Delhi High Court
M/S Inter Decor Incorporation vs M/S Braj Bhoomi Timbers on 29 May, 2024
Author: Vibhu Bakhru
Bench: Vibhu Bakhru
IN THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment delivered on: 29.05.2024
+ RFA(COMM) 36/2023 & CM No. 9910/2023
M/S INTER DECOR INCORPORATION ..... Appellant
versus
M/S BRAJ BHOOMI TIMBERS ..... Respondent
Advocates who appeared in this case:
For the Appellant : Mr. Abhishek Kumar and Mr. Krishan
Kumar, Advocates.
For the Respondent : Mr. Yashovir Singh, Advocate.
CORAM
HON'BLE MR JUSTICE VIBHU BAKHRU
HON'BLE MS JUSTICE TARA VITASTA GANJU
JUDGMENT
VIBHU BAKHRU, J
1. The appellant (defendant in the suit), is an individual and carries
on his business in the name and style of M/s Inter Décor Incorporation.
He has filed the present appeal impugning a judgment dated 31.10.2022
(hereafter the impugned judgment) passed by the learned Commercial
Court in CS(COMM) No.83/2021 captioned M/s Braj Bhoomi Timbers
v. M/s Inter Décor Incorporation. The respondent (plaintiff in the suit)
had filed the aforementioned suit for recovery of an amount of
₹18,71,839/- (Rupees Eighteen Lakhs Seventy-one Thousand Eight
Hundred Thirty-nine Only) along with interest. By the impugned
judgment, the respondent's claim was accepted and the learned
Commercial Court passed a decree for a sum of ₹18,71,839/- along with
interest at the rate of 8% per annum from the date of filing of the suit
till realization of the said amount.
2. The respondent (Mr. Anuj Bansal) is engaged in the trading of
plywood and other wooden materials in the name of his sole proprietary
concern M/s Braj Bhoomi Timbers. The respondent filed the afore-
mentioned suit claiming that the appellant had approached him through
a common friend and within a short period had gained his trust. The
respondent claimed that he had supplied goods (plywood) under three
separate invoices dated 06.08.2018 (Ex.CW1/A), 07.08.2018
(Ex.CW1/B) and 08.08.2018 (Ex.CW1/C) but the same remained
unpaid. The respondent claimed that he had pursued the appellant for
payment of his dues but after sometime the appellant started avoiding
and ignoring the respondent. In the circumstances, the respondent
caused a legal notice dated 21.07.2020 (Ex.CW1/E) issued to the
appellant calling upon the appellant to pay a sum of ₹18,71,839/-, which
was due and payable at the material time, within a period of fifteen days
from the date of receipt of the said legal notice.
3. The appellant responded to the said legal notice by a letter dated
11.12.2020 (Ex.DW1/1) claiming that it had received the legal notice
dated 21.07.2020 on 02/07.12.2020. The appellant claimed that the
respondent had requested that the payments be made in cash with the
assurance that the same would be returned later in exchange of a cheque.
However, the respondent's intention had turned dishonest and it had
issued the legal notice dated 21.07.2020.
4. Thereafter, the respondent instituted the suit as mentioned above.
The appellant filed an application, styled as an application under Order
VII Rule 11 of the Code of Civil Procedure, 1908 (hereafter the CPC)
praying that the suit be dismissed with cost. The appellant contended
that the cause of action had not arisen in Delhi as neither the agreement
was entered in Delhi nor the payment was to be made in Delhi.
Additionally, it claimed that the legal notice was issued by the
respondent from Ghaziabad, Uttar Pradesh and was responded to by the
appellant from Noida, Uttar Pradesh.
5. The said application was dismissed by the learned Commercial
Court by an order dated 30.03.2022.
6. On the basis of pleadings, the learned Commercial Court framed
the following issues:
"1) Whether the plaintiff is entitled for a decree against the
defendant in the sum of Rs.18,71,839/- alongwith interest, if
any, and if yes, at what rate and for which period? OPP
2) Whether this Court has no territorial jurisdiction to
decide the present suit? OPD
3) Relief."
7. The learned Commercial Court decided the issues in favour of
the respondent and against the appellant.
REASONS & CONCLUSION
8. The dispute between the parties relates to recovery of an amount
of ₹18,71,839/- being the value of the three invoices dated 06.08.2018,
07.08.2018 and 08.08.2018 for a sum of ₹5,66,400/-, ₹4,64,448/- and
₹8,40,991/-. There is no dispute that the goods covered under the three
invoices were delivered and received by the appellant. The appellant
does not dispute that it was liable to pay the invoiced amounts. It is the
appellant's case that in fact he had done so by making payments in cash.
Thus, the onus to prove that the payments were made rested on the
appellant.
9. The respondent had also produced a copy of the ledger account
of the appellant in his books for the period 01.08.2018 to 31.08.2018
(Ex.CW1/D). The said ledger account statement was also admitted.
10. The appellant examined himself (as DW1) and tendered an
affidavit affirming that the amounts claimed by the respondent were
paid in cash. He further claimed that the amount due had been paid in
cash at the request of the respondent. He also produced two documents,
that is, letter dated 15.11.2019 (Ex.DW1/2) signed by the respondent
requesting the appellant to make the payment in cash, if he was unable
to pay in cheque; and a letter dated 05.10.2020 (Ex.DW1/3) addressed
by the respondent to the appellant acknowledging receipt of an
aggregate amount of ₹18,71,839/- from December, 2019 to September,
2020.
11. The appellant's case essentially rested on the aforesaid evidence.
12. The respondent disputed its signature on the said letters and
denied issuing the same. The appellant (DW1) was cross-examined. He
acknowledged that he was aware that no cash transactions above
₹10,000/- were permissible in law. He also admitted that he did not
have the receipts of the separate payments claimed to have been over a
period from December, 2019 to September, 2020.
13. The learned Commercial Court did not accept that the documents
(Ex.DW1/2 and Ex.DW1/3) bore the signatures of the respondent. The
respondent was confronted with his signatures on the affidavit, invoices
and the disputed documents (Ex.DW1/2 and Ex.DW1/3). While he
admitted his signatures on the affidavit and invoices, he denied the
signatures on the disputed documents (letters dated 15.11.2019 and
05.10.2020).
14. The learned Commercial Court compared the admitted and
disputed signatures and concluded that the same were not similar. The
respondent had signed documents as Anuj Kumar Bansal with 'Kumar'
being reflected as 'Kr'. However, in the disputed signatures, the initial
'Kr' was missing. The learned Commercial Court also noted that the
letter 'j' in Ex.DW1/2 and Ex. DW1/3 had a loop whereas there was no
loop in the letter 'j' in the admitted signatures. Additionally, the learned
Commercial Court also noted that the appellant's response to the legal
notice did not separately mention the tranches in which the payments
were made. The Court also noted that the legal notice was dated
21.07.2020 and the appellant's response was dated 11.12.2020. Thus,
according to the appellant, it had made payments after issuance of the
legal notice but the specific payments were not mentioned in the reply
to the legal notice dated 21.07.2020, which the learned Commercial
Court found to be totally vague and bereft of details.
15. As noted hereinbefore, it is contended on behalf of the appellant
that he had made payments to the respondent in cash at his request. The
reply dated 11.12.2020 (Ex.DW1/1) signed by the appellant also
reiterates the same. The English translation of paragraph 4 of the
response is relevant and is set out below:
"4. THAT when your client was in need of funds and your
client asked my client to make the payment as was in dire need
of funds. Your client requested my client to make the
payment in cash with his assurance and promise that he would
return the same later on and would take firm's cheque from
my client. Such assurance has been given by your client in
writing to my client."
16. It is apparent from the above that appellant had claimed that it
had made payment in cash as the respondent was "in dire need of
funds". However, it is an admitted case that the goods covered under
the invoices dated 06.08.2018, 07.08.2018 and 08.08.2018 were
delivered much prior to the issuance of the legal notice. The same is
evident from the fact that the invoices bear the delivery note details as
well as the registration number of the motor vehicle in which the goods
were dispatched. It is not the respondent's case that the goods were
supplied on extended credit. Thus, it is evident that the appellant had
failed to make the payments within a reasonable period of receipt of the
goods. Even according to the appellant, the first tranche (which is
disputed by the respondent) of payment was made in December, 2019.
In this background, the contention that the appellant had made the
payment in cash as the respondent was in dire need of the same cannot
be believed. Admittedly, the appellant was liable to pay the amounts
and he was required to do so through banking channels. There is no
plausible reason provided for not making the payments through banking
channels.
17. We also find that there are no details as to the dates on which the
payments in cash were made. The letter dated 05.10.2020 (Ex.DW1/3)
sets out a tabular statement indicating the payments made and received.
The contents of the said letter are set out below:
"Dear Sir,
We have received a sum of Rs.18,71,839.00 (Rupees Eighteen
Lakhs Seventy One Thousand Eight hundreds Thirty Nine Only)
details as given below:-
Month of Payment Amount
December 2019 2,60,000.00
January 2020 2,60,000.00
February 2020 2,60,000.00
March 2020 1,60,000.00
June 2020 1,40,000.00
July 2020 2,90,000.00
August 2020 2,50,000.00
September 2020 2,51,839.00
Total 18,71,839.00
Now my account is clear and now I don't have any outstanding
on you. I will provide date wise receipt on demand."
18. Although, the appellant claims that the payments were made in
the manner as set out in the aforesaid letter dated 05.10.2020
(Ex.DW1/3), he has not provided the details, namely, the dates on which
the said payments were made during the period commencing from
December, 2019 to September, 2020. The appellant also does not have
receipts in respect of the tranches of the payments made. It is difficult
to accept that the appellant would have made payments of large amounts
in cash without any receipt or acknowledgement. Absent details of the
payments purportedly made and receipts of the same, it is difficult to
accept that the appellant had made the payments in cash as claimed.
19. The signatures on the letters dated 15.11.2019 and 05.10.2020
(Ex.DW1/2 and Ex.DW1/3) are materially different from the admitted
signatures of the respondent on his affidavit as well as on the invoices.
The difference in the signatures is clearly visible as the initials 'Kr',
which are part of the admitted signatures, are absent from the alleged
signatures of the respondent appearing on letters dated 15.11.2019 and
05.10.2020. The onus to prove that the signatures appearing on letters
dated 15.11.2019 and 05.10.2020 was that of the respondent was on the
appellant. However, the appellant did not produce any evidence to
establish the same. It was open for the appellant to have led the forensic
evidence, if necessary. However, the appellant chose not to do so.
20. The appellant has filed an application before this Court to refer
the disputed documents for forensic examination. However, the same
was not pressed and the counsel had proceeded to address the final
arguments. There is no explanation why such an application was not
made before the Learned Commercial Court.
21. Given the evidence led by the parties, we concur with the opinion
of the learned Commercial Court that the appellant had failed to
establish that he had made the payments in cash in discharge of the
amounts admittedly due to the respondent.
22. In the given circumstances, we concur with the decision of the
learned Commercial Court that the respondent is entitled to recover a
sum of ₹18,71,839/-. Since the transactions between the parties were
commercial transactions, the respondent would also be entitled to
reasonable interest to compensate for the time, value and money. There
is no cavil that interest at the rate of 8% per annum is a reasonable rate
of interest.
23. The next question to be examined is whether the learned
Commercial Court had the territorial jurisdiction to entertain the suit. It
is the respondent's case that it has an office within the territorial
jurisdiction of the Commercial Court and the goods were supplied from
Delhi. The respondent also claims that the agreement to supply was
finalized in Delhi and the order for delivering the goods was also
received in Delhi. In addition, it is contended that the payment was also
required to be made to the respondent in Delhi. However, the appellant
had disputed the same. The appellant claimed that the respondent's
office is located in Ghaziabad, Uttar Pradesh and the goods were
supplied to the appellant at Noida, Uttar Pradesh. The appellant also
relies on the fact that legal notice dated 21.07.2020 (Ex.CW1/E) was
issued by an advocate having office and residence at Gautam Budh
Nagar, Noida, Uttar Pradesh.
24. The invoices, which have remained outstanding, bear the address
of the respondent's office in Delhi. Thus, the invoices were issued by
the respondent from its office in Delhi. The respondent also claims that
he had dispatched the goods from Delhi. The respondent had received
the order to supply in Delhi and had dispatched the goods from Delhi.
Concededly, there are no written purchase orders. However, the
respondent has affirmed that he had received the verbal request to
supply at Delhi. The respondent was cross-examined and he denied the
suggestion that no business transaction had taken place between the
parties at Delhi. The invoices, which are not disputed, reflect that the
respondent's office is at Delhi and there is no serious dispute that the
purchase orders were received by the respondent verbally. Thus, based
on the preponderance of probabilities, we accept the respondent's claim
that he had received the orders at Delhi as there is no evidence to
indicate that the respondent had collected the orders or entered into
negotiations at any other business place. Insofar as the supply of goods
is concerned, neither of the parties have produced the GR notes nor the
documents which would indicate the place of dispatch of the goods.
However, the invoices mention the delivery notes as well as the GST
registration number. The invoices do not indicate that the goods were
delivered from an establishment outside Delhi. It is also important to
note that since the invoices were raised in Delhi and there are no
instructions indicating to the contrary, the payments were also required
to be received at Delhi. We, thus, accept that the payment for the goods
were also required to be received by the respondent at Delhi.
25. In A.B.C. Laminart (P) Ltd. & Anr. v. A.P. Agencies,
Salem: (1989) 2 SCC 163, the Supreme Court had observed as under:
"12. A cause of action means every fact, which if traversed, it
would be necessary for the plaintiff to prove in order to support
his right to a judgment of the court. In other words, it is a bundle
of facts which taken with the law applicable to them gives the
plaintiff a right to relief against the defendant. It must include
some act done by the defendant since in the absence of such an
act no cause of action can possibly accrue. It is not limited to the
actual infringement of the right sued on but includes all the
material facts on which it is founded. It does not comprise
evidence necessary to prove such facts, but every fact necessary
for the plaintiff to prove to enable him to obtain a decree.
Everything which if not proved would give the defendant a right
to immediate judgment must be part of the cause of action. But
it has no relation whatever to the defence which may be set up
by the defendant nor does it depend upon the character of the
relief prayed for by the plaintiff."
26. As noted above, in the present case, the invoices were raised in
Delhi from the respondent's office at Delhi and it is implied that
payments are required to be made to the said office.
27. In A.V.M. Sales Corporation v. Anuradha Chemicals Private
Limited: (2012) 2 SCC 315, the Supreme Court had observed as under:
"14. .... In the instant case, since the invoices for the goods in
question were raised at Vijayawada, the goods were dispatched
from Vijayawada and the money was payable to the respondent
or its nominee at Vijayawada, in our view, the same comprised
part of the bundle of facts giving rise to the cause of action for
the suit."
28. The suit is for recovery of money that was to be received by the
respondent in Delhi and therefore, we are unable to accept that no part
of the cause of action had arisen at Delhi. In Alchemist Ltd. & Anr. v.
State Bank of Sikkim & Ors.: (2007) 11 SCC 335, the Supreme Court
had held that the place where a material part of the cause of action
arises, the court would have the territorial jurisdiction to entertain the
suit.
29. In view of the above, the present appeal is dismissed. Pending
application is also disposed of.
VIBHU BAKHRU, J
TARA VITASTA GANJU, J
MAY 29, 2024
'gsr'
