Case of the plaintiff as per plaint and the documents filed is that it is a
duly incorporated company and is in the business of manufacturing,
packaging, processing and marketing of fast moving consumer goods.
Defendant is proprietor of M/s Ujjwal Kiryana in Aurangabad, Bihar and
was desirous of purchasing consumer goods from the plaintiff. He
approached the plaintiff company for supply of goods. It was agreed that
the payments would be made within 45 days from the date of invoices.
CS Comm No.612/2023 page 1
M/s SPG Consumer Products Pvt. Ltd. Vs. Siddhi Gupta
Plaintiff supplied goods as per purchase orders raised. The sales were
carried out through four invoices issued between 27.11.2021 and
02.05.2022 cumulatively valuing Rs.88,81,707/-, although this figure is
not mentioned in the plaint.
3. All that the plaint states is that there was a debit balance of Rs.7,93,461/-
as per ledger. Defendant did not clear the dues despite requests made
through phone and email. The plaint mentions that defendant
acknowledged this debit balance but it is not explained as to how and by
what mode the acknowledgement was made. Plaintiff was constrained to
issue legal notice on 19.10.2022 which was neither replied nor complied
despite due service. Plaintiff was constrained to approach Central DLSA
for Pre-Institution Mediation under Section 12A of Commercial Courts
Act, 2015 where defendant did not appear or participate and Non-Starter
Report dated 08.02.2023 was issued. In this backdrop plaintiff was
constrained to file the suit in hand for following reliefs:
Prayer:
i. Pass a decree for Rs.7,93,461/- alongwith the interest @18% per annum till
realization thereof in favour of the plaintiff and against the defendant.
ii. Award interest both pendente lite and future on the suit amount as well as the
decreetal sum;
iii. Award cost in favour of the plaintiff;
iv. Pass any further order or orders as this Hon'ble Court may deem fit and proper in
the facts and circumstances of the present case.
4. Before the defendant was served Ld. Predecessor framed a preliminary
issue on territorial jurisdiction as under:
Preliminary Issue:
i. Whehter this Court has the territorial jurisdiction to try the present suit?
5. It was submitted on behalf of the plaintiff that payments were received by
the plaintiff in his State Bank of India, Chandni Chowk Branch through
CS Comm No.612/2023 page 2
M/s SPG Consumer Products Pvt. Ltd. Vs. Siddhi Gupta
RTGS. As such issue was left open by Ld. Predecessor and summons of
the suit was issued to the defendant.
6. Defendant was admittedly served on 22.08.2023 and WS was filed on
21.09.2023.
Defendant's Case
7. Case of the Defendant as per WS and the documents filed is that the suit
of the plaintiff deserves to be returned for want of territorial jurisdiction in
so far as defendant is based in Aurangabad, Bihar, he was approached by
the plaintiff's representatives available in Bihar and goods were supplied
by the plaintiff from Noida, UP. It is also pleaded that defendant made
payments through RTGS from Bihar.
8. Dismissal of the suit is also prayed on the ground that the suit is based on
wrong and concocted facts and has not been filed by a duly authorised
person. As per WS defendant is entitled to recover Rs.20,89,082/- from
the plaintiff qua which defendant has reserved his rights to sue the
plaintiff at Aurangabad, Bihar. It is further pleaded that plaintiff company
had supplied rice bran and honey without consent of the defendant in
April 2022 worth Rs.9,04,268/- and that goods worth Rs.8,66,693/- were
returned back by the defendant on the instructions of the plaintiff from
Patna by the defendant. It is pleaded that these transactions were not
reflected in the ledger account of the plaintiff as only a credit of
Rs.6,48,669/- was made and hence defendant is supposed to receive
Rs.2,17,923/- on this account.
9. On merits, defendant admits having business relations with the plaintiff. It
is pleaded that local employees of the plaintiff namely Mr. Deepak Sinha,
Zonal Sales Manager and Mr. Suraj Kumar, Area Sales Manager in
October 2021 and he was offered to become super stockist of the plaintiff.
He was asked to provide godown for stocking the goods of the plaintiff on
CS Comm No.612/2023 page 3
M/s SPG Consumer Products Pvt. Ltd. Vs. Siddhi Gupta
rent which was undertaken to be reimbursed by the plaintiff company. He
was also assured that he would be providing profit share @Rs.3.50 per
litre of mustard oil and rice bran oil supplied to retailors. He was assured
by representatives of the plaintiff that orders would be fetched from
retailors in Bihar and defendant would become the supplier. He was asked
to invest Rs.20 lakhs in the business under promise of handsome profit.
10.It is pleaded that defendant invested Rs. 20 lakhs on the asking of plaintiff
by making bank transfer into plaintiff company's account from Obra,
Bihar but he subsequently found that the goods supplied by the plaintiff
were not much in demand locally and sales order were not procured as
assured. Consequently, the stocks supplied and stocked by plaintiff
company in defendant's godown expired and hence could not be sold and
is still lying with the defendant which is valued Rs.4,76,984/-. This fact
was brought to the notice of plaintiff on 19.09.2022 via email but still
plaintiff did not take the stock back.
11.It is further pleaded by the defendant that local representatives of the
plaintiff compelled him to supply the goods through retailors in Bihar at a
rate which was much less than the purchase rate of defendant viz. Mustard
oil sold to by plaintiff to the defendant @Rs.180 per litre was supplied
@Rs.150 per litre thereby booking a loss of Rs.30 per litre. Plaintiff also
did not pay Rs.3.5 per litre profit in this transaction. Defendant was also
not paid sales discount margin worth Rs.2,81,511/-.
12.It is pleaded that defendant had asked the plaintiff company to enter into a
written agreement and he was assured that a contract would be executed
and signed but still nothing was done in this regard. It is pleaded that on
account of facts detailed above defendant suffered a loss of Rs.20-25
lakhs at the hand of plaintiff without earning any profit. Defendant was
constrained to notify the plaintiff that he will not be able to carry on
CS Comm No.612/2023 page 4
M/s SPG Consumer Products Pvt. Ltd. Vs. Siddhi Gupta
business and requested for settlement of accounts but the same was not
carried out at all.
13.It is further case of the defendant that he has not received payments of the
goods supplied in the local market on the asking of plaintiff company. It is
furter pleaded that rather plaintiff company took direct payments from
defendant's retailors agains the goods supplied by the defendant. It is
pleaded that defendant deserves recovery of Rs.9,28,664/- from local
retailors. It is pleaded that defendant suffered a loss of Rs.8,000/- as
godown rent since november 2021 and under this head plaintiff deserves
to pay him Rs.1.84 lakhs. Hence, in totality, he has suffered loss of
Rs.20,89,082/- at the hand of plaintiff company and its employees. The
WS has detailed following table:
Unrecovered amount against goods supplied to Rs.9,28,664/-
retailers as per instruction of plaintiff company
Expired stock lying in Godown Rs.4,76,984/-
Unpaid SD and profit margin Rs.2,81,511/-
Differential amount against returned stock Rs.2,17,923/-
Rent of Godown from Nov. 2021 till Sept. 2023 @ Rs.1,84,000/-
Rs.8,000/- per month
14.In his reply on merits defendant has admitted business relations with the
plaintiff company as detailed hereinabove in the judgment. He denies
approaching the plaintiff company in Delhi for carrying out purchase and
reiterated that it is plaintiff company's sales team who approached them in
Aurangabad, Bihar. Defendant does not deny receiving of goods worth
Rs.88,81,707/- through four invoices in question. It is, however, stated
that defendant do not owe Rs.7,93,761/- to the plaintiff and rather it is the
plaintiff company which owes Rs.20,89,082/- to the defendant. It is stated
that defendant has never acknowledged any liability to pay any amount to
the plaintiff as claimed. Defendant accepts that he has been making
CS Comm No.612/2023 page 5
M/s SPG Consumer Products Pvt. Ltd. Vs. Siddhi Gupta
payments to the plaintiff by bank transfer as pleaded. Defendant deny
receiving the legal notice. With these pleas dismissal of the suit is prayed.
15. Defendant has also placed on record certain invoices purportedly issued
by him to third parties allegedly on the asking of plaintiff, including
ledgers of retailors maintained by defendant apart from these two invoices
have been filed which were issued by defendant to another stockist of
plaintiff qua goods worth Rs.8,66,693/- out of stock worth Rs.9,04,268/-
qua which as per defendant no order was ever placed. Interestingly, while
claiming that plaintiff's ledger is false and fabricated and does not reflect
the correct picture but still defendant has not cared to file his own ledger
qua the business carried out by him with the plaintiff and for this
inference can be drawn under Section 119 of Bhartiya Sakshya
Adhiniyam, 2023 (Section 114 (g) of Indian Evidence Act). For ready
reference the same is reproduced hereunder:
Section 119 of Bhartiya Sakshya Adhiniyam, 2023: Court may
presume existence of certain facts
Illustration
The Court may presume-
(g) That evidence which could be and is not produced would, if produced, be unfavourable to
the person who withholds it;
16. In case titled Krishan Dayal Vs. Chandu Ram, 1969 SCC Latest
Caselaw 133 Del while discussing the effect of withholding of material
documents like account book it was observed that:
"Question then arises as to what is the effect of the withholding of material account
books. In this respect I find that according to illustration (g) under Section 114 of the
Evidence Act, the evidence which could be and is not produced would, if produced, be
unfavorable to the person who withholds it. The principle underlying the above
illustration has been applied by their Lordships of the Supreme Court in cases wherein a
party in possession of material document does not produce the same. It has accordingly
been held that the non-production of a material document by a party to a case would
make the Court draw an inference against that party.
A Division Bench of the Calcutta High Court (Mookerjee and Panton, JJ.) in the case of
Debendra Narayan Singh v. Narendra Narayan Singh and others held:- "In a suit for
accounts, the non-production of account books by the party who has custody of them
CS Comm No.612/2023 page 6
M/s SPG Consumer Products Pvt. Ltd. Vs. Siddhi Gupta
justifies the presumption under Section 114(g). Evidence Act, that they have been
withheld, because if produced, they would have been unfavorable to his case. If he is the
plaintiff and is claiming accounts though withholding papers, his suit is liable to be
dismissed.
(Emphasis Supplied)
17. In case titled Union of India Vs. Mahadeolal Prabhudayal, 1965 Latest
Caselaw 43 SC Hon'ble Supreme Court while discussing judgments
passed by Privy Counsel ruled that:
"If it is found that a party to a suit breaches its application to give full disclosure of
relevant facts and materials, the Court shall invoke the presumption attached to
Section 114(g) of the Evidence Act."
18.The affidavit of admission denial filed by defendant to plaintiff's
documents is not as per format provided under Order 11 Rule 4 CPC
and as such consequences as per Order 11 Rule 4 (3) and Order 11 Rule
4(6) CPC deserves to visit the defendant. Even the affidavit of admission
denial filed by defendant to plaintiff's documents has blank spaces in para
6.
Replication
19.Plaintiff had filed detailed replication. In its replication plaintiff has
reiterated its pleaded case and denied the contentions of the defendant
with a plea that the averments in the WS are false, bald and baseless and
have been introduced only to scuttle the claim of the plaintiff. It is
mentioned if there had been any creditbility in the submission of WS,
defendant would not have sat over the legal notice duly served upon him.
It is admitted that defendant was appointed as super stockist since 2021. It
is denied that defendant ever suffered losses as claimed. It is pleaded that
due rebates and discounts were provided to the defendant. It is pleaded
that plaintiff has never sent any material qua which no order was placed
since had this been so defendant would have reverted vide some notice,
letter or email which is not available. As per plaintiff when defendant
informed about his inability to sell certain goods, they were picked/taken
back from him and due credit note was issued. It is pointed out by Ld.
CS Comm No.612/2023 page 7
M/s SPG Consumer Products Pvt. Ltd. Vs. Siddhi Gupta
Counsel for plaintiff that in this regard a one time credit note for
Rs.6,48,769/- dated 16.08.2022 was issued as reflected in plaintiff's
ledger.
20.It is pleaded that defendant does not deserve any rent as claimed for the
godown since it was his duty to safe keep the stocks as a super stockist. It
is pleaded that defendant has failed to bring on record any evidence that
plaintiff supplied goods to him without order. Plaintiff has not specifically
denied the contetion of the defendant that he was promised profit of
Rs.3.50 per litre for sale of mustard and rice bran oil. Likewise, there is
no specific denial that plaintiff sold mustard oil to him @Rs.180 per litre
and was in turn asked to sell it to retailors at Rs.30 per litre loss
@Rs.150/- per litre.
21.In his affidavit of admission denial to defendant's documents by claiming
that they are all third party documents.
22.Preliminary issue dated 02.06.2023 qua territorial jurisdiction decided
vide detailed order in favour of plaintiff and against the defendant on
15.02.2024.
23.Upon completion of pleadings following issues were identified by Ld.
Predecessor on 23.02.2024:
Issues:
i. Whether the plaintiff is entitled to a decree for recovery of the suit amount?
OPP
ii. Whether the plaintiff is entitled to interest, if so, at what rate and for which
period? OPP
iii. Relief
24.To prove its case plaintiff examined PW1 Saroj Kumar Jena, an
employee of plaintiff. Vide affidavit Ex.PW1/A he deposed on the lines of
plaint and exhibited following documents:
1. Copy of Board Resolution dated 05.07.2022 is Ex.PW1/1;
2. Additional Certified True Copy of Board Resolution dated 05.07.2022
is Ex.PW1/1A;
CS Comm No.612/2023 page 8
M/s SPG Consumer Products Pvt. Ltd. Vs. Siddhi Gupta
3. Copy of Incorporation Certificate is Ex.PW1/2;
4. GST Certificate is Ex.PW1/3;
5. Master Data of plaintiff's company is Ex.PW1/4;
6. Photocopy of Ledger Account of Ujjwal Kirana is Ex.PW1/5;
7. Photocopy of E-mails sent to e-mail Id of the defendant is Ex.PW1/6;
8. Photocopy of Tax Invoices dated 27.11.2021, 13.03.2022, 08.04.2022
and 02.05.2022 are Ex.PW1/7 to Ex.PW1/10 (OSR);
9. Copy of Account Statement is Ex.PW1/11;
10. Copy of Legal Notice dated 19.10.2022 is Ex.PW1/12;
11. Copy of Postal Receipt and Tracking Report are Ex.PW1/13 &
Ex.PW1/14;
12. Copy of Bilties / Receipts are Mark A & Mark B;
13. Copy of Tax Invoice is Ex.PW1/17 (OSR).
25.He was cross-examined at length by Ld. Counsel for defendant wherein
he stated that he is working with plaintiff company as Account Executive
since February 2021. He accepted that he has not brought the minutes
book and the copy of the resolution passed by plaintiff's board does not
carry his acceptance signature. He admitted that in the course of business
plaintiff company used to appoint super-stockists in the market for its
products. He could not remember if defendant was also one of the super
stockist but accepted that this fact is admitted in the replication. He had
no personal knowledge about the business details between the plaintiff
and the defendant and he is deposing only as per record. He accepted that
the local employees of the plaintiff had approached defendant to offer him
to become super stockist. He identified Suraj Kumar as one of the
employees but could not say so about Deepak Sinha. He could nto
disclose the profit margin finalised between the parties as all the
discussions were carried out by local employees of the plaintiff.
26.All the orders were taken from retailors and supplied to the super stockists
by the plaintiff's employees. Defendant deposited Rs. 20 lakh advance to
the plaintiff before goods were supplied. Defendant never issued any
purchase order to the plaintiff as only instructions were issued to
plaintiff's local employees. He expressed unawareness if defendant was
asked to arrange for a godown on rent with an assurance that rent would
CS Comm No.612/2023 page 9
M/s SPG Consumer Products Pvt. Ltd. Vs. Siddhi Gupta
be reimbursed. As per him the company does not have this policy. He
denied that the goods supplied by the plaintiff were not of good quality
and there was no demand for the same.
27.He could neither admit nor deny that defendant had issued an email on
19.09.2022 requesting the plaintiff to take back the expired stock worth
Rs.4,76,189/-. He accepted the suggestion that defendant was constrained
to sell goods to retailors at a price lower than the price on the instructions
of plaintiff company. He could neither admit nor deny that plaintiff had
assured profit of Rs.3.50 per litre on sale of mustard oil and rice bran oil.
He accepted that certain amount of profit margins were fixed but he is not
aware of the details. He denied that defendant was not allowed the profits
as agreed. He could not admit or deny invoice Ex.PW1/9 whereby
defendant sold goods worth Rs.8,66,693/- to Aprajita Enterprises under
instructions of plaintiff's employees. As per him credit entry worth
Rs.6,48,769/- dated 16.08.2022 in ledger Ex.PW1/5 pertains to return of
certain goods. He denied the suggestion that this was a entry made for a
lesser amount and pertained to sale of goods worth Rs.8,66,693/- through
Aprajita Enterprises. He accepted that as a matter of practice employees
of the plaintiff company used to fetch orders from retailors and defendant
used to supply products to those retailors. He denied that it was duty of
the defendant to recover money from retailors and thereafter pay it to the
plaintiff.
28.He admitted that no written contract was signed between the parties. He
denied defendant suffered loss of Rs.20 lakhs at the hand of plaintiff due
to false assurances made to defendant or that plaintiff is liable to pay
Rs.20,89,082/- to the defendant. He accepted the suggestion that plaintiff
company had received various payments directly from the retailors qua
the goods supplied by the defendant. He accepted that plaintiff to the
CS Comm No.612/2023 page 10
M/s SPG Consumer Products Pvt. Ltd. Vs. Siddhi Gupta
defendant for the godown arranged by the defendant for stocking the
plaintiff's goods but denied the liability of the plaintiff company to pay
rent @Rs. 8,000/- per month from November 2021 onwards.
29.He accepted that ledger Ex.PW1/5 is neither signed by any official of the
plaintiff company nor bears any rubber stamp. He accepted that nothing
has been placed on record to show that plaintiff company ever informed
defendant about making of credit entries. He accepted that plaintiff
company had made entries of credit notes in the ledger but nothing in
placed on record to show that these entries were shared with the
defendant. He exoressed ignorance if any invoice was issued in the name
of Chander Vanshi Kiryana store in Aurangabad, Bihar. He denied that he
has no personal knowledge qua ledger entries or that the ledger does not
correctly reflect payments made by defendant's retailors directly to the
plaintiff. He accpeted that there is no written agreement of 45 days credit
period. He denied that it was orally agreed between the parties. He
accepted that the printout of email Ex.PW1/6 does not show any
attachment. He accepted that email dated 25.08.2022 collectively
exhibited as Ex.PW1/6 plaintiff demanded an amount of Rs.10,93,461/-
which in the email dated 11.01.2023 was reduced to Rs.8,43,461/-. He
accepted that this was done even though no payment was made by the
defendant to the plaintiff between dates i.e. 25.08.2022 and 17.02.2023.
The witness added that this amount was reduced since plaintiff company
directly received payments from defendant's retailors on defendant's
behalf.
30.He has denied the suggestion that emails (four) collectively Ex.PW1/6
were not served upon the defendant. It is interesting to observe that
although this suggestion has been put to PW1 and factum of receipt of
emails is denied in reply to para 6 but no reason is cited as mandated
CS Comm No.612/2023 page 11
M/s SPG Consumer Products Pvt. Ltd. Vs. Siddhi Gupta
under Order 8 Rule 3A CPC and as per new proviso added to sub rule 1
of Order 8 Rule 5 CPC as amended for Commercial Courts such facts
deemed to have been admitted by the defendant.
31.He accepted the suggestion that defendant did not make any payment after
issuance of legal notice. He accepted the suggestion that the amount
claimed by the plaintiff in the legal notice and the suit are different. He
denies that the suit is filed on the basis of fabricated entries. He conceded
that there is no written acknowledgement of debt of Rs.7,93,461/-. He
accepted that bank statement Ex.PW1/11 is not certified by the bank. As
per witness it was a printout taken from online portal of the bank. He
denied the suggestion that no legal notice was served upon the defendant.
He could not give breakup of amount received by the plaintiff company
from the defendant and the amount received from the third party clients of
the defendant directly.
32.Despite request by Ld. Counsel for defendant the witness failed to bring
on record the breakup of the amount. He accepted that plaintiff company
received Rs.1.50 lakhs from Saraswati Traders but expressed unawareness
that Saraswati Traders owed Rs.1,85,520/- to defendant. He denied the
suggestion that defendant did not sold any goods to M/s Chandervanshi
Kiryana Store nor raised any invoice. He stated that he is not aware about
the value of the damaged stock lying in the defendant's godown. He
accepted that as on date no goods are being sold by the plaintiff in Bihar
State.
33.At this stage, Ld. Counsel for defendant has drawn attention of this Court
to the objections raised by Ld. Counsel for defendant on the mode of
proof. Also an objection is taken qua placing of additional document on
record without permission. The first document objected is resolution of
the board of plaintiff company in favour of AR of the plaintiff Ex.PW1/1
CS Comm No.612/2023 page 12
M/s SPG Consumer Products Pvt. Ltd. Vs. Siddhi Gupta
which is a photocopy document. Admittedly neither the original copy of
the resolution was filed nor the original minute book was produced during
the evidence. The necessity for leading secondary evidence stands duly
established as per Section 64 (6) to proviso of the Bhartiya Sakshya
Adhiniyam, 2023 (Section 66 (6) of Indian Evidence Act). For ready
reference the same is reproduced hereunder:
"(6) When the person in possession of the document is out of reach of, or not subject to, the
process of the Court."
34.Even as per judgment of Hon'ble High Court of Delhi Prem Chand Jain
Vs. Shri Sri Ram, 2009 Latest Caselaw 4097 Del dated 12.10.2009 the
circumstances for permitting leading of secondary evidence have to be
portrayed on record and no necessary permission is required.
35.No circumstance has been shown to lead secondary evidence. In the
absence of any established circumstance which could allow plaintiff to
lead secodary evidence, this Court has left with no option but to deexbit
Ex.PW1/1 and convert it to Mark P1.
36.Connecting to the same the document Ex.PW1/1A which appears to be
originally signed and stamped extract of the same resolution of the Board
of plaintiff company dated 05.07.2022 whih was admittedly placed on
record without moving any application under Order 11 Rule 1 (5) CPC.
As per settled law even as per affidavit filed under Order 6 rule 15A (i)
CPC plaintiff has to vouch in para 5 as also in Order 11 Rule 1(3) CPC
that all the documents in his power, possession, control and custody have
been disclosed and copies thereof have been annexed with the plaint. The
only exception created is under Order 11 Rule 1 (4) CPC where plaintiff
seeks 30 days additional time for placing additional document on record.
Since this document was apparently placed on record on 09.04.2024 for
the first time even though the suit was filed on 12.04.2023, plaintiff was
under the law, supposed to move application under Order 11 Rule 1 (5)
CS Comm No.612/2023 page 13
M/s SPG Consumer Products Pvt. Ltd. Vs. Siddhi Gupta
CPC seeking permission of this Court to file additional document by
citing reasonable cause. During the course of hearing PW1 was asked to
bring the original resolution so as to justify the copy but admittedly the
original was not brought as per tendering of the evidence done on
09.04.2024 while certain other original documents were brought. Hence
this Court has no option but to deexhibit Ex.PW1/1A as well. More so
when Ex.PW1/1A is not the replica of Ex.PW1/1 in so far as rubber
stamp and signatures indicate that they were created and attested at
different points of time even if the typed content is identical.
37.Second objection taken is exbibition of ledger filed by plaintiff Ex.PW1/5
which is a one page document but even though Order 11 Rule 6 CPC as
amended for commercial suits provides filing of a detailed affidavit
containing the prerequisitsite. No such affidavit was filed. Ld. Counsel for
plaintiff has referred to Section 65B Indian Evidence Act certificate
dated 10.04.2023 but once the legislature in its wisdom provided for a
much detailed format for proof of electronic records. The law in this
regard is well settled.
38.In Commercial Courts, a new provision has been inducted in the form of
Order 11 Rule 6 CPC for proving the electronic record which is
reproduced hereunder for ready reference:
Order 11 Rule 6 CPC: Electronic records.-
(1) In case of disclosures and inspection of Electronic Records (as defined in the Information
Technology Act, 2000), furnishing of printouts shall be sufficient compliance of the above
provisions.
(2) At the discretion of the parties or where required (when parties wish to rely on audio or
video content), copies of electronic records may be furnished in electronic form either in
addition to or in lieu of printouts.
(3) Where Electronic Records form part of documents disclosed, the declaration on oath to
be filed by a party shall specify-
(a) the parties to such Electronic Record;
(b) the manner in which such electronic record was produced and by whom;
CS Comm No.612/2023 page 14
M/s SPG Consumer Products Pvt. Ltd. Vs. Siddhi Gupta
(c) the dates and time of preparation or storage or issuance or receipt of each such
electronic record;
(d) the source of such electronic record and date and time when the electronic record
was printed;
(e) in case of email ids, details of ownership, custody and access to such email ids;
(f) in case of documents stored on a computer or computer resource (including on
external servers or cloud), details of ownership, custody and access to such data on
the computer or computer resource;
(g) deponents knowledge of contents and correctness of contents;
(h) whether the computer or computer resource used for preparing or receiving or
storing such document or data was functioning properly or in case of malfunction that
such malfunction did not affect the contents of the document stored;
(i) that the printout or copy furnished was taken from the original computer or
computer resource.
(4) The parties relying on printouts or copy in electronic form, of any electronic records,
shall not be required to give inspection of electronic records, provided a declaration is
made by such party that each such copy, which has been produced, has been made from the
original electronic record.
(5) The Court may give directions for admissibility of Electronic Records at any stage of the
proceedings.
(6) Any party may seek directions from the Court and the Court may of its motion issue
directions for submission of further proof of any electronic record including meta data or
logs before admission of such electronic record.
39.Admittedly, defendant did not file any affidavit under Order 11 Rule 6
CPC. Upon promulgation of Information Technology Act in the year
2000 Section 65B was introduced for admissibility of electronic records
so as to grant admissiblity to electronic record. Submission of an affidavit
under Section 65B of Indian Evidence Act as per format provided under
Section 65B (4) is a prerequisite. For ready reference the same is
reproduced hereunder:
Section 65 B : Admissibility of Electronic Records
(4) In any proceedings where it is desired to give a statement in evidence by virtue of
this section, a certificate doing any of the following things, that is to say,-
(a) identifying the electronic record containing the statement and describing the
manner in which it was produced;
CS Comm No.612/2023 page 15
M/s SPG Consumer Products Pvt. Ltd. Vs. Siddhi Gupta
(b) giving such particulars of any device involved in the production of that
electronic record as may be appropriate for the purpose of showing that the
electronic record was produced by a computer;
(c) dealing with any of the matters to which the conditions mentioned in sub-
section (2) relate,
and purporting to be signed by a person occupying a responsible official
position in relation to the operation of the relevant device or the management
of the relevant activities (whichever is appropriate) shall be evidence of any
matter stated in the certificate; and for the purposes of this sub-section it
shall be sufficient for a matter to be stated to the best of the knowledge and
belief of the person stating it.
40.The law in this regard is well settled. In case titled Anvar P.V. Vs. P.K.
Basheer, 2014 Latest Caselaw 592 SC wherein Hon'ble Supreme Court
held as under:
"22.......An electronic record by way of secondary evidence shall not be
admitted in evidence unless the requirements under Section 65-B are satisfied.
Thus, in the case of CD, VCD, chip etc., the same shall be accompanied by the
certificate in terms of Section 65-B obtained at the time of taking the document,
without which, the secondary evidence pertaining to that electronic record, is
inadmissible."
(Emphasis Supplied)
41.In case titled Eli Lilly and Company and Anr. Vs. Maiden
Pharmaceuticals Limited, 2016 Latest Caselaw 6858 Del wherein
Hon'ble Delhi High Court held as under:
"17........At the time when documents including electronic record are filed, that
do not constitute evidence and become evidence only when they are tendered
into evidence and thus as per the aforesaid paragraphs also, the afffidavit
under Section 65B has to be filed at the time of tendering the electronic record
into evidence.......
18. Through the ratio of Anvar P.V. supra, to me, appears to require the
certificate/affidavit under Section 65B of the Evidence Act to accompany the
electronic record."
42.Even persual of Section 65B Evidence Act certificate shows that it does
not comply and carry the requisite information as mandated under Section
65B. Moreover this document is neither signed by any accountant or the
AR or the CS of the plaintiff company and also does not bear stamp of the
plaintiff company. Hence in the absence of requisite affidavit under
Order 11 Rule 6 CPC, the genuineness of printout of the electronic
ledger does not inspire confidence and is found to be not proved in terms
CS Comm No.612/2023 page 16
M/s SPG Consumer Products Pvt. Ltd. Vs. Siddhi Gupta
of Section 2 of Bhartiya Sakshya Adhiniyam, 2023 (Section 3 of
Indian Evidence Act, 1872).
43. In case titled Ambalal Sarabhai Enterprises Ltd. Vs. K. S. Infraspace
LLP and Another, 2020 Latest Caselaw 3 SC, Hon'ble Supreme Court
held that:
"21. A perusal of the Statement of Objects and Reasons of the Commercial
Courts Act, 2015 and the various amendments to Civil Procedure Code and
insertion of new rules to the Code applicable to suits of commercial disputes
how that it has been enacted for the purpose of providing an early disposal of
high value commercial disputes. A purposive interpretation of the Objects and
Reasons and various amendments to Civil Procedure Code leaves no room for
doubt that the provisions of the Act require to be strictly construed. If the
provisions are given a liberal interpretation, the object behind constitution of
Commercial Division of Courts, viz. Putting the matter on fast track and speedy
resolution of commercial disputes, will be defeated. If we take a closer look at
the Statement of Objects and Reasons words such as 'early' and 'speedy' have
been incorporated and reiterated. The object shall be fulfilled only if the
provisions of the Act are interpreted in a narrow sense and not hampered by
the usual procedural delays plaguing our traditional legal system."
(Emphasis Supplied)
44.Defendant has examined himself as DW1 Siddhi Gupta. Vide affidavit
Ex.DW1/A he deposed on the lines of WS and exhibited following
documents:
i. Tax Invoice dated 16.05.2022 for Rs.4,39,611/- is Ex.DW1/1.
ii. Tax Invoice dated 29.07.2022 for Rs.4,27,082/- is Ex.DW1/2.
iii. Ledger of Shree Radhe Enterprises is Ex.DW1/3 is now de-exhibited as Mark A as
the ledger has been burnt in fire in office and godown of defendant on 23.09.2024.
iv. Tax Invoices dated 17.12.2021, 10.01.2022, 21.03.2022, 08.06.2022 and 12.09.2022
are Ex.DW1/4 (Colly.).
v. Ledger of Jai Maa Amber Enterprises is Ex.DW1/5 is now de-exhibited as Mark B as
the ledger has been burnt in fire in office and godown of defendant on 23.09.2024.
vi. Tax Invoices dated 22.03.2022 and 31.03.2022 are Ex.DW1/6 (Colly.).
vii. Ledger of Saraswati Traders is Ex.DW1/7 is now de-exhibited as Mark C as the
ledger has been burnt in fire in office and godown of defendant on 23.09.2024.
viii.Tax Invoices dated 06.06.2022, 24.06.2022, 26.07.2022 and 22.08.2022 are
Ex.DW1/8 (Colly.).
ix. Ledger of Vikas Ji is Ex.DW1/9 is now de-exhibited as Mark D as the ledger has
been burnt in fire in office and godown of defendant on 23.09.2024.
x. Tax Invoices dated 23.07.2022 and 24.07.2022 alongwith E-way Bills are Ex.DW1/10
(Colly.).
xi. Ledger of Yeti Enterprises is Ex.DW1/11 is now de-exhibited as Mark E as the ledger
has been burnt in fire in office and godown of defendant on 23.09.2024.
xii. Tax Invoice dated 04.02.2022 is Ex.DW1/12.
xiii.Ledger of Jai Mata De is Ex.DW1/13 is now de-exhibited as Mark F as the ledger has
been burnt in fire in office and godown of defendant on 23.09.2024.
CS Comm No.612/2023 page 17
M/s SPG Consumer Products Pvt. Ltd. Vs. Siddhi Gupta
xiv. Tax Invoices dated 20.08.2022 and 03.07.2022 alongwith E-way Bills is Ex.DW1/14
(Colly.).
xv. Ledger of Gungun Enterprises is Ex.DW1/15 is now de-exhibited as Mark G as the
ledger has been burnt in fire in office and godown of defendant on 23.09.2024.
xvi. Tax Invoices dated 23.12.2021, 12.01.2022, 17.03.2022, 05.05.2022 and 19.08.2022
are Ex.DW1/16 (Colly.).
xvii. Ledger of Vikas General is Ex.DW1/17 is now de-exhibited as Mark H as the ledger
has been burnt in fire in office and godown of defendant on 23.09.2024.
xviii.Tax Invoice dated 22.05.2022 is Ex.DW1/18.
xix. Ledger of Umang Enterprises is Ex.DW1/19 is now de-exhibited as Mark I as the
ledger has been burnt in fire in office and godown of defendant on 23.09.2024.
xx. Tax Invoice dated 13.04.2022 is Ex.DW1/20.
45.He was not cross-examined by Ld. Counsel for plaintiff and his evidence
has remained unrebutted and uncontroverted.
46.Second witness examined by defendant is DW2 Suraj Kumar, Sales
Manager of the plaintiff company. Since he was a summoned witness no
separate affidavit in chief was filed. He stated that he used to work for the
plaintiff company as Sales manager but resigned about a year ago. He was
responsible for all the dealings between plaintiff company and the
defendant alongwith Sh. Deepak Kumar who was his senior and Zonal
Sales Manager. He stated that they on behalf of plaintiff company had
appointed defendant as a super stockist for Aurangabad, Bihar. For this
defendant had invested Rs 20 lakhs initially and was assured a profit
margin of Rs. 3 per litre as commission for sale of all kinds of oils. As a
super stockist defendant was supposed to stock plaintiff's goods and
mercandise in his godown for supplying to the prospective buyers as per
orders to be procured by employees of the plaintiff.
47.He added that for the sales carried out in this manner plaintiff company
used to directly receive payments fromm customers in most of the cases
qua the goods supplied by the defendant on plaintiff's asking. As per him
plaintiff company neither paid any commission to the defendant nor
settled his accounts. As per DW2 owing to inferior quality of goods
supplied by the plaintiff several complaints were received from the market
and customers. After the defendant no super stockist was appointed in
CS Comm No.612/2023 page 18
M/s SPG Consumer Products Pvt. Ltd. Vs. Siddhi Gupta
Bihar nor plaintiff is supplying any material in Bihar. The witness added
that the plaintiff company has several disputes with its customers and
stockist on account of non-settlement of accounts. He aired his own
grievance that he has not been paid his salary to the tune of Rs. 5 lakhs.
Likewise, salary of several other employees has been withheld by the
plaintiff company.
48.He resigned from the plaintiff company as it was harming his reputation
on accunt of non-settlement of accounts with the super stockists. He
admitted that expired stocks of plaintiff was lying with the defendant's
godown which were not taken back despite several requets made by him
with the plaintiff. He concluded that according to him defendant deserves
to be paid money by the plaintiff company. He cited one such case where
a similar stockist in Patna got an FIR registered against plaintiff's director
and the matter was settled by the plaintiff company by paying Rs. 2 crores
to the stockist. Even DW2 was not cross-exanined on behalf of plaintiff
company despite grant of opportunity and his evidence has remained
unrebutted and uncontroverted.
49. I have heard arguments of Sh. Bikram Singh Patel, Ld. Counsel for
plaintiff and Sh. Dharmendra Kumar, Sh. Shashi Bhushan and Sh.
Pramod Kumar, Ld. Counsels for defendant. I have perused the case file
carefully.
50.Now I shall dispose of individual issues framed in this case.
Issue No.1:
i. Whether the plaintiff is entitled to a decree for recovery of the suit amount?
OPP
51.At the onset it would be appropriate to cull out facts admitted by both the
sides in the pleadings as well as during the course of trial. It is admitted
case of both the sides that plaintiff company is manufacturer and supplier
of fast moving consumer goods having registered office at Chandni
CS Comm No.612/2023 page 19
M/s SPG Consumer Products Pvt. Ltd. Vs. Siddhi Gupta
Chowk, New Delhi and defendant is proprietor of M/s Ujjwal Kirana at
Aurangabad, Bihar. Both the sides had business relations between
November 2021 and May 2022 whereunder goods worth Rs.88,81,707/-
was supplied by the plaintiff to the defendant vide 4 invoices Ex.PW1/7
to Ex.PW1/10 dated 27.11.2021, 13.03.2022, 08.04.2022 and 02.05.2022.
Although plaint is silent qua specific nature of the relationship and is
drafted in such a manner that it is a case of standalone sale of goods
through four invoices but when the defendant specifically pleaded that the
relationship between the two were not of simple seller and buyer but
rather defendant was appointed a super stockist by the plaintiff company
for its products in Aurangabad, Bihar. In the replication plaintiff company
accepted this proposition and admitted that defendant was actually
appointed a super-stockist although no standalone written contract or
MoU was entered. Admittedly, defendant invested/paid an advance sum of
Rs. 20 lakhs to the plaintiff for supply of goods.
52.It is evident that the manner in which plaint is drafted, the same is ex-
facie marred with concealment of material facts vis-a-vis the specificity of
relationship between the plaintiff company and the defendant. As
mentioned supra, plaint has been drafted as a simple case of sale of goods
and non-payment but the factum of plaintiff appointing defendant as
super-stockist in Aurangabad, Bihar has not been shared therein. It is also
concealed in the plaint that defendant had paid an advance amount of Rs.
20 lakhs i.e Rs. 5 lakhs on 30.10.2021 and Rs.15 lakhs on 16.11.2021, by
bank transfer even before the first invoice out of the 4 was issued on
27.11.2021.
53.Other important fact which is concealed in the plaint is that it was the
employees of the plaintiff who were supposed to procure orders of sale of
plaintiff's goods which were to be supplied by the defendant. Another
CS Comm No.612/2023 page 20
M/s SPG Consumer Products Pvt. Ltd. Vs. Siddhi Gupta
important fact concealed is that such buyers, as arranged by employees of
the plaintiff, were supposed to make payments directly to the plaintiff
company and not to the defendant, despite the fact that goods were sold
and supplied by the defendant.
54.Apart from concealment PW1, has himself deposed that it is the plaintiff
company which approached the defendant for becoming a super stockist
and no other way round as mentioned in the plaint. Likewise, the plea that
defendant placed purchase orders witht he plaintiff is also belied by PW1
when he stated that no purchase order was received from the defendant
and rather it is the plaintiff which supplied the stocks as per instructions
received from plaintiff's employee from Aurangabad, Bihar. Likewise, the
fact that defendant was asked/made to supply goods to retailors at a price
which was much lesser than the price at which plaintiff sold the goods to
the defendant thereby incurring huge losses viz. Plaintiff sold mustard oil
and rice bran oil @ Rs.180 per litre and plaintiff asked the defendant to
sell it to retailors @ Rs.150 per litre. This fact duly mentioned in the WS
has not been denied by the plaintiff in the replication as per Order 8 Rule
3A CPC and Order 8 Rule 5 CPC as applicable for Commercial Courts.
55.As per Order 8 Rule 5 CPC when read in the context of the suit in hand
categorically shows that the evasive denial by the defendant shall lead to
an inference that the defendant has admitted the contents of the plaintiff's
plaint. For ready reference Order 8 Rule 5 CPC and Order 8 Rule 3A
CPC are reproduced hereunder:
Order 8 Rule 5 CPC: Specific Denial
1."Every allegation of fact in the plaint, if not denied specifically or by necessary
implication, or stated to be not admitted in the pleading of the defendant, shall be taken to be
admitted except as against a person under disability:
Provided that the Court may in its discretion require any fact so admitted to be proved
otherwise than by such admission.
CS Comm No.612/2023 page 21
M/s SPG Consumer Products Pvt. Ltd. Vs. Siddhi Gupta
Provided further that every allegation of fact in the plaint, if not denied in the manner
provided under rule 3A of this Order, shall be taken to be admitted except as against a
person under disability."
Order 8 Rule 3A CPC: Denial by the defendant in suits before
Commercial Division of the High Court or the Commercial Court--
i. Denial shall be in the manner provided in sub-rules (2), (3), (4) and (5) of this
Rule.
ii. The defendant in his written statement shall state which of the allegations in the
particulars of plaint he denies, which allegations he is unable to admit or deny, but
which he requies the plaintiff to prove, and which allegations he admits.
iii. Where the defendant denies an allegation of fact in a plaint, he must state his
reasons for doing so and if he intends to put forward a different version of events
from that given by the plaintiff, he must state his own version.
iv. If the defendant disputes the jurisdiction of the Court he must state the reasons for
doing so, and if he is able, give his own statement as to which Court ought to have
jurisdiction.
v. If the defendant disputes the plaintiff's valuation of the suit, he must state his
reasons for doing so, and if he is able, give his own statement of the value of the
suit."
56. In case titled Sh. Rajeev Tandon and Anr. Vs. Smt Rashmi Tandon, 2019
Latest Caselaw 1306 Del dated 28.02.2019 Hon'ble Delhi High Court held
that:
" The substance of the actual defence of the defendant from a perusal of the written
statement is that the property in question has been purchased from the joint family
fund obtained from the joint family business belonging to the father of the parties.
It is also stated that the suit property was brought from the funds generated after
disposal of the joint family property in which the defendant had an equal share
and entitlement. This is the sum and substance of the defence raised by the
defendant in her written statement. It is manifest that the defence is vague, evasive
and lacks material particulars. Under 8 Rule 3 CPC, a defendant is obliged to
deal specifically with each allegation of fact of which he does not admit the truth.
Similarly, under Order 8 Rule 4 CPC, if a defendant denies an allegation of fact,
he must not do so evasively but answer the point of substance. In the present case,
the denials are evasive and cannot be said to be a specific response."
57. In case titled Thangam and Anr. Vs. Navamani Ammal, 2024 Latest
Caselaw 132 SC dated 04.03.2024 Hon'ble Supreme Court held that:
"Order 8 Rules 3 and 5 CPC clearly provides for specific admission and denial
of the pleadings in the plaint. A general or evasive denial is not treated as
sufficient. Proviso to Order 8 Rule 5 CPC provides that even the admitted facts
may not be treated to be admitted, still in its discretion the Court may require
those facts to be proved. This is an exception to the general rule. General rule is
that the facts admitted, are not required to be proved."
CS Comm No.612/2023 page 22
M/s SPG Consumer Products Pvt. Ltd. Vs. Siddhi Gupta
58.It is pertinent to mention here that as per Order 6 Rule 15A and Order 11
Rule 3 CPC, template of statement of truth has Appendix I requires a
declaration on oath as under:
4. I say that there is no false statement or the concealment of any material
fact, document or record and I have included information that is according to
me, relevant for the present suit.
59.Upon comparison of para 4 in affidavit of statement of truth filed on
behalf of the plaintiff company it is found that the reference of declaration
qua concealment of fact has been omitted in totality. On account of the
above gross flaw in the format of the statement of truth it deserves to be
rejected in toto.
60.In case titled Prayag Polytech Pvt. Ltd. and Anr. Vs. Raj Kumar
Tulsian of Hon'ble Division Bench dated 19.09.2024 in FAO (Comm.)
182/2023 Hon'ble High Court held that as under:
8."......A strict interpretation were to be applied thereby mandating the
nature and form of verification of pleadings as per Order VI Rule 15A CPC,
that by necessary implication, would only warrant an order rejecting the
plaint..............We find that the effect of such defects in the pleadings is
provided for in the same provision itself, to the effect that the Court may
strike out a pleading that is not verified by the Statement of Truth i.e. the
affidavit set out in the Appendix. In other words, where the pleading is not
verified in accordance with sub-rule (1) the party may not be permitted to
rely upon the said pleading in evidence........
61.In case titled Oil and Natural Gas Corporation Limited Vs. Planetcast
Technologies Ltd. MANU/DE/8890/2023 dated 19.12.2023 wherein
Division Bench of Hon'ble High Court of Delhi while discussing the
provision of Order 6 Rule 15A CPC in an arbitration matter observed:
43. Section 15A of CPC as amended under Commercial Courts Act,
therefore, requires that a pleading has to be mandatorily supported by a
duly attested affidavit by way of verification failing which the said
pleading shall not be permitted to be read as evidence of any manner set
out therein. It further provides that any pleadings not verified by a
statement of truth, namely, the affidavit may be struck off by the Court. It
is, therefore, evident that the affidavit by way of the Statement of Truth is
mandatorily required to be filed alongwith the petition in order to be a
document worth considering under the law.
CS Comm No.612/2023 page 23
M/s SPG Consumer Products Pvt. Ltd. Vs. Siddhi Gupta
62.In case titled "Unilin Beheer B. Vs. Balaji Action Buildwell" 2019
Latest Caselaw 2540 Del, the Hon'ble High Court of Delhi dealt in detail
with Rules 3 and 4 of Chapter VII titled "Appearance by defendant,
written statement, set off, counter claim and replication" of the High
Court Rules and it was held-
"In the event of written statement being filed without affidavit of admission/denial of
documents, not only shall the written statement be not taken on record but the
documents filed by the plaintiff shall also be deemed to be admitted and on the basis of
which admission the court shall be entitled to proceed under Order 8 Rule 10 CPC.
63. Similarly, in case titled "Brijesh Kumar Agarwal and Ors. Vs.
IFCI Factors Ltd." 2021 Latest Caselaw 468 Del, it was held:
"This court is also of the prima facie opinion that since the appellants written
statement was not accompanied by admission/denial of documents, it should not have
been looked into by Ld. Single Judge in view of judgment in Unilin Beheer B. Vs.
Balaji Action Buildwell (Supra) and Chapter VII Rule 4 of Delhi High Court(original
side) Rules 2018."
64.Owing to the above concealemnt which goes to the root of the matter of
the fact that statement of truth is defective, the salutory judgments of
Hon'ble Supreme Court qua treating a litigant approaching the Court with
unclean hands pitches in. Even though sale and supply of goods worth
Rs.88 lakhs has been admitted by the defendant, the fact that plaintiff had
been collecting the money from defendant's client directly vitiates the
plaintiff's enntire claim. Even otherwise the ledger filed and relied has
been deexhibited for defects in mode of proof. Not only PW1 has
highlighted the concealments in the plaint but DW2 Suraj Kumar who
was Sales Manager of the plaintiff company when it appoinnted defendant
as a super stockist for Aurangabad, Bihar has made cascading remarks
about the business culture of the plaintiff. Even though much cannot be
read into the statement of DW2 since he himself admitted that he bears
grudge against the plaintiff company for withholding Rs.5 lakhs salary but
CS Comm No.612/2023 page 24
M/s SPG Consumer Products Pvt. Ltd. Vs. Siddhi Gupta
it is denied that he was the representative of the plaintiff company when
the business was carried out with the defendant.
65.This fact cannot be overlooked that despite opportunity neither the
defendant who stepped into the witness box as DW1 Siddhi Gupta nor
DW2 Suraj Kumar were cross-examined at all by the plaintiff.
66.In view of the above I have no hesitation in concluding that plaintiff do
not deserve any relief from the Court and has miserably failed to make a
case for proving the onus placed on it. This issue is accordingly
answered against the plaintiff and in favour of defendant.
Issue No. 2:
ii. Whether the plaintiff is entitled to interest, if so, at what rate and for
which period? OPP
67.In the light of decision of issue no. 1, once the suit is found to be not
proved, question of plaintiff's entitlement to seek interest also does not
arise.
68.Ld. counsel for defendant submits that plaintiff's entire suit was
misconceived and marred with deliberate concealments and defendant
was constrained to defend this suit for more than 2 years.
69. Hon'ble Supreme Court has ruled that Court should be at guard against
litigants engaged in clever drafting and creating illusions of cause of
action by suppressing the material facts and camouflaging the pleadings.
In case titled ITC Ltd. Vs. Debt Recovery Appellate Tribunal, 1997
Latest Caselaw 869 SC Hon'ble Apex Court held,
"Law cannot permit clever drafting which creates illusions of a cause of action.
What is required is that a clear right must be made out in the plaint. If however, by
clever drafting of the plaint, it has created the illusion of a cause of action, it should
be nipped in the bud, so that bogus litigation will end at the earliest state. The Court
must be vigilant against any camouflage or suppression, and determine whether the
litigation is utterly vexatious, and an abuse of the process of the Court."
(Emphasis Supplied)
CS Comm No.612/2023 page 25
M/s SPG Consumer Products Pvt. Ltd. Vs. Siddhi Gupta
70. In case titled C.B. Aggarwal Vs. P. Krishna Kapoor, 1994 Latest
Caselaw 764 Del Hon'ble Delhi High Court observed:
"It is true that in a civilised society, legal process is the machinery for keeping
order and doing justice. It can be used properly or it can be abused. It is used
properly when it is invoked for vindication for men's right and enforcement of just
claims. It is abused when it is diverted from its true course so as to serve extortion
or oppression; or to exert pressure so as to achieve an improper end."
In case titled Curtis-Raleighquoted in Jennison v. Baker (1972) 1 All ER 997 at p.
1006. it is said "The law should not be seen to sit by limply, while those who defy
it go free, and those who seek its protection lose hope".
71. In Kishore Samrite Vs. The State of UP, 2012 Latest Caselaw 606 SC,
Hon'ble Supreme Court expounded that:
"As and when the Courts found that a litigating party is abusing the Court process
and had approached the Court with unclean hands without disclosing complete
facts, they shall be burdened with exemplary and deterrent cost. In the cited case
while observing that the petitioner have misused the judicial process, a cost of Rs.5
lacs was imposed."
72. In case titled S.P. Chengalvaraya Naidu (Dead) by LRs Vs. Jaganath
(Dead) LRs and ors. 1993, Latest Caselaw 451 SC, Hon'ble Supreme
Court observed :
"The Courts of Law are meant for imparting justice between the parties. One who
comes to the court , must come with clean hands. We are constrained to say that
more often then not, process of the court is being abused. Property - grabbers tax-
evaders, bank-loan-dodgers and other unscrupulous persons from all walks of life
find the court process a convenient level to retain the illegal gains indefinitely. We
have no hesitation that a person whose case is based on falsehood has no right to
approach the court. He can be summarily thrown out at any stage of litigation."
73. In case titled Goyal MG Gases Pvt. Ltd. Vs. AIR Liquide Deutschland
th Gmbh & Ors., 2006 Latest Caselaw 1866 Del Hon'ble Delhi High
Court held that:
"Vexatious and frivolous litigation poses a number of threats to the efficient
operation of any civil justice system. Those threats stem from the manner in which
the vexatious and frivolous litigant conducts litigation before the courts. Such
proceedings, apart, from the oppression and the harassment inflicted on the
adversary, are extremely damaging to public interest. Judicial resources are
valuable and scarce. The resources of the court are not infinite, especially in
terms of judicial time. Therefore, administration of justice and interests of equity
and fair play mandate that a party which succeeds is compensated by award of
costs in respect of false or vexatious claims or defences. A faulting party may be
required to pay to the other party such costs as would, in the opinion of the
court, be reasonably sufficient to reimburse the other party in respect of the
expenses incurred by him in attending the court on that date and payment of such
CS Comm No.612/2023 page 26
M/s SPG Consumer Products Pvt. Ltd. Vs. Siddhi Gupta
costs on the next date following the date of such order if unreasonable
adjournments are taken by the parties.
However, many unscrupulous parties take advantage of the fact that either costs
are not awarded or nominal costs alone are awarded against the unsuccessful
party.
The legislature has recognised the need for imposition of costs and consequently,
so far as the civil proceedings are concerned, has enacted Section 35 of the Code
of Civil Procedure which provides for imposition of costs. The Apex Court was
concerned with the manner in which the costs are imposed resulting in undue
advantage being taken by parties of the fact that notional costs are awarded
which do not deter or discourage persons from filing vexatious or frivolous
claims or defences. ................ The courts have recognised the inherent power of
the court to award costs in the interest of justice. .................................... In this
background, there is yet another more imperative reason which necessitates
imposition of costs. The resources of the court which includes precious judicial
time are scarce and already badly stretched. Valuable court time which is required
to be engaged in adjudication of serious judicial action, is expended on frivolous
and vexatious litigation which is misconceived and is an abuse of the process of
law. A judicial system has barely sufficient resources to afford justice without
unreasonable delay to those having genuine grievances. Therefore, increasingly,
the courts have held that such totally unjustified use of judicial time has to be
curbed and the party so wasting precious judicial resources, must be required to
compensate."
74. In Jagmal Singh Vs. Delhi Transport Corporation, 1995 Latest
Caselaw 572 Del, Delhi High Court observed thus:-
"We are firmly of the view that petitioner has resorted to the dilatory tactics
hereby crippling the progress of the departmental enquiry pending against him
for the last about eight long years. It is not only unfortunate but matter of
concern to all of us being the members of the society, that the petitioner by
indulging in this type of frivolous litigation has not only wasted his time and
money but has also wasted the time of the court and other public functionaries
thereby causing unnecessary drain on the resources of public exchequer whose
coffers are filled in by poor people's money. In such a case with a view to
discourage frivolous litigation, it becomes our duty not only to see that the
petitioner is saddled with exemplary costs but also to ensure that he gets no
benefit on account of the delay caused by him in the departmental enquiry
pending against him."
75. In Vinod Seth Vs. Devinder Bajaj, 2010 Latest Caselaw 435 SC it was
ruled that the provision for costs is intended to achieve the following
goals:
"It should act as a deterrent to vexatious, frivolous and speculative litigations
or defenses. The specter of being made liable to pay actual costs should be such,
as to make every litigant think twice before putting forth a vexatious, frivolous or
speculative claim or defense.
Costs should ensure that the provisions of the Code, Evidence Act and
CS Comm No.612/2023 page 27
M/s SPG Consumer Products Pvt. Ltd. Vs. Siddhi Gupta
other laws governing procedure are scrupulously and strictly complied with and
that parties do not adopt delaying tactics or mislead the Court.
Costs should provide adequate indemnity to the successful litigant to
adopt alternative dispute resolution processes and arrive at a settlement before
the trial commences in most of the cases. In many other jurisdictions, in view of
the existence of appropriate and adequate provisions for costs, the litigants are
persuaded to settle nearly 90% of the civil suits before they come up to trial.
The provisions relating to costs should not, however, obstruct access to
courts and justice. Under no circumstances, the costs should be a deterrent, to a
citizen with a genuine or bonafide claim, or to any person belonging to the
weaker sections whose rights have been affected, from approaching the courts.
At present these goals are sought to be achieved mainly by Section 35, 35A and
35B read with the relevant civil rules of practice relating to taxing of costs.
That Section 35B CPC providing for costs for causing delay is seldom
invoked and that it should be regularly employed to reduce delay.
76. A classic case where Hon'ble Supreme Court, in an extremely well-
articulated Judgment dwelled on the need for curbing unscrupulous
litigation is Ramrameshwari Devi & Ors. Vs. Nirmala Devi & Ors.,
2011 Latest Caselaw 444 SC where it was inter-alia observed as under:
34. "According to Dr. Mohan, in our legal system, uncalled for litigation
gets encouragement because our courts do not impose realistic costs.
The parties raise unwarranted claims and defences and also adopt
obstructionist and delaying tactics because the courts do not impose
actual or realistic costs. Ordinarily, the successful party usually remains
uncompensated in our courts and that operates as the main motivating
factor for unscrupulous litigants. Unless the courts, by appropriate orders
or directions remove the cause for motivation or the incentives, uncalled
for litigation will continue to accrue, and there will be expansion and
obstruction of the litigation. Court time and resources will be consumed
and justice will be both delayed and denied........
45.We are clearly of the view that unless we ensure that wrong- doers are
denied profit or undue benefit from the frivolous litigation, it would be
difficult to control frivolous and uncalled for litigations. In order to curb
uncalled for and frivolous litigation, the Courts have to ensure that there
is no incentive or motive for uncalled for litigation. It is a matter of
common experience that Courts otherwise scarce and valuable time is
consumed or more appropriately wasted in a large number of uncalled
for cases.
54. While imposing costs we have to take into consideration pragmatic
realities and be realistic what the defendants or the respondents had to
actually incur in contesting the litigation before different courts. We have to also broadly take into consideration the prevalent fee structure of the lawyers and other miscellaneous expenses which have to be incurred towards drafting and filing of the counter affidavit, miscellaneous charges towards typing, photocopying, court fee etc.
55. The other factor which should not be forgotten while imposing costs is CS Comm No.612/2023 page 28 M/s SPG Consumer Products Pvt. Ltd. Vs. Siddhi Gupta for how long the defendants or respondents were compelled to contest and defend the litigation in various courts. The appellants in the instant case have harassed the respondents to the hilt for four decades in a totally frivolous and dishonest litigation in various courts. The appellants have also wasted judicial time of the various courts for the last 40 years.
56. These appeals are consequently dismissed with costs, which we quantify as Rs.2,00,000/-. We are imposing the costs not out of anguish but by following the fundamental principle that wrongdoers should not get benefit out of frivolous litigation.
Though the Court has expressed that it is imposing cost not out of anguish, yet the observations as highlighted above clearly portray the miserable state of affairs and courts distress on the situation of mounting frivolous litigations.
77.In view of the above discussion, this Court has no hesitation in concluding that plaintiff company has miserably failed to discharge the onus of proving this case and suit of the plaintiff is accordingly dismissed with cost and additional cost of Rs.50,000/- is imposed on the plaintiff out of which Rs.25,000/- to be deposited with Advocates' Welfare Fund, Delhi Bar Association and Rs.25,000/- shall be paid to defendant.
78.Decree Sheet be prepared accordingly. File be consigned to Record Room after due compliance. Digitally signed by SURINDER S SURINDER RATHI S RATHI Date:
2025.04.02 15:05:42 +0530 (SURINDER S. RATHI) District Judge, Commercial Court -11 Central District, THC Delhi/19.03.2025 CS Comm No.612/2023 page 29 M/s SPG Consumer Products Pvt. Ltd. Vs. Siddhi Gupta