M/S HARI DASHAN SEVASHRAM PVT. LTD. vs M/S PAUL SALES PVT. LTD.

* IN THE HIGH COURT OF DELHI AT NEW DELHI
Reserved on: 28th November, 2023
% Pronounced on: 23rd February, 2024

+ CS(COMM) 300/2018

M/S HARI DASHAN SEVASHRAM PVT. LTD. ….. Plaintiff
Through: Mr. Sanjeev Mahajan & Mr. Rishabh Varshney, Advocates.

versus

M/S PAUL SALES PVT. LTD. ….. Defendant
Through: Appearance not given.

CORAM:
HON’BLE MS. JUSTICE NEENA BANSAL KRISHNA

J U D G M E N T
NEENA BANSAL KRISHNA, J.

I.A. 5726/2023 (u/O VI Rule 17 of CPC, 1908)
1. By way of present application, the applicant/defendant seeks to amend the Written Statement.
2. The applicant/defendant has submitted that in order to clarify all the averments made in the Written Statement, it intends to put all the relevant pleadings and materials in one place to obviate the need to refer to multiple documents in multiple case files and to ensure that the dispute between the non-applicant/plaintiff and the applicant/defendant, is laid to rest for adjudication of the present Suit in a holistic manner.
3. The applicant/defendant seeks to insert after Paragraph 9 of the Preliminary submissions, details regarding the Agreement executed and acted upon by the parties since 2006 and explain that the defendant has continued to exclusively work for the plaintiff under the same.
4. The defendant further wishes to add that after the meeting in June 2006, the defendant on 1st July, 2006, issued an advertisement in all leading news papers under the instructions of the plaintiff, which stated that, “from immediate effect all the Dhoop, Agarbatti, and Havan Samagri as Manufactured by Hari Darshan Sevashram Pvt. Ltd will be sold throughout India by its Marketing Division M/s Paul Sales Pvt. Ltd” and that the general public was advised to contact the defendant. The defendant wants to add that it had incurred huge expenditure amounting to Rs 13,99,839/- in publishing these advertisements which shows that there has been a mutual understanding and agreement between the parties for marketing and sales of dhoop, agarbatti and other allied products, shall be managed by the defendants.
5. By adding Paragraph 9.4 the defendants wants to add that Rising Sun Fragrances, the firm operated by Sh. Goldy Nagdev and other related persons, which comes under the umbrella of the plaintiff Company herein, had issued a Special Power of Attorney, in favour of the Director of the Defendant Company, authorizing him to appoint various stockists and distributors of his choice in various cities, for sale of the plaintiff’s products. Further, this Special Power of Attorney had been concealed by the plaintiff and is now being placed on record by the defendant.
6. The applicant/defendant intends to add Paragraph-11.1 to explain outstanding entries in the books of either party, which have to be examined in juxtaposition with the financial records of the corresponding party to see the true scope of debt that one party is liable to discharge.
7. The applicant/defendant further wishes to add that the records of the non-applicant/plaintiff and its sister concerns have to be examined in juxtaposition with the books of the applicant/defendant to determine the true quantum of dispute between the parties.
8. The applicant/defendant also intends to insert in the preliminary submissions after Paragraph-23, Paragraph-24 to explain the transactions and its claims against the non-applicant/plaintiff and its sister concerns i.e., M/s Rising Sun Fragrances and M/s Rising Sun Aromas & Spirituals Pvt. Ltd. and in respect of the unpaid commission for the sales of chandan tikka, losses suffered, excess amounts charged by the non-applicant/plaintiff, loss of interest, value of gift and cash coupons and the claim for the value of the defective/damaged goods returned by the applicant/defendant to the plaintiff and also claim for the credit notes against various schemes rolled out by the applicant/defendant for sales promotion of the goods of Hari Darshan Brand.
9. The defendant in its Written Submissions has relied on the case of BDR Development Pvt. Ltd v. Narsingh Shah 2021 SCC OnLine Del 3889 and BDR Development Pvt. Ltd v. Narsingh Shah in SLP (C) No. 15087-15091/2021 decided on 27.09.2021 to argue that the application under Order VI Rule 17 of CPC should be considered on merits, before the power under Order XII Rule 6 CPC, is exercised.
10. The present application is contested by the non-applicant/plaintiff who has submitted in its Reply, that all the pleadings sought to be inserted by way of amendment in the Written Statement, already stand withdrawn by the applicant/defendant vide Order dated 17.02.2020 and have been made a part of the Suit bearing No. 368/2023.
11. The present amendment seeks to incorporate the pleadings which are not relevant to the present Suit and are intended to delay the adjudication of the Application under Order XII Rule 6 of the Code of Civil Procedure, 1908 (hereinafter referred to as “CPC, 1908”).
12. It is further submitted that the alleged claims against certain entities i.e., M/s Rising Sun Aromas & Spirituals Pvt. Ltd and M/s Rising Sun Fragrances are sought to be made even though these two Companies are not even a party to the present Suit.
13. It is further asserted that the applicant/defendant had filed a Counter-Claim against the non-applicant/plaintiff and the two sister concerns for whom the applicant/defendant had moved an Application under Order I Rule 10 of CPC, 1908 seeking impleadment of two sister Concerns as defendant Nos. 2 and 3. However, vide Order dated 17.02.2020, the claims were held to be separate against the plaintiff and the proposed defendant Nos. 2 and 3 and consequently, the said Application under Order I Rule 10 of CPC, 1908 was dismissed. Therefore, the Counter Claim was withdrawn with liberty to file a substantive Suit against the non-applicant/plaintiff in accordance with law.
14. Despite this, the applicant/defendant has instituted another Suit bearing No. CS(COMM) 368/2023 again making claims against three entities in one common Suit. The proposed amendments, therefore, have already been adjudicated and cannot be made part of the present Suit. The Order dated 17.02.2020 has attained the finality despite which the present application has been filed. Furthermore, the proposed amendments are an afterthought and barred by limitation and laches.
15. Also, the proposed amendments are neither necessary nor relevant for adjudication of the disputes raised in the present Suit.
16. Reliance has been placed on the case of Revajeetu Builders and Developers v. Narayanaswamy and Sons & Ors. (2009) 10 SCC 84 and Vijay Hathising Shah & Anr. v. Gitaben Parshottamdas Mukhi & Ors. (2019) 5 SCC 360, in this regard.
17. Therefore, it is submitted that the present application is without merit and is liable to be dismissed.
18. Submissions heard.
19. The record shows that the plaintiff had filed the present Suit for Recovery of the amount of Rs. 4,57,55,464.41/- along with interest @ 18% per annum from the defendant.
20. The defendant had filed its Written Statement supported with the Counter Claim containing all the averments as sought to be incorporated in the Written Statement by way of the proposed amendments herein.
21. Since the Counter Claims and the defenses of the defendant were not only against the plaintiff but also against its two sister Concerns, the applicant/defendant moved the Application under Order I Rule 10 of CPC, 1908 for impleadment of two sister Concerns. However, vide Order dated 17.02.2020, it was observed that the cause of action against the two sister Concerns was separate and independent of the claim made against the plaintiff and the proposed impleadment of the parties was dismissed.
22. Also, the applicant/defendant withdrew the Counter Claim with liberty to pursue its remedy in accordance with law.
23. The proposed amendments now sought to be introduced by way of present application, are identical claims which were contained in the Counter Claim, wherein the applicant/defendant had asserted that the different amounts that are recoverable from the two sister Concerns of the plaintiff.
24. In the case of Revajeetu Builders and Developers (Supra), the Apex Court laid down principles which ought to be taken into consideration while deciding an application for amendment, which are:
“1) whether the amendment sought is imperative for proper and effective adjudication of the case;
2) whether the application for amendment is bonafide or mala fide;
3) whether the amendment should not cause such prejudice to the other side which cannot be compensated adequately in terms of money;
4) refusing amendment would in fact lead to injustice or lead to multiple litigation;
5) whether the proposed amendment constitutionally or fundamentally changes the nature and character of the case; and
6) as a general rule the court should decline amendments if a fresh suit on the amended claims would be barred by limitation on the date of the application.”
25. Thus, an amendment which is not relevant for the adjudication of the disputes in issue, is not bonafide or fundamentally changes the nature of the Suit, must be rejected.
26. As already noted in the Order dated 17.02.2020, whatever maybe the claims of the applicant/defendant against the two sister Concerns, they are not relevant nor material for adjudication of the disputes raised in the present Suit.
27. For the foregoing discussion, there is no merit in the present application which is hereby dismissed.
I.A. 14517/2018 (u/O XII Rule 6 r/w Section 151 of CPC, 1908)
28. By way of present application, the plaintiff seeks a judgment on admission, for Recovery of Rs. 4,57,55,464.41/- along with interest @ 18% per annum on the said amount w.e.f. 08.09.2017.
29. It is submitted that the plaintiff has filed the Suit for Recovery of Rs. 4,57,55,464.41/-. Prior to the present Suit, the defendant had instituted a Suit being CS(COMM) 732/2017 Paul Sales Pvt. Ltd. vs. Hari Darshan Sevashram Pvt. Ltd. for relief of Injunction against the plaintiff herein.
30. In the said Suit, the defendant (which was the plaintiff in that Suit) had filed the Statement of Accounts in respect of the purchases made by the defendant from the plaintiff. As per the Statement of Account that was filed by the defendant, the amount of Rs. 4,65,83,000/- had been shown due and payable by the defendant to the plaintiff.
31. After 31.08.2017, the defendant had made further purchases of products amounting to Rs. 1,17,21,173/- and during this period, an amount of Rs. 1,50,00,000/- had been received by the plaintiff from the defendant and after accounting the amount so received, a sum of Rs. 4,57,55,464.41/- is due and payable by the defendant.
32. It is submitted that the claim of the plaintiff for the said amount is admitted and established from the Ledger Account of the defendant itself. Hence, a judgement on admission for the said amount, is sought against the defendant under Order XII Rule 6 of CPC, 1908.
33. The present application has been contested by the defendant by of way of its Reply, wherein all the averments and contentions made in the present application have been denied.
34. It is asserted that the assertions of the plaintiff are not based on the pleadings of the answering defendant, but on an incomplete Ledger Account filed by the defendant in collateral proceedings, which cannot be considered in isolation without reference to the connected proceedings made thereto.
35. The defendant in its pleadings in the earlier Suit CS(COMM) 732/2017 had stated that the Ledger Accounts only represent that there were regular transactions between the parties but the same in no way depicted the complete accounts between the parties. Further, the Ledger Account does not include various commissions, discounts, credits etc., to which the defendant is entitled and have been reflected by it in its Counter-Claim (which is now withdrawn).
36. Moreover, the defendant had also filed an Application under Order II Rule 2 of CPC, 1908 in the earlier Suit being CS(COMM) 732/2017, wherein it had categorically asserted that the Suit was filed due to an emergent situation for seeking an Injunctory Relief, while the rights were reserved to file a comprehensive Suit for Recovery at a later stage, after complete reconciliation of accounts. It is asserted that the plaintiff has not been able to point out even a single admission which can be termed as unequivocal, clear and positive, on the part of the defendant.
37. The claim of the applicant/plaintiff rests merely on a Ledger Account with no corresponding proof. In fact, the plaintiff has itself conceded that the account between the parties was a running and continuous account. The plaintiff has nowhere claimed that it ever closed the dealings/transactions with the answering defendant or formally closed the accounts of the defendant, whereafter the alleged amounts remained due and payable. In fact, there existed a recurring, running and mutual account between the parties. It is denied that there is any admission on the amounts due as is claimed, to the plaintiff.
38. It is submitted that the present application is without merit and is liable to be dismissed.
39. The plaintiff in its Rejoinder reiterated its submissions made in the application. It was further asserted that the Statement is Account filed by the defendant itself gives an unequivocal, clear and positive admission of the amount due which is nowhere disputed by the defendant. There is a clear admission of its liability of Rs. 4,65,83,541.41p in the Statement of Account of the defendant.
40. It is submitted that for a decree to be passed under Order XII Rule 6, CPC, admission can be made either in pleadings, documents or otherwise. In the present case the admission is contained in pleading and documents of the Defendant.
41. Therefore, the plaintiff is entitled to a judgement based on the admission of the admitted amount.
42. The plaintiff in its Written Submissions have reiterated their contentions made in the application and the Rejoinder.
43. Reference has been made to the case of Association for Voluntary Action v. The Child Trust & Anr. 2013 SCC OnLine Delhi 3826; Uttam Singh Duggal & CO. Lts. v. United Bank of India & Ors. (2000) 7 SCC 120; Usha Rectifier Corporation (India) Lts. v. Commissioner of Central excise (2011) 11 SCC 571; Karam Kapahi & Ors. v. Lal Chand Public Charitable Trust & Anr. (2010) 4 SCC 753; Thimmappa Rai v. Ramanna Rai & Ors. (2007) 14 SCC 63 and P.P.A. Impex Pvt. Ltd. v. Mangal Sain Metal 2009 SCC OnLine Del 3866, to discuss the law on passing of decree on the basis of admission under Order XII Rule 6.
44. The learned counsel for the defendant in its Written Submissions, had relied on the case of Dinesh Sharma v. Krishna Kainth 2022 SCC OnLine Del 1142 to explain the scope of order XII Rule 6 and what constitutes an admission.
45. It is asserted that the purported admissions made in the documents cannot be viewed in isolation without considering the pleadings or averments in the Counter Claim. Reference had been made to the case of Durga Builders P. Ltd v. Motor and General Finance Ltd. & Anr 2012 SCC OnLine Del 1995.
46. It is asserted that statements in running Accounts are not admissions, warranting a judgment under Order 12 Rule 6 CPC. Reliance has been placed on the case of Sandeep Singh v. Hindustan Spirits Ltd, 2023 SCC OnLine Del 678 to assert that there is no general proposition of law that statements in balance sheets of a Company, would always operate as an acknowledgment of a liability.
47. The application is liable to be dismissed in view of the judgment of Himani Alloys Ltd. v. Tata Steel Ltd., (2011) 7 SCR 60, wherein it has been held that entries in running Accounts, cannot serve as a basis for a judgment on admissions under Order XII Rule 6, CPC.
48. Mere existence of the entries in the books of accounts at one point in time cannot be construed to be an admission of debt. There has to be further evidence to prove payment of the money which may appear in the Books of Accounts for a person to be charged with the liability thereunder, as held in the case of Chandradhar Goswami & Ors. v. Gauhati Bank Ltd. (1967) 1 SCR 898.
49. In V3S Infratech Ltd. v.NBCC and Others 2017 SCC OnLine Del 7433, while dismissing an application under Order XII Rule 6, CPC, a Coordinate Bench of this Hon’ble Court has held that judgment on admissions cannot be passed as the Defendant therein had preferred a Counter Claim which warranted adjudication.
50. It is asserted that in light of observations made V3S Infratech Ltd. (Supra), the present application warrants dismissal as the defendant has categorically averred that it is entitled to recover INR 6,85,16,027/- from Hari Darshan, in pursuance whereof it had also preferred a substantial Counter Claim (though now withdrawn).
51. Submissions heard.
52. The entire claim of the plaintiff for a Judgement on admissions, rests on a Ledger Account that was filed by the defendant in its Suit for Injunction bearing No. CS(COMM) 732/2017 against the applicant/plaintiff.
53. Before delving into the merits of the case, it would be pertinent to first discuss under what circumstances a decree can be made under Order XII Rule 6 of the CPC.
54. In the case of Himani Alloys Ltd. (Supra), the Hon’ble Supreme Court had observed that Order XII Rule 6 CPC is an enabling provision and the court has to exercise its judicial discretion after examination of facts and circumstances, keeping in mind that a judgment on admission is a judgment without trial which permanently denies any remedy to the defendant, by way of an appeal on merits. Therefore, unless the admission is clear, unambiguous and unconditional, the discretion should not be exercised to deny the valuable right of a defendant to contest. It is only when the admission is clear that it may be acted upon.
55. The Division Bench of Delhi High Court in Vijay Myne v. Satya Bhushan Kaura, (2007) 142 DLT 483 (DB) explained the scope of Order XII Rule 6 of CPC and observed that as the purpose of Order 12 Rule 6, CPC is to render speedy judgments and save the parties from going through the rigmarole of a protracted trial. It is to enable the Court to pronounce the judgment based on an admission, when the admissions are sufficient to entitle the plaintiff to get the decree. “The admissions can be in the pleadings or otherwise, namely in documents, correspondence etc. These can be oral or in writing. The admissions can even be constructive admissions and need not be specific or expressive which can be inferred from the vague and evasive denial in the written statement while answering specific pleas raised by the plaintiff. The admissions can even be inferred from the facts and circumstances of the case.” In order to pass a judgement on admissions, the Court has to scrutinize the pleadings in detail and conclude that the admissions are unequivocal, unqualified and unambiguous. Further, the Court is also required to ignore vague, evasive and unspecific denials as well as inconsistent pleas taken in the written statement and replies.
56. The Division Bench of this Court in Delhi Jal Board v. Surendra P. Malik, (2003) 104 DLT 151 laid down the following tests:—
“9. The test, therefore, is (i) whether admissions of fact arise in the suit, (ii) whether such admissions are plain, unambiguous and unequivocal, (iii) whether the defense set up is such that it requires evidence for determination of the issues and (iv) whether objections raised against rendering the judgment are such which go to the root of the matter or whether these are inconsequential making it impossible for the party to succeed even if entertained. It is immaterial at what stage the judgment is sought or whether admissions of fact are found expressly in the pleadings or not because such admissions could be gathered even constructively for the purpose of rendering a speedy judgment.”
57. The law on judgment based on admissions was summarized in the case of Dinesh Sharma (Supra), wherein a reference was made to the case of Himani Alloys Ltd. (Supra) and Delhi Jal Board (Supra), to observe:
“i) a judgment based on admission under Order XII Rule 6 of the CPC is not a matter of right, rather is a matter of discretion of the Court;
(ii) to constitute a clear, unequivocal, unambiguous and unconditional admission, the Trial Court has to see the overall effect of the pleadings and documents. For a judgment on admission to be passed under Order XII Rule 6 of the CPC, the Court has to see as to whether the admission of facts is plain, unambiguous, and unequivocal and go to the root of the matter, which would entitle the other party to succeed;
(iii) if the issue raised, involve the mixed question of fact and law, the same has to be adjudicated by way of evidence;
(iv) the discretion conferred under Order XII Rule 6 of the CPC is to be exercised judiciously and not arbitrarily.”
58. Thus, it is well established that for a judgment to be based on admissions, the admissions have to be unequivocal and unambiguous, leading to no other conclusion but to a decision in favour of the plaintiff.
59. In the present case, it is the case of the applicant/plaintiff itself that an amount of Rs. 4,65,83,000/- was shown to be due and payable to the applicant/plaintiff after which there have been transactions of the amount Rs. 1,17,21,173/- and that the sum of Rs. 1,50,00,000/- has been received from the defendant.
60. The averments made by the applicant/plaintiff itself shows that the Ledger Account was a running and current Account, as has been claimed by the defendant. There being no finality to the Ledger Account and the business having been continued inter se the parties, the plaintiff cannot rely on some entry in the Ledger Account filed by the defendant which is asserted to be an incomplete Statement of Account, to claim that there is an admission of any amount. From the averments of the applicant/plaintiff itself, it is evident that there is a continuing business that there are continuing business transitions and thus, reliance cannot place on one entry after which the business has continued, to say that it is an admitted amount.
61. For the foregoing discussion, there is no merit in the present application which is hereby dismissed.
CS (COMM) 300/2018
62. Vide Order dated 17.02.2020, the suit was listed before the learned Joint Registrar for admission/ denial of documents.
63. List the suit for admission/ denial of remaining documents on 16.03.2024 before the learned Joint Registrar.

(NEENA BANSAL KRISHNA)
JUDGE
FEBRUARY 23, 2024
Nk

CS(COMM) 300/2018 Page 1 of 14