Final Order 8

Order Details: COPY OF JUDGMENT
Pdf Text: BEFORE THE COURT OF SH. SURINDER S. RATHI, DISTRICT JUDGE
(COMM.)-03 SHAHDARA, KARKARDOOMA, DELHI.
CS Comm. No.309/2023
Ramesh Kumar Aggarwal
Having its Registered Office at:
Bfh-80, Shalimar Bagh (West) Delhi-110088. ...….Plaintiff
Vs.
M/s Metro Interio Pvt. Ltd.
Address: A-270, Jawahar Mohalla,
Jain Mandir Wali Gali, Shahdara, Delhi-110032 ..…..Defendant
Date of Institution : 08.06.2023
Date of Final Arguments : 31.01.2024
Date of Judgment : 31.01.2024
Decision : Decreed
Judgment
1. This suit is filed by plaintiff through his special power of attorney for
recovery of Rs.11,49,668/- along with interest @18% per annum as unpaid
dues of Goods sold.
Case of the Plaintiff
2. Case of the plaintiff as per plaint and the documents filed is that he is
proprietor of M/s Shree Balaji Enterprises and is in the business of sale of
wooden material. It is pleaded that he is filing this suit through his SPA
Abhishek Agarwal by claiming that he is well aware of the fact. Defendant,
a duly incorporated private limited company, approached the plaintiff
through its Director for purchase of goods. Business was carried out through
25 invoices issued between dates 13.05.2017 to 10.02.2023. Defendant used
to make payment on account. Plaintiff was maintaining a running account
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and there was an outstanding due of Rs.5,69,143/- however no date is
mentioned in the plaint. Dues were not cleared despite requests. Plaintiff
issued legal demand notice on 04.03.2022 which was neither replied nor
complied. Thereafter, plaintiff approached Shahdara DLSA for Pre-
Institution Mediation under Section 12A of Commercial Courts Act, 2015
wherein defendant did not participate. Consequently, Non-Starter Report
was issued on 21.04.2023 was issued. Plaintiff has calculated pre-suit
interest @24% per annum and the suit was filed with following reliefs:
Prayer:
i. Pass a decree for recovery of Rs.5,69,143/- alongwith interest @24% per
annum of Rs.5,80,525/- i.e. Rs.11,49,668/- and future interest @18% per
annum till the date of realization of aforesaid amount in favour of the
plaintiff and against the defendants.
ii. Costs of the suit and its proceedings may also be awarded in favour of
plaintiff and against the defendants.
iii. Any other relief or reliefs in favour of the Plaintiff and against the
Defendants be also granted in the inerest of justice.
3. Summons of the suit was served upon the defendant company at the reg-
istered address and defendant was served on 23.09.2023. When no WS was
filed right of defendant to file WS was closed on 26.10.2023.
4. Upon completion of pleadings following notional issues were identified
by this Court on 26.10.2023:
Notional Issues:
i. Whether the plaintiff is entitled for recovery of Rs.11,49,668/- alongwith
pendente lite and future interest @18% p.a.? OPP
ii. Whether plaint is not hit by Doctorine of Damdupat as interest portion is
more than Principal amount? OPP
iii. Relief
5. Evidence in this case was ordered to be recorded before Ld. LC as per
protocol created by this Court under Order 18 Rule 4 CPC read with Order
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15A Rule 6(l) and (o) CPC as applicable to Commercial suits. Evidence was
recorded before Ld. LC Sh. Sandeep Soni, Advocate appointed by this Court
for the sake of timely disposal of this case.
Plaintiff’s Evidence
6. In his evidence recorded before Ld. LC, plaintiff examined himself as
PW1 Ramesh Kumar Aggarwal. Vide her affidavit Ex.PW1/A, she deposed
on the lines of plaint and exhibited following documents:
i. The original Special Power of Attorney is Ex.PW1/B;
ii. The copy of GST Registration Certificate of Proprietor of Plaintiff firm in the name of Sh.
Abhishek Aggarwal is Ex.PW1/C;
iii. The copy of Aadhar Card of proprietor of plaintiff firm is Ex.PW1/D;
iv. The copy of Aadhar Card of the deponent is Ex.PW1/E;
v. The copy of the bills is Ex.PW1/F;
vi. The copies of Legal Notice dated 04.03.2023 is Ex.PW1/G;
vii. The original receipts of the speed post are Ex.PW1/H;
viii. The copies of tracking report of the Speed Post are Ex.PW1/I;
ix. The copy of the statement of account is Ex.PW1/J;
x. The Non-Starter Report dated 21.04.2023 is Ex.PW1/K;
xi. Copy of Invoice no. 156 dated 13.05.2017 is Mark A;
xii. Copy of Invoice no. 161 dated 21.06.2017 is Mark B;
xiii. Copy of Invoice no. 163 dated 22.06.2017 is Mark C;
xiv.Copy of Invoice no. 164 dated 23.06.2017 is Mark D;
xv. Copy of Invoice no. 474 dated 10.02.2023 is Mark E;
7. None appeared for cross-examination of PW1. No evidence was led
on behalf of defendant.
8. I have heard arguments of Sh. Dalvinder Singh, Ld. Counsel for
plaintiff have perused the case file carefully. None appeared on behalf of
defendant to argue the case.
9. Now I shall dispose of individual issues framed in this case.
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Discussion and Findings on Issues:
Issue No. 2
ii. Whether plaint is not hit by Doctorine of Damdupat as interest
portion is more than Principal amount? OPP
10. Perusal of the plaint shows that as against the principal amount of
Rs.5,69,143/- plaintiff is claiming pre-suit interest of Rs.5,80,525/-. Since the
interest component is beyond the principal amount it is against the Doctrine
of Damdupat as prescribed in Section 30 (2) of Punjab Relief of
Indebtedness Act, 1934, as extended to Delhi. For ready reference the same
is reproduced hereunder:
Section 30 of Punjab Relief of Indebtedness Act, 1934 : Damdupat
2.“In any suit in respect of a debt as defined in Section 7, advanced after the
commencement of this Act, no Court shall pass or execute a decree or give effect to
an award in respect of such debt for a larger sum than twice the amount of sum
found by the court to have been actually advanced less any amount already received
by a creditor.”
11. This issue is answered against the plaintiff only to the extent that the
interest component beyond the principal amount is hit by Doctorine of
Damdupat.
Issue No. 1
12. Plaintiff claims to have sold material through 25 invoices, however, 24
invoices are issued between 13.05.2017 and 21.07.2018. This suit is filed on
08.06.2023 and as such at a first glance it appears to be barred by limitation.
As per Article 14 of Limitation Act the period of three years of limitation
starts from the date of delivery of goods while the first invoice filed is of
13.05.2017 but the principal amount of Rs.5,69,143/- stands covered w.e.f.
bill dated 08.08.2017 onwards. It is submitted by Ld. Counsel for plaintiff
that the case in hand is not covered under Article 14 or for that matter
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Article 15 but is covered under Article 1 of Limitation Act. For ready
reference the same are reproduced hereunder:
Schedule to Limitation Act
Article Description of suit Period of
Limitation
Time from which period
begins to run
1. For the balance due on a mutual,
open and current account, where
there have been reciprocal
demands between the parties.
Three Years The close of the year in
which the last item admitted
or proved is entered in the
account; such year to be
computed as in the account.
14. For the price of goods sold and
delivered, where no fixed period
of credit is agreed upon.
Three Years The date of delivery of the
goods.
15 For the price of goods sold and
delivered to be paid for after the
expiry of a fixed period of credit.
Three Years When the period of credit
expires.
13. In support of this plea attention of this Court is drawn to document
Ex.PW1/J where there is an entry of credit note on 30.05.2017 and as such
on account of mutual claims this matter gets covered under Article 1 of
Schedule attached to Limitation Act being open, current and mutual
account. Article 1 of Schedule attached to Limitation Act, 1963 when read
in conjunction with case titled Fresh and Healthy Enterprises Ltd. Vs. R.
K. Brothers, 2018 Latest Caselaw 5006 Del wherein HMJ Valmiki J. Mehta
ruled:
6. “In my opinion, the trial court has committed a gross illegality in dismissing the
suit as time barred without even adverting to the fact that the suit is based on a
statement of account. A suit plaint does not have to contain a statement of law that
the ledger account was an open, mutual and current account under Article 1 of the
Limitation Act because that is an inference or a finding of fact which has to be
arrived at from the statement of account which is filed. When we see the statement of
account which is filed with respect to transactions entered into, Annexure P-3 to the
plaint at page 223 of the trial court record, it is seen that within the first few
transactions itself there are shifting balances. Once there are shifting balances
clearly therefore the suit will be on the basis of an open, mutual and current account.
7. As per Article 1 of the Limitation Act, a suit filed on the basis of an open,
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mutual and current account, limitation commences at the end of the financial year
for which the transactions are entered into. The transactions entered into show that
the last invoice entered into the ledger account maintained by the appellant/plaintiff
of the respondent/defendant is dated 14.05.2013. Limitation therefore will commence
as per Article 1 of the Limitation Act on 01.04.2014. The suit has been filed on
26.07.2016 i.e. within three years of commencing of limitation on 01.04.2014 and
therefore the suit was clearly within limitation. Trial court has committed a gross
illegality in dismissing the suit as time barred without reference to the law under
Article 1 of the Limitation Act and which states that once a suit is filed on the basis
of an open, mutual and current account, then limitation commences from the end of
the financial year and which last transaction is proved or admitted, with the last
transaction as stated above being dated 14.05.2013 when invoice no. 8130 for an
amount of Rs.1,73,040/- was raised by the appellant/plaintiff upon the
respondent/defendant.”
14. Last credit entry as per handwritten ledger is Rs.75,000/- on
10.07.2022. As such since the debit balance was being carried forward w.e.f.
Financial Years 2017-18, 2018-19, 2019-20, 2020-21, 2021-22 and 2022-23
the period of limitation starts from 01.04.2023. The suit is filed on
08.06.2023 and is as such within limitation.
15. As regards proof of delivery under Section 31, 33 and 39 of Sale of
Goods Act all the invoices carry endorsement of receipt of material. The
invoices are either of pre-GST era and those of 2018 are below threshold
value of Rs.1 lakh for Delhi.
16. The legal demand notice was not replied by the defendant despite due
service. As per case titled Jayam Company Vs. T. Ravi Chandaran 2003,
(3) RCR (Cr.) 154 Madras presumption is drawn against defendant that they
have admitted the contents of the legal notice.
17. In another case titled as Metropolis Travels & Resorts (I) Pvt. Ltd.
Vs. Sumit Kalra and Ors., 2002 Latest Caselaw 714 Del wherein it was
observed that :
“13. There is another aspect of the matter which negates the argument of the
respondent and that is that the appellant served a legal notice on the
respondent vide Ex. PW1/3. No rely to the same was given by the
respondent. But in spite of the same, no adverse inference was drawn
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against the defendant. This court in the case of Kalu Ram Vs. Sita Ram 1980
RLR 44 observed that service of notice having been admitted without
reservation and that having not been replied in that eventuality, adverse
inference should be drawn because he kept quite over the notice and did
not send any reply. Observations of Kalu Ram’s case (supra) apply on all
force to the facts of this case. In the case in hand also despite receipt of
notice, respondent did not care to reply nor refuted the averments of demand
of theamount on the basis of the invoices/ bills in question. But the Ld. Trial
court failed to draw inference against the respondent”.
(Emphasis Supplied)
18. Ld. Counsel for plaintiff has also relied upon case titled as Krishan
Kumar Aggarwal Vs. Life Insurance Corporation 2010 Latest Caselaw
3344 Del wherein Hon’ble Delhi High Court observed that:
“65. No explanation has been rendered by the respondent as to why letter dated 23rd
August, 2008 and the legal notice send by the appellant were not repudiated or even
replied. Despite due receipt, the respondent did not bother to even send any response to
the letter dated 23rd August, 2008 or the legal notice, the contents whereof would be
deemed to have been admitted. In the judicial precedents reported in Rakesh Kumar Vs.
Hindustan Everest Tool Ltd. MANU/SC0396/1988: (1988) 2 SCC 165 & Hirallal Kapur
Vs. Prabhu Chaudhary MANU/SC/0189/1988 : (1988) 2 SCC 172 it was held by the
Supreme Court that a categorical assertion by the landlord in a legal notice if not
replied to and controverted, can be treated as an admission by a tenant.
“66. In a Division Bench proceedings of this court reported in Metropolis Travels and
Resorts Vs. Sumit Kalra MANU/DE/0562/2002 : 98 (2002) DLT 573 (DB), no adverse
inference was drawn against the respondent for failure to reply the legal notice on
consideration of the facts and circumstances of the case. Reference was made to
proceedings reported in Kalu Ram Vs. Sita Ram wherein it had been observed that
service of notice being admitted without reservation and that having not been replied,
in that eventuality, adverse inference should be drawn”.
(Emphasis Supplied)
19. As per judgments of Division Bench of Hon’ble High Court of Delhi,
plaintiff has been successful in showing on record that non-reply of legal
notice by the defendant calls for drawing of presumption as to correctness of
the facts contained therein.
20. The evidence in this case is primarily documentary. The documents
relied upon by the plaintiff are the documents maintained by a company in the
ordinary course of its business. Though the exceptions cannot be ruled out,
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but generally taking a judicial notice of the business, these documents can be
considered to be duly executed in due course of the business and capable of
binding the parties into a contractual relationship.
21. The pleadings in the plaint and annexed documents has remained
unrebutted, unchallenged and uncontroverted. In the absence of any plausible
denial on behalf of defendant, case of the plaintiff is deemed to be admitted.
On the basis of pleadings, evidence led and the documents exhibited plaintiff
has discharged the onus of proving its case.
Interest
22. Plaintiff has claimed interest @ 18% per annum. The interest is payable
as per Section 34 CPC. For ready reference, Section 34 CPC is reproduced
hereunder:
Section 34 CPC: Interest
(i)“Where and in so far as a decree is for the payment of money, the Court may, in the
decree, order interest at such rate as the Court deems reasonable to be paid on the
principal sum adjudged, from the date of the suit to the date of the decree, in addition to
any interest adjudged on such principal sum for any period prior to the institution of
the suit, with further interest at such rate not exceeding 6% per annum as the Court
deems reasonable on such principal sum from the date of the decree to the date of pay-
ment, or to such earlier date as the court thinks fit.
(ii).Provided that where the liability in relation to the sum so adjudged had arisen out
of a commercial transaction, the rate of such further interest may exceed 6% per annum
but shall not exceed the contractual rate or interest or where there is no contractual
rate, the rate at which moneys are lent or advanced by nationalized banks in relation
to commercial transactions.
Explanation (i) In this sub-section, “nationalized bank” means a corresponding new
bank as defined in the Banking Companies (Acquisition and Transfer of Undertakings)
Act 1970.
Explanation (ii) For the purposes of this section, a transaction is a commercial trans-
action, if it is connected with the industry, trade or business of the party incurring the
liability.
Where such a decree is silent with respect to the payment of further interest (on such
principal sum) from the date of the decree to the date of the payment or other earlier
date, the Court shall be deemed to have refused such interest, and a separate suit there-
fore shall not lie.
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(Emphasis Supplied)
23. Section 34 CPC provides that plaintiff will be entitled the interest at
the rate at which Court finds reasonable. For a general suit, the rate of interest
prescribed is 6% and for commercial suit, the Parliament promulgates that
rate of interest may increase from 6% to a rate which is found reasonable.
Plaintiff is accordingly entitled to only the rate at which RBI has issued Cir-
cular for Commercial suits.
24. As far as the interest is concered, rate applicable to Commercial
transaction shall be payable. As per RBI notification dated 30.08.2022
issued vide Press Release no.2022-2023/794 whereby advisory issued by
RBI to Schedule Commercial banks of accepting deposit rates @ 9.05% per
annum.
Relief
25. In view of the above, suit of the plaintiff is decreed with cost for
Rs.5,69,143/- with 9% interest w.e.f. 01.03.2023 (as per last sale made)
onwards, pendente lite and till realization. Lawyer’s fees is assessed as
Rs.20,000/-.
26. Decree sheet be prepared accordingly. File be consigned to Record
Room after due compliance.
(SURINDER S. RATHI)
District Judge,
Commercial Court -03
Shahdara District, KKD
Delhi/31.01.2024
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