[Cites 1, Cited by 0]
Delhi High Court
R.K Electrical Industries India Pvt. ... vs M/S Rishabh Industries on 1 April, 2026
Author: Prathiba M. Singh
Bench: Prathiba M. Singh
$~30
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of decision: 1st April, 2026
Uploaded on: 6th April, 2026
+ RFA(COMM) 406/2025 & CM APPL. 44328/2025, CM APPL.
49416/2025, CM APPL. 62547/2025
R.K ELECTRICAL INDUSTRIES INDIA PVT. LTD. AND ORS
.....Appellants
Through: Mr. Rajat Aneja, Mr. Karan Deep
Singh and Mr. Rishabh Mishra, Advs.
versus
M/S RISHABH INDUSTRIES .....Respondent
Through: Mr. Vijay Kumar Gupta and Mr.
Mehul Gupta, Advs.
CORAM:
JUSTICE PRATHIBA M. SINGH
JUSTICE MADHU JAIN
Prathiba M. Singh, J. (Oral)
1. This hearing has been done through hybrid mode.
2. The present appeal under Section 96 of the Civil Procedure Code, 1908
arises out of the impugned judgment and decree dated 6th March, 2025 passed
by the ld. District Judge (Commercial), Tis Hizari, Delhi by which the suit of
the Respondent/Plaintiff, being CS(Comm.) No. 76/2023, has been decreed
under Order 12 Rule 6 CPC, against the Appellant/Defendant in the following
terms:
"31. Accordingly, the suit of the plaintiff is decreed
in favour of the plaintiff and against defendant no. 1
only, under order 12 rule 6 CPC for outstanding
amount of Rs. 1,08,30,382/- (including principal
amount of Rs. 60,02,225/- and interest of Rs. 48,28,
157/- @ 18% per annum till 29-09-2022) along with
interest @ 18% per annum w.e.t'. 30-09-2022 till
realization along with costs of the suit."
3. The case of the Appellant is that there were two connected suits that
were filed before the same Court, details whereof are as under:
(i) CS (Comm.) No. 76/2023 titled M/s. Rishabh Industries v. M/s
R. K. Electrical Industries (India) Pvt. Ltd. & Anr.
(ii) CS (Comm.) No. 433/2023 titled M/s RK Electrical Industries
India Pvt Ltd v. M/s Bhavya Electrical & Ors.
4. According to the Appellant, these two suits relate to supplies of
"Kalinga" branded cables and other products by and on behalf of the
Appellant to one M/s. Bhavya Electricals, which is stated to be the distributor
of the Appellant. The said products were manufactured by the Respondent. It
is also stated that M/s. Bhavya Electricals had been introduced to the
Appellant by the Respondent, and that M/s. Bhavya Electricals owed a
substantial amount of money, approximately Rs. 60 lakh, to the
Appellant/Defendant.
5. Accordingly, Mr. Rajesh Jain, partner in the Respondent - M/s. Rishab
Enterprises, and Ms. Anshoo Kohli, authorized representative of the
Appellant, had entered into a Memorandum of Understanding dated 30th
August, 2020, whereby the parties agreed to certain terms in respect of their
business dealings and recovery of the amounts payable by M/s. Bhavya
Electricals to the Appellant.
6. It is stated that despite the above Memorandum of Understanding the
Respondent filed the subject suit i.e., CS (Comm.) No. 76/2023, seeking, inter
alia, recovery of Rs, 1,08,30,382, including the pre-suit interest @ 18% per
annum on the principal amount of Rs, 60,02 ,225/- till 29th September, 2022.
7. Thereafter, the Appellant also filed CS (Comm.) No. 433/2023 against
M/s. Bhavya Electricals as also the Respondent herein, seeking recovery of
its dues towards the goods supplied by the Appellant to M/s. Bhavya
Electricals. It is stated that both the suits are dependent on the Memorandum
of Understanding entered into between the parties herein, since the dues
payable by the Appellant were to be set off against the dues of M/s. Bhavya
Electricals due to the Appellant.
8. However, while the suit filed by the Appellant continues to remain
pending before the same Court, the subject suit has been decreed further to an
application under Order XII Rule 6, CPC filed by the Respondent.
9. It is the further submission of the ld. Counsel for the Appellant that the
case was not one where there was any admission by the Appellant for
decreeing the subject suit under Order XII Rule 6, CPC. It is submitted that
both suits ought to have been adjudicated together.
10. On the first date when the appeal was listed, vide order dated 24th July,
2025, the Court had directed as under:
"9. The Court has considered the matter. The
decree is a money decree against the
Appellant/Defendant. The execution proceedings
have already been filed and warrants of attachment
are also stated to have been issued. The next hearing
is stated to be coming up on 8th August 2025.
10. Under such circumstances, since this is the first
appeal raising an issue on merits which deserves
consideration, issue notice in the appeal as also in
the applications seeking stay and condonation of
delay in filing the appeal. The Respondent/ Plaintiff
be served through normal process as also through
Counsel who has filed the execution proceedings.
11. Subject to the Appellant/Defendant depositing a
sum of Rs.40,00,000/- with the Worthy Registrar
General of this Court on or before 15th September
2025, the warrants of attachment shall remain
stayed and the execution proceedings shall be
adjourned to a future date.
12. Let the Trial Court record in both the above
cases be requisitioned, digitized and placed on
record before the next date of hearing."
11. As can be seen from the above, the Appellant was directed to deposit a
sum of Rs. 40 lakhs with the worthy Registrar General, which has now been
deposited and the same is lying in an interest-bearing account.
12. Thereafter, the matter was also referred to mediation, however, the
mediation did not result in resolution of the dispute between the parties. In the
meantime, the Court had called for the TCR of both the subject suits.
13. An application was also moved by the Respondent seeking release of
an amount of Rs. 40 lakhs.
14. The Court had heard some submissions on 9th December, 2025 and after
considering the allegation of the Appellant that there is a back to back
arrangement between the Appellant, Respondent and M/s Bhavya Electricals,
the Court had directed Mr. Rajesh Jain, authorised representative of the
Respondent to be present.
15. In addition, it was directed that the Appellant would produce the
original Memorandum of Understanding dated 30th August, 2020 relied upon
by the Appellant.
16. It is the submission of Mr. Gupta on behalf of the Respondent that the
written statement would show that apart from setting up the MoU, there is no
denial by the Plaintiff that the goods had in fact been supplied by the
Respondent. According to Mr. Gupta explicit admission need not be there so
long as the written statement fails to show any plausible defence.
17. Heard. Mr. Rajesh Jain is present today. The original Memorandum of
Understanding has been produced. The Court has also pursued the pleadings
in respect of the subject suit.
18. The case of the Respondent/Plaintiff in the subject suit is that there was
supply of goods to the Appellant/Defendant in respect of which some part
payments were also made by the Appellant. It is stated that after consideration
of the part payments, a balance of Rs. 1,78,37,624/- was remaining, in respect
of which 13 cheques were issued. Thereafter, certain payments were made,
however finally there was a balance of Rs. 60 Lakhs that was remaining. The
subject suit was accordingly filed seeking a sum of Rs. 1,08,30,382.70/-
which included the interest component as well.
19. In the written statement, the plea of the Appellant is that there is a back
to back arrangement between M/s. Bhavya Industries with whom the
Respondent was also connected. In respect thereof, reliance is placed on the
Memorandum of Understanding dated 30th August, 2020 that was signed by
Mr. Rajesh Jain, where certain adjustments towards the dues of M/s. Bhavya
Industries to the Appellant were also agreed upon by Mr. Rajesh Jain. The
said MoU has been perused and the pleadings have also been perused.
20. The main emphasis of the Respondent/Plaintiff is on paragraphs 7 and
14 of the plaint in response to which the written statement reads as under:
Stand of the Respondent/Plaintiff:
"7. That Defendant no, 1 to 3 made various part
payments 'on account' in the said running mutual
account from time to time to the Plaintiff in respect
of the said account. On appropriating the said part
payments in the course of its business/transaction, a
balance principal sum of Rs. 1,78,37,624 (Rs. One
Crore Seventy Eight Lacs Thirty Seven Thousand
Six Hundred Twenty Four only) was due and
payable by the Defendants as on 22.04.2021
towards the supply of said goods; by Plaintiff to
Defendants. There was no further transaction done
after 22.04.2021 between the parties.
Xxx
14. That after the said legal notice & pre suit
mediation Defendants have made various part
payments from 01.05.2021 till 29 .09 .2022 as
shown in the account maintained by the Plaintiff in
ordinary course of its business, leaving a balance
principal sum of Rs . 60,0 2,225.70 besides accrued
interest as on 29.09.2022. No further payments have
been made by the Defendants till date. The total
outstanding dues of Rs. 1,08,30,382.70/- (One
Crore Eight Lac thirty Thousand Three Hundred
Eighty Two and Seventy paisa only) including
principal and interest @ 18% p.a.."
Stand of the Appellant/Defendant:
"7. That the content of para 7 are wrong false and
denied and vehemently denied. That the facts of
defendant no- 1 made various part-payments on
said account from time to time to the plaintiff after
the MOU become back to-back payment only after
minor arrangement as more dues from Bhavya to be
recovered. that the actual fact is that M/s Bhavya
Electrical by making a direct dealing with the
plaintiff caused huge financial loss by holding the
outstanding payments of the defendant with
malafide intentions. Defendant no- 1 filed a
separate suit and notice against the Bhavya
Electrical and Rishabh Industries for recovery of
amount Rs 1 Crore 14 lacs from M/s Bhavya
Electricals & the plaintiff in which the plaintiff is
also a party. It is denied that no further transactions
done with D1 after 22/04/2021.
Xxx
12. That the content of Para (12) are specifically
wrong and denied, that the Rishabh Industries
trying to mislead the d court and defendant and also
pressurised the Defendant's for the recovery of
above said amount which is not due. In spite of this,
there was one MOU has been signed between Mr.
Rajesh and D1 where some amount of Rupees has to
give each other and also mentioned that in future
case in any dispute raised that above amount will be
adjusted at a prior notice of three months. And
during the notice period transaction of goods not to
be stopped by the party. That the said legal notice
become stale and illegal."
21. In light of the pleadings, the following issues were framed in the suit
on 9th October, 2023:
"1. Whether the plaintiff is entitled to recovery of
Rs.1,08,30,382.70 along with interest from the
defendant as alleged? OPP
2. Whether the suit is not maintainable? OPD
3. Whether suit is bad for mis-joinder of necessary
parties? OPD
4. Whether the suit has no.1 been filed by proper
Authorized Representative as per law? OPD
5. Whether the suit is not maintainable in view of
MOU executed between the AR of the parties as
alleged? OPD
6. Relief."
22. Thereafter, at the stage of evidence, the application under Order XII
Rule 6 of CPC was moved by the Respondent/Plaintiff which led to the
impugned decree being passed.
23. The clear and unequivocal position of law under Order XII Rule 6 of
CPC is that there has to be an express or implied admission by the defendant
of 4the liability.
24. As can be seen from pleadings extracted above, there is no admission
which could have been held against the Appellant/Defendant. In fact, there is
not even an implied admission in the written statement. The clear case of the
Appellant was that in terms of the MoU responsibility was taken by the
Respondent/Plaintiff to clear the dues of M/s. Bhavya Electricals. Hence, the
amount was not owed by the Appellant to the Respondent. There is a reference
made to the MoU in the impugned decree, however, the ld. District Judge
proceeds to hold that the liability of M/s. Bhavya Electricals cannot be
imposed upon the Respondent/Plaintiff, and hence, the decree would be liable
to be granted.
25. In the opinion of this Court, Mr. Rajesh Jain, who is present today
admits his signatures on the MoU. The manner in which the MoU is worded
is as per trade customs, where the MoU is written in short sentences and
certain adjustments qua M/s. Bhavya Electricals appear to be mentioned in
this MoU between Mr. Rajesh Jain and the Appellant.
26. The question as to whether the liability of M/s. Bhayva Electricals
towards the Appellant can be imposed upon the Respondent or not would be
a question of trial. The sentences in the MoU would have to be properly
interpreted and oral evidence would be required. In fact, when the issues were
framed and one of the issues related to the MoU itself, the invoking of Order
12 Rule 6 CPC to pass a decree on admissions, was unwarranted - that too
when the defence which was set up in the written statement was far from an
admission.
27. In the opinion of this Court the grant of decree on admissions, in these
facts, is not tenable. Accordingly, the impugned judgement and decree is set
aside.
28. It is directed that the subject suit i.e., CS (Comm.) No. 76/2023 and the
suit filed by the Appellant against M/s. Bhavya Electricals being suit no. CS
(Comm.) No. 433/2023 shall be heard and adjudicated together.
29. The following are the details of both the suits.
(i) CS (Comm.) No. 76/2023 titled Rishabh Industries v. M/s R. K.
Electrical Industries (India) Pvt. Ltd. & Anr. and
(ii) CS (Comm.) No. 433/2023 titled M/s RK Electrical Industries
India Pvt Ltd v. M/s Bhavya Electrical & Ors.
30. The Court is informed that in the other suit, i.e. CS (Comm.) No.
433/2023, the matter is at the stage of final arguments.
31. Let the trial in CS (Comm.) No. 76/2023 be concluded within a period
of three months before the same Court and the ld. District Judge, Commercial
Court shall hear both the suits together and adjudicate them together finally.
32. The amount of Rs. 40 lakhs which is lying deposited with the worthy
Registrar General shall continue to remain deposited and retained in a FDR.
Once the judgment is pronounced in the two suits, parties would be free to
move an appropriate application in this regard for appropriate orders.
33. List before the Trial Court on 16th April, 2026.
34. If the physical TCR had been requisitioned, let the same be returned to
the Trial Court.
35. The original MoU is returned to the Appellant.
36. The appeal is disposed of in the above terms. Pending applications, if
any, also stand disposed of.
PRATHIBA M. SINGH
JUDGE
MADHU JAIN
JUDGE
APRIL 1, 2026/ys/msh
