Calcutta High Court
Manish Luharuka vs N.C. Infracon Private Limited & Ors on 17 September, 2025
IN THE HIGH COURT AT CALCUTTA
ORIGINAL SIDE
COMMERCIAL DIVISION
Present:
The Hon'ble Justice Krishna Rao
G.A. (Com) No. 5 of 2025
In
C.S. (Com) No. 378 of 2024
(Old No. C.S. 107 of 2022)
Manish Luharuka
Versus
N.C. Infracon Private Limited & Ors.
Mr. Shyamal Sarkar, Sr. Adv.
Mr. Kumar Gupta
Ms. Nibedita Pal
Mr. Ananda Gopal Mukherjee
Ms. Sonam Roy
Ms. N. Khatoon
... For the plaintiff.
Mr. Shibjit Mitra
Mr. Sudip Ghosh
Ms. Labony Ray
Ms. Bidisha Ghosh
... For the defendants.
2
Hearing Concluded On : 10.09.2025
Judgment on : 17.09.2025
Krishna Rao, J.:
1. The plaintiff has filed the present application being G.A. (Com) No. 5 of
2025 in C.S. (Com) No. 378 of 2024 praying for judgment upon
admission. The plaintiff has filed the suit praying for a decree for a sum
of Rs. 1,15,23,833/- along with interest pendente lite and interest upon
Judgment at the rate of 18% per annum.
2. The plaintiff carries on business as supplier of various types of
structural steel including channels and joists and other products
required for fabrication and construction work. The defendants carry
on business as civil contractors. The plaintiff was a supplier to one of
ILFS Engineering Ltd. Some of the officers of the said ILFS Engineering
Ltd. introduced the plaintiff to the defendants for supply of steel
structures to the defendants, who was also a supplier of the said ILFS
Engineering Ltd.
3. The plaintiff approached the defendants and after being satisfied that
the rates of the plaintiff were competitive, the defendants issued a
Purchase Order dated 27th September, 2017 and on receipt of the
same, the plaintiff had supplied and delivered goods to the work site of
the defendants at C/o SG Heavy Engineering Private Limited in
between 3rd October, 2017 and 9th October, 2017. On delivery of
materials, the plaintiff raised invoices upon the defendants. The
defendants accepted the goods sold and delivered and invoices raised
by the plaintiff without any objection.
4. Under some internal arrangements between the defendants and ILFS
Engineering Ltd., some part payments were made by ILFS on behalf of
the defendants. The last payment was made on 3rd April, 2018. The
plaintiff has made several requests and demands to the defendants for
payment of the balance amount but the defendants failed to pay the
balance amount of Rs. 65,29,084.23/-. The plaintiff has sent notice to
the defendants on 1st December, 2020 calling upon the defendants for
payment of an amount of Rs.65,29,084/- along with interest at the rate
of 18% from the date it becomes due.
5. Even after receipt of notice, the defendants have neither paid the
amount nor have sent any reply to the plaintiff. The plaintiff initiated
Pre-institution Mediation process but the defendants had failed to settle
the dispute, accordingly, a "Nonstarter Report" was served upon the
plaintiff and thereafter the plaintiff has filed the present suit.
6. Mr. Shyamal Sarkar, Learned Senior Advocate representing the plaintiff
submits that the defendants have acknowledged and admitted in
writing that the amount of Rs. 65,29,084/- is due and payable by the
defendants to the plaintiff in its Annual Accounts for the financial year
2020-2021 ending on 31st March, 2021. He further submits that the
defendants have further admitted the amount payable to the plaintiff in
the balance sheet for the financial year 2022-2023 ending on 31st
March, 2023.
7. Mr. Sarkar submits that the defendants entered appearance in the suit
and had filed written statement and in the written statement, the
defendants admitted that the defendants had drafted and prepared the
Purchase Order and also does not dispute with regard to receipt of
goods sold and invoices. He submits that the defendants in its written
statement also admitted that the goods supplied by the plaintiff was
utilized by the defendants in connection with the work being executed
by the defendants for IL&FS Engineering Limited.
8. Mr. Sarkar submits that the defendants have admitted the claim of the
plaintiff and have no defence in the suit. He submits that the
defendants have took plea that since part payments were made by ILFS
Engineering Limited on behalf of the defendants, the plaintiff should
seek balance payment from the said firm but there is no concluded
contract or privity of contract with the ILFS Engineering Ltd., the plea
taken by the defendants is baseless.
9. Mr. Sarkar in support of his submissions relied upon the judgment in
the case of Usha Rectifier Corporation (India) Limited [Presently
Known As M/s. Usha (India) Limited] Vs. Commissioner of Central
Excise, New Delhi reported in (2011) 11 SCC 571 and submits that
once the defendants have themselves made admission in their own
balance sheet, which was not rebutted and was further substantiated
in the Director's Report, the defendants now cannot deny for making
payment.
10. Mr. Sarkar has further relied upon the judgment in the case of Ravi
Udyog Private Limited Vs. S.G. Projects Ltd. reported in 2016 SCC
OnLine Cal 4394 and submits that the defendants have not explained
their admission in the written statement and the annual accounts
including the accounts of financial year 2020-2021 ending on 31st
March, 2021.
11. Mr. Sarkar relied upon the judgment in the case of Asset
Reconstruction Company (India) Limited Vs. Bishal Jaiswal and
Another reported in (2021) 6 SCC 366 and submitted that in the said
case, the Hon'ble Supreme Court relied upon the judgment of this
Hon'ble Court in the case of Bengal Silk Mills Co. Vs. Ismail Golam
Hossain Ariff reported in 1961 SCC OnLine Cal 128 wherein the
Hon'ble Court held that an acknowledgment of liability that is made in
a balance sheet can amount to an acknowledgement of the debt.
12. Mr. Shibjit Mitra, Learned Advocate representing the defendants
submits that the plaintiff has wilfully and deliberately supressed the
fact that M/s. Gopal Trading Company, being the plaintiff's business
undertaking was a known and regular supplier to the IL&FS
Engineering & Construction Company Ltd. but was a complete stranger
to the defendants. He submits that the defendants under the
instruction and pressure of its client, IL&FS Engineering Ltd. has
drafted and prepared the purchase order dated 27th September, 2017.
He submits that the said purchase order was sent to IL&FS through
email dated 27th September, 20217 and on further instruction again
sent on 28th September, 2017. He submits that subsequently IL&FS
Engineering Ltd. issued updated purchase order to the erstwhile
plaintiff, thus there is no concluded contract between the plaintiff and
the defendants.
13. Mr. Mitra submits that there is no privity of contract between the
plaintiff and the defendants. The plaintiff has never supplied any
materials to the defendants and the defendants have never
acknowledged the material supplied by the plaintiff. He submits that
the plaintiff has supplied materials to SG Heavy Engineering Pvt. Ltd.
who is the authorised fabricator of IL&FS Engineering Ltd.
14. Mr. Mitra submits that the plaintiff received two payments i.e. Rs. 55
Lakhs and Rs. 15 Lakhs from the IL&FS Engineering Ltd., without any
objection though the name of consignee of the supplied materials,
delivery address and the entity sending money are all different. He
submits that the plaintiff had the knowledge that the defendants were
also sufferer like the plaintiff due to initiation of CIRP proceedings
against IL&FS Engineering Ltd. After the resolution plan was approved
by the Learned National Company Law Tribunal, a detailed list of
creditors was published wherein the name of the plaintiff and the
defendants were included.
15. Mr. Mitra submits that Section 28 of the Bharatiya Sakshya
Adhiniyam, 2023, provides that entries in the books of account,
including those maintained in an electronic form, regularly kept in the
course of business are relevant whenever they refer to a matter into
which the Court has to inquire, but such statements shall not alone be
sufficient evidence to charge any person with liability. He submits that
the plaintiff relied upon the annual account of the defendants and
prayed for judgment upon admission but the plaintiff has to prove the
said annual account by way of evidence. In support of his submissions,
he has relied upon the judgment in the case of Central Bureau of
Investigation Vs. V.C. Shukla and Others reported in (1998) 3 SCC
410 and submits that from a plain reading of the section, it is manifest
that to make an entry relevant thereunder it must be shown that it has
been made in a book, that book is a book of account and that book of
account has been regularly kept in the course of business. He submits
that it is also manifest that even if the above requirements are fulfilled
and the entry becomes admissible as relevant evidence, still, the
statement made therein shall not alone be sufficient evidence to charge
any person with liability.
16. Mr. Mitra, further relied upon the judgment in the case of Sandeep
Singh Vs. Hindustan Spirits Ltd. through its Chairman/ Managing
Director/ CEO reported in 2023 SCC OnLine Del 678 and submits
that the books of accounts have been maintained regularly in the
course of business, would not be sufficient to draw any conclusion of
concluded liability against the defendants.
17. The plaintiff relied upon the Independent Auditors' Report of the
defendants company issued by the Chartered Accountants of the
defendants company dated 29th November, 2021, 29th August, 2022
and 4th September, 2023, consisting of balance sheets as on 31st
March, 2021, 31st March, 2022, and 31st March, 2023, wherein the
defendants have shown the current liabilities/trade payable of the
plaintiff to the tune of Rs. 65,29,084/-.
18. The defendants say that as per Section 28 of the Bharatiya Sakshya
Adhiniyam, 2023, book of account shall not alone be sufficient to prove
the case against the defendants. Section 28 of the Bharatiya Sakshya
Adhiniyam, 2023, relates to entry in the book of accounts when
relevant. The plaintiff has relied upon the balance sheet of the
defendants prepared by the Chartered Accountants from year to year.
Book of Accounts refer to comprehensive record of financial
transactions and include various ledgers and journals that capture all
financial dealing of an entry over a period. These include ledgers such
as sales ledger, purchase ledger, cash book, journal etc. The books of
accounts are used to record day today transactions and are essential
for maintaining detailed financial record. Businesses are generally
required by law to maintain accurate books of accounts to ensure
transparency and accountability in financial reporting. Books of
accounts are essentially the raw data that feed into the preparation of
financial statements like balance sheet. They capture every financial
transaction, ensuring that all incomes and expenses are accurately
recorded. The integrity of these records is crucial for accurate financial
analysis and reporting.
19. Balance Sheet is a finance statement that provides a snapshot of a
company's financial position at a specific point in time. It includes
assets, liabilities and shareholder's equity reflecting what company
owns and owes. The balance sheet is used to assess the financial
health of an entity, showing its net worth and providing insight into its
capital structure. Balance sheets are typically prepared annually or
quarterly and are required for financial reporting and compliance
purposes. Balance Sheet is a formal financial statement derived from
the data recorded in the book of accounts. It does not reflect every
transaction but rather a summary of the company's financial standing.
The balance sheet helps stakeholders understand the company's
liquidity position, operational efficiency and financial stability.
20. Section 28 of the Bharatiya Sakshya Adhiniyam, 2023, is about the
books of account and not the balance sheet. The balance Sheet which
the plaintiff relied upon is the part of the Independent Auditors' Report.
The balance sheet attached with the Auditor's Report is duly signed by
the directors of the defendants company. The judgments relied by the
defendants in the case of Central Bureau of Investigation (supra)
and Sandeep Singh (Supra) are not applicable in the facts and
circumstances of the present case.
21. Section 209 of the Companies Act deals with books of accounts of the
company. Sub-section (3) thereof casts an obligation on the company to
keep "proper books of accounts" as are necessary to give a "true and
fair view of the state of affairs of the company" or its branch office and
explained its transactions. Similarly, Section 211 of the Companies Act
deals with "form and contents of balance sheet and profit and loss
account of the company". This Section again casts an obligation on
every company that it shall give "true and fair view of the state of affairs
of the company" at the end of the financial year. Sub-section (3B)
provides that if the company does not comply with the accounting
standard prescribed then they have to disclose the reason for not being
able to do so. Non-compliance of these provisions renders the company
to suffer penalty prescribed under Section 628 and other Sections of
the said Act.
22. The defendants have not denied with regard to the correctness of the
balance sheet and also not explained why the defendants have shown
the amount of Rs. 65,29,084/- as current liabilities in favour of the
plaintiff. The defendants have shown the said liabilities continuous for
three years. In the case of Ravi Udyog Private Limited (Supra), the
Coordinate Bench of this Court relying upon two Supreme Courts'
judgments held that:
"34. The principle of law laid down in Razia
Begum v. Sahebzadi Anwar Begum reported in AIR
1958 SC 886 and Balraj Taneja v. Sunil
Madan reported in (1999) 8 SCC 396 cited by Mr.
Saha are quite plain that a party should be given a
chance to explain his admission and that in certain
cases the court may ask for additional clear
evidence. Very regrettably, the defendants has
been unable to explain the admission made in their
balance sheets. Even if it has tried to explain this
admission, the other evidence of corresponding
entries in the plaintiff's balance sheets the actual
receipt the money by the defendants in their
account and the contradictions in their defence, as
pointed out above do not disprove the facts
admitted by them in their balance sheets."
23. In the case of Usha Rectifier Corporation (India) Limited (supra),
the Hon'ble Supreme Court held that:
"10. The aforesaid position is further
corroborated by the Director's Report appearing at
p. 2 of the annual report for the year ending
December 1988, wherein it was mentioned that
during the year the Company developed a large
number of testing equipments on its own for using
the same for the testing of semi-conductors. Once
the appellants have themselves made admission in
their own balance sheet, which was not rebutted
and was further substantiated in the Director's
Report, the appellant now cannot turn around and
make submissions which are contrary to their own
admissions."
24. In the case of Bengal Silk Mills Co. (supra), the Hon'ble Supreme
Court held that an acknowledgment of liability that is made in a
balance sheet can amount to an acknowledgement of debt.
25. The defendants have taken the plea that the defendants under
instruction and pressure of its client i.e. IL&FS Engineering Ltd. have
drafted and prepared the purchase order dated 27th September, 2017
but the purchase order reflects that the defendants in its letter head
issued the purchase order address to the plaintiff and in the purchase
order, the defendants have categorically mentioned the address where
the materials is to be delivered. The defendants have not denied with
regard to the genuineness of the Purchase Order and receipt of the
materials. In the communication dated 25th November, 2019, the
defendants admitted that an amount of Rs. 65,29,083/- is due and
payable to the plaintiff but the defendants requested the IL&FS
Engineering Ltd. for payment to the plaintiff. The defendants have also
taken a plea that the IL&FS Engineering Ltd. is the necessary party but
the plaintiff has not made the said firm as party to the suit. This Court
considered the plea taken by the defendants and finds that the
purchase order issued by the defendants to the plaintiff and the
address which the defendants have mentioned, the plaintiff has
delivered the materials. The defendants have not denied with regard to
the purchase order and delivery of materials. The defendants in its
balance sheet continuous for three years declared liability of Rs.
65,29,083/- in favour of the plaintiff and the defendants have not
explained about the said declaration in the Audit Report.
26. This Court finds that the defendants have unequivocally admitted the
claim of the plaintiff and nothing remains to determine in the present
suit. In view of the above, the plaintiff is entitled to get decree for a sum
of Rs. 65,29,084/- along with interest at the rate of 10% per annum
from 4th April, 2018, till realization of the total amount. The defendants
are directed to pay an amount of Rs. 65,29,084/- along with interest at
the rate of 10% per annum from 4th April, 2018, till realization of total
amount.
27. G.A. (Com) No. 5 of 2025 is allowed. C.S. (Com) No. 378 of 2024
(Old No. C.S. 107 of 2022) is disposed of. Decree be drawn
accordingly.
(Krishna Rao, J.)
