Final Order 23

Order Details: COPY OF JUDGMENT
Pdf Text: IN THE COURT OF SANJEEV KUMAR MALHOTRA
DISTRICT JUDGE (COMMERCIAL COURT)
NORTH EAST: KARKARDOOMA COURTS: DELHI
CS (Comm.) 71/24
CNR No.DLNE01-001985-2024
Mohd. Amir,
Proprietor of SCAFF.STEEL
Having its shop at:
Shop No.3, Ground Floor,
Loha Market, Welcome, Seelampur,
Delhi-110053 ....Plaintiff
Versus
Sh. Diwan Singh Yadav
(Proprietor of Om Sai Shuttering Store)
Office at: U-63A, Phase-I, Main 40
Foot Road, Palam Vihar, Gurugram,
Haryana-122001.
Also at:
T-229, Phase -2,
New Palam Vihar Gurgaon,
Gurugram, Haryana-122001. ....Defendant
Date of Institution : 11.07.2024
Date of Arguments : 07.05.2025
Date of Judgment : 08.05.2025
JUDGMENT
1. This is a suit for recovery of Rs.3,09,750/- (Rupees Three
Lakh Nine Thousand Seven Hundred Fifty Only) alongwith
interest.
2. In brief, facts of the case as made out in the amended
plaint are that the plaintiff is the sole proprietor of M/s
SCAFF.STEEL and is engaged in the business of Scaffolding
and its allied materials. It is stated that the defendant is the sole
proprietor of M/s Om Sai Shuttering Store, who is also engaged
CS(Comm) 71/24 Mohd. Amir Vs. Diwan Singh Yadav Page 1 of 13
-- 1 of 13 --
in the same business.
3. It is averred that the defendant approached the plaintiff for
supply of shuttering and scaffolding and accordingly the orders
were made with the plaintiff. It is stated that the plaintiff supplied
the material to the defendant and raised invoice no.069 dated
20.06.2021 for an amount of Rs.2,59,945/- and invoice no.100
dated 24.07.2021 for an amount of Rs.3,09,750/-. It is further
stated that the material supplied by the plaintiff was duly
received by the defendant and no objections were raised by the
defendant regarding the quality and quantity.
4. It is case of the plaintiff that in the month of September
2022, the plaintiff approached the defendant for the payment,
however, the defendant did not make the payment on one pretext
and others. It is stated that when no payment was made by the
defendant, the plaintiff sent a legal notice dated 25.09.2023 to the
defendant through his counsel. It is further stated that after
receiving the legal notice, the defendant approached the plaintiff
and asked some time for making the payment and considering his
request, the plaintiff gave six months time to the defendant to
make the payment. It is averred that thereafter the defendant
made a payment of Rs.1,50,000/- on 14.05.2024 and
subsequently Rs.1,06,945/- on 04.06.2024 with respect to invoice
no.069 and therefore an amount of Rs.3,09,750/- is still due
against the defendant.
5. It is averred that the plaintiff also approached DLSA,
North East, Kakardooma Courts, Delhi for pre-institution
mediation but the defendant did not appear there and
accordingly, a Non Starter Report was issued on 10.06.2024,
CS(Comm) 71/24 Mohd. Amir Vs. Diwan Singh Yadav Page 2 of 13
-- 2 of 13 --
which was received by the plaintiff on 03.07.2024.
6. The plaintiff prays that a decree for a sum of Rs.3,09,750/-
along with interest @18% per annum from the date of filing of
suit till realization be passed in his favour and against the
defendant. Hence, the present suit.
7. Defendant contested the present suit by filing written
statement while taking preliminary objections that the goods
allegedly supplied under the remaining invoice bearing no. 100
dated 24.07.2021 amounting to Rs.3,09,750/- were never
delivered upon the defendant and in fact the said goods were
completely defective and thus never received by the defendant;
that plaintiff in order to support his false claim, placed on record
a forged e-way bill no.701200718446 dated 24.07.2021 as
genuine, when in reality the said e-way bill stood cancelled by
the plaintiff; that the said invoice no.100, dated 24.07.2021 was
never received by the defendant and has been shared with the
defendant only upon filing the present suit; that plaintiff has not
approached the court with clean hands; that this court lacks the
territorial jurisdiction to try and entertain the present suit.
8. On merits, the contents of the plaint have been denied as
wrong and false. It is submitted that no formal written order was
ever placed by the defendant with the plaintiff and the
transactions were done telephonically. It is further submitted that
in 2017-18, the defendant was engaged in the business of trading
in scaffolding material and allied activities with one firm namely
M/s Hind Scaff & Steels owned by its proprietor Mr. Azad Khan,
who is the relative of plaintiff. It is submitted that around June,
2021 some shuttering material was urgently required by the
CS(Comm) 71/24 Mohd. Amir Vs. Diwan Singh Yadav Page 3 of 13
-- 3 of 13 --
defendant from M/s Hind Scaff & Steels, however, Mr. Azad
Khan expressed his regret to deliver the same on urgent basis but
informed that he shall get the goods delivered from the
proprietorship firm of his relative i.e. Mr. Amir (plaintiff herein)
and thereupon, the shuttering material was sent to the defendant
by the plaintiff. It is further submitted that around July, 2021, the
defendant again required some shuttering material for his
business and verbally informed Mr. Azad Khan about the same,
however, Mr. Azad Khan instead of supplying the said material
himself, again instructed the plaintiff to deliver the goods to the
defendant. It is submitted that on 24.07.2021, the defendant was
shocked to discover that highly defective, low quality and
corroded shuttering material sent to his shop but the defendant
refused to get the said material unloaded at his shop. Thus, it is
claimed that neither the material nor the copy of alleged invoice
no.100 dated 24.07.2021 was ever delivered to the defendant. It
is submitted that suit of plaintiff is liable to be dismissed with
exemplary costs.
9. From the pleadings of the parties, following issues were
framed vide order dated 22.01.2025:-
1. Whether this court has no territorial jurisdiction to
try the present suit?OPD
2. Whether the plaintiff is entitled for a decree for sum
of Rs.3,09,750/-OPP
3. Whether the plaintiff is entitled for pendente lite
and future interest @18% per annum?OPP
4. Relief.
CS(Comm) 71/24 Mohd. Amir Vs. Diwan Singh Yadav Page 4 of 13
-- 4 of 13 --
10. In support of his case, plaintiff examined himself as PW-1,
who tendered his examination in chief by way of affidavit
Ex.PW1/A. PW-1 has relied upon following documents:-
(i) Computer generated copy of invoice no.69 dated
20.06.2021 i.e. Ex.PW1/1.
(ii) Computer generated copy of invoice no.100 dated
24.07.2021 i.e Ex.PW1/2.
(iii) Computerized printout of e-way bill against invoice
no.69 i.e. Ex.PW1/3.
(iv) Computerized printout of e-way bill against invoice
dated 24.07.2021 i.e. Ex.PW1/4.
(v) Photocopy of receipt dated 20.06.2021 regarding
weighment i.e. Ex.PW1/5.
(vi) Original receipt of weighment dated 24.07.2021 i.e.
Ex.PW1/6.
(vii) Copy of legal notice i.e. Ex.PW1/7.
(viii) Original speed post receipts is Ex.PW1/8.
(ix) Original courier receipts i.e. Ex.PW1/9.
(x) Non-Starter report dated 10.06.2024 i.e. Ex.PW1/10.
(xi) Non-Starter report dated 15.07.2024 i.e. Ex.PW1/11.
(xii) Affidavit under Order XI Rule 6 (3) of the
Commercial Courts Act, 2015 r/w Section 63 of BSA i.e.
Ex.PW1/12.
(xiii) Affidavit under Order XI Rule 6 (3) of the Commer-
cial Courts Act, 2015 r/w Section 63 of BSA dated
28.01.2025 i.e. Ex.PW1/13.
11. Plaintiff also examined Sh. Ajit, Clerk from the office of
Excise and Taxation, Gurugram North, Haryana as PW-2, who
proved on record the certified copies of GSTR2A and GSTR3B
CS(Comm) 71/24 Mohd. Amir Vs. Diwan Singh Yadav Page 5 of 13
-- 5 of 13 --
of Om Sai Shuttering Store holding GST
No.06BALPS9660L1ZU with respect to invoice number 100,
dated 24.07.2021 issued by SCAFF.STEEL holding GST
No.07DLLPA9896M1Z5 for the period w.e.f. July 2021 to
December 2021 as Ex.PW2/A (Colly) and Ex.PW2/B (Colly).
12. Defendant in support of his defence, examined himself as
DW-1 and Sh. Vipin Yadav as DW-2. They tendered their
examination in chief by way of affidavit as Ex.DW1/A and
Ex.DW2/A. DW-1 has relied upon following documents:-
1. Print out of GST details of the firm M/s Hind Scaff
and Steels as downloaded from official website of the
GST i.e. Ex.DW1/1.
2. Print out of GST details of the firm M/s Scaff Steels
as downloaded from official website of the GST i.e.
Ex.DW1/2.
3. Print out of GST details of the firm M/s Om Sai
Shuttering Store as downloaded from official website
of the GST i.e. Ex.DW1/3.
4. Print out of e-way bill no.791194645033, dated
20.06.2021 issued against invoice no. 69 dated
20.06.2021 as downloaded from the official website
of the GST i.e. Ex.DW1/4.
5. Print out of ledger account of plaintiff maintained in
the books of defendant i.e. Ex.DW1/5.
6. Copy of the statement of account of defendant
maintained in Union Bank of India i.e. Ex.DW1/6.
7. Certificate u/s 63 of BSA i.e. Ex.DW1/7.
13. Arguments have been advanced by Mohd. Sarfaraj, Ld.
CS(Comm) 71/24 Mohd. Amir Vs. Diwan Singh Yadav Page 6 of 13
-- 6 of 13 --
Counsel for plaintiff and by Sh. Himanshu Yadav, Ld. Counsel
for defendant. I have given my thoughtful consideration to the
rival submissions made by the parties and also gone through the
record as well as written submission, as filed by both the parties.
My issue wise findings are as under:-
Issue no.1:-
Whether this court has no territorial jurisdiction to try
the present suit?OPD
14 Onus to prove this issue was upon the defendant. Ld.
Counsel for defendant argued that this court has no territorial
jurisdiction to try the present suit as admittedly, the goods were
allegedly supplied to the defendant at Gurugram, Haryana. It is
submitted that no cause of action arose within the territorial
jurisdiction of this court as the defendant neither visited at the
shop of plaintiff to place order nor delivery was taken from the
shop of the plaintiff.
15. Per contra, Ld. Counsel for plaintiff argued that the
defendant visited at the shop of the plaintiff and the goods were
also dispatched from the shop of the plaintiff situated within the
territorial jurisdiction of this court. Ld. Counsel for plaintiff
further argued that it is a settled law that a debtor must seek his
creditor and the part payment was also made by the defendant to
the plaintiff regarding invoice no.069 dated 20.06.2021 at the
shop of the plaintiff.
16. It is settled law that where no place of payment is
specified in the contract, either expressly or impliedly, the debtor
must seek the creditor as the obligation to pay the debt involves
CS(Comm) 71/24 Mohd. Amir Vs. Diwan Singh Yadav Page 7 of 13
-- 7 of 13 --
the obligation to find the creditor and to pay him at the place
where he is when the money is payable. Reliance is placed upon
the judgment titled as TKW Management Solutions Pvt. Ltd. vs.
Sherif Cargo & Anr., 2023/DHC/000745.
17. Defendant in his affidavit of admission-denial of
documents has admitted invoice no.069 dated 20.06.2021 i.e.
Ex.PW1/1, wherein it is mentioned that all disputes will be
settled only Delhi jurisdiction. The plaintiff has also given his
bank details on the invoices Ex.PW1/1 and Ex.PW1/2 i.e. AU
Small Finance Bank, Yamuna Vihar, Delhi and the defendant
also made part payment regarding invoice no.69 dated
20.06.2021 in the said bank account as also appearing from
ledger account of defendant i.e. Ex.DW1/5, which area falls
within the territorial jurisdiction of this court. Further, the e-way
bill Ex.PW1/3 regarding the supply of goods related to invoice
no.069 dated 20.06.2021 i.e. Ex.PW1/1 and e-way bill
Ex.PW1/4 related to invoice no.100 dated 24.07.2021 i.e.
Ex.PW1/2 shows that goods were dispatched from the shop of
plaintiff situated at North-East, Delhi. Therefore, this court has
territorial jurisdiction to try the present suit. Accordingly, this
issue is decided against the defendant and in favour of the
plaintiff.
Issue No.2:-
Whether the plaintiff is entitled for a decree for sum
of Rs.3,09,750/-OPP
18. Onus to prove this issue was upon the plaintiff. PW-1 in
his affidavit of evidence Ex.PW1/A deposed that he had supplied
CS(Comm) 71/24 Mohd. Amir Vs. Diwan Singh Yadav Page 8 of 13
-- 8 of 13 --
the material to the defendant through invoice no.100 dated
24.07.2021 i.e. Ex.PW1/2 and the material supplied by him was
duly received by the defendant and no objections were raised by
the defendant regarding the quality and quantity. The defendant
has taken a defence in his written statement that on 24.07.2021
the defendant was shocked to discover that highly defective, low
quality and corroded shuttering material was sent to his shop and
that the defendant refused to get the said material unloaded at his
shop.
19. The defendant has admitted the weighment receipt dated
24.07.2021 regarding the vehicle no.DL1LAA4436 i.e.
Ex.PW1/6 issued by Sai Ram Dharm Kanta, through which the
goods were carried out to the shop of the defendant. The e-way
bill Ex.PW1/4 also shows that goods were transported through
vehicle No.DL-1LAA-4436 for supply of goods through tax
invoice no.100 dated 24.07.2021.
20. Ld. Counsel for defendant argued that plaintiff had filed
the e-way bill dated 24.07.2021 regarding invoice no. 100 which
was cancelled by him and this fact was not disclosed by the
plaintiff in the amended plaint. It is submitted that the defendant
had taken the said objection in written statement and thereupon
the plaintiff filed an application for placing on record the re-
generated e-way bill dated 24.07.2021. Per contra,Ld. Counsel
for plaintiff argued that inadvertently he had filed the cancelled
e-way bill along with the list of documents but later on, his
application for placing on record for re-generated e-way bill
dated 24.07.2021 was allowed subject to cost of Rs. 5,000/-
which was paid to the defendant and the said document was
CS(Comm) 71/24 Mohd. Amir Vs. Diwan Singh Yadav Page 9 of 13
-- 9 of 13 --
taken on record. Perusal of record shows that plaintiff earlier
relied upon e-way bill dated 24.07.2021 with regard to invoice
no. 100 i.e. Ex. PW1/D-1 which was generated at 04:43 pm on
24.07.2021 but the same was cancelled and after three minutes
i.e. at 04:47 pm, the plaintiff regenerated the e-way bill dated
24.07.2021 with regard to same invoice no. 100 i.e. Ex. PW1/4.
21. Defendant i.e. DW-1 has admitted in his cross examination
that he has taken input tax credit of GST against invoice no.100
dated 24.07.2021. It was submitted by Ld. Counsel for defendant
that claim of input tax credit by the CA of the defendant is a
human error and it does not prove the delivery of the goods.
Once the defendant has taken a plea that the goods under invoice
no.100 dated 24.07.2021 reached at his shop but he refused to get
the said material unloaded at his shop as same were highly
defective and of low quality, the onus to prove shifts upon the
defendant to prove that goods were returned to the plaintiff.
Defendant has not led any cogent evidence to show that the
material which was sent through invoice no.100 dated
24.07.2021, was returned on the same day to the plaintiff.
However, the defendant has admittedly claimed the input tax
credit of invoice no.100 dated 24.07.2021. In this regard, it is
relevant to refer to Sub-sections (1) and (2) of Section 16 of the
CGST Act. The same are set out below:
“16. Eligibility and conditions for taking input tax
credit.-
(1) Every registered person shall, subject to such
conditions and restrictions as may be prescribed and in
the manner specified in section 49, be entitled to take
credit of input tax charged on any supply of goods or
services or both to him which are used or intended to
be used in the course or furtherance of his business and
CS(Comm) 71/24 Mohd. Amir Vs. Diwan Singh Yadav Page 10 of 13
-- 10 of 13 --
the said amount shall be credited to the electronic
credit ledger of such person.
(2) Notwithstanding anything contained in this section,
no registered person shall be entitled to the credit of
any input tax in respect of any supply of goods or
services or both to him unless, -
(a) he is in possession of a tax invoice or debit note
issued by a supplier registered under this Act, or such
other tax paying documents as may be prescribed;
(aa) the details of the invoice or debit note referred to
in clause
(a) has been furnished by the supplier in the statement
of outward supplies and such details have been
communicated to the recipient of such invoice or debit
note in the manner specified under section 37.
(b) he has received the goods or services or both.
Explanation.- For the purposes of this clause, it shall
be deemed that the registered person has received the
goods or, as the case may be, services...”
22. Thus, Section 16 of CGST Act, 2017 provides that in case
a buyer has taken the benefit of input tax credit, it shall be
deemed that he has already received the goods/services provided
to him by the supplier. It is not the plea of the defendant that as
he had taken the input tax credit regarding invoice no.100 dated
24.07.2021 due to human error and later on, he rectified the same
in his GST returns and refunded the input tax credit claimed by
him.
23. The authority titled as State of Karnataka vs. M/s Ecom
Gill Coffee Trading Pvt. Ltd. (Civil Appeal No.230 of 2023)
decided on 13.03.2023 as relied upon by Ld. Counsel for
defendant, it was held by Hon’ble Apex Court that the provision
of section 70 of the Karnataka Value Added Tax, 2003 in its plain
terms clearly stipulate that the burden of proving the ITC claim is
CS(Comm) 71/24 Mohd. Amir Vs. Diwan Singh Yadav Page 11 of 13
-- 11 of 13 --
correct is squarely upon the purchasing dealer claiming such ITC
and mere production of the invoices or the payment made by
cheques is not enough and the dealer claiming ITC has to prove
beyond doubt the actual transaction which can be proved by
furnishing the name and address of the selling dealer, details of
the vehicle which had delivered the goods etc. However, in the
present case the plea of defendant is that he has wrongly taken
the input tax credit i.e. ITC although he returned the goods as
same were not upto-mark.
24. Once the defendant has admitted that goods were
dispatched to his shop through invoice no. 100, dated 24.07.2021
but he had not accepted the same as allegedly same were highly
defective and of low quality, it was for the defendant to prove the
said fact. The defendant has admittedly taken the input tax credit
of invoice no.100 dated 24.07.2021 and therefore in view of
Section 16 of CGST Act, 2017, it is deemed that the defendant
had received the goods. Thus, the defendant is liable to make the
payment of outstanding amount of Rs. 3,09,750/- regarding the
goods delivered through invoice no. 100 dated 24.07.2021.
Accordingly, this issue is decided in favour of the plaintiff and
against the defendant.
Issue No.3:-
Whether the plaintiff is entitled for pendente lite and
future interest @18% per annum?OPP
25. Onus to prove this issue was upon the plaintiff. Plaintiff
has claimed pendent lite and future interest @ 18% per annum.
There is no agreement between the parties regarding specific rate
CS(Comm) 71/24 Mohd. Amir Vs. Diwan Singh Yadav Page 12 of 13
-- 12 of 13 --
of interest. Admittedly the transactions between the parties are of
commercial in nature, therefore, as per Section 34 CPC, plaintiff
is entitled to pendente lite and future interest at which moneys
are lent by the nationalized bank in relation to commercial
transactions i.e. @ 12% per annum from the date of filing of suit
till realization. Accordingly, it is held that plaintiff is entitled to
recover the amount i.e. Rs.3,09,750/- alongwith interest @ 12 %
per annum from the date of filing of suit till realization from the
defendant.
Relief.
26. In view of my findings on the aforementioned issues, the
suit of plaintiff is decreed for a sum of Rs.3,09,750/- (Rupees
Three Lakh Nine Thousand Seven Hundred Fifty Only)
alongwith pendente lite and future interest @ 12 % per annum
from the date of filing of suit till realization in favour of the
plaintiff and against the defendant. Costs of the suit are also
awarded in favour of the plaintiff. Decree Sheet be prepared
accordingly.
File be consigned to Record Room.
Announced in the open court
on 08th May, 2025
(Sanjeev Kumar Malhotra)
District Judge (Commercial Court)
North-East District
Karkardooma Courts, Delhi
CS(Comm) 71/24 Mohd. Amir Vs. Diwan Singh Yadav Page 13 of 13
-- 13 of 13 --