Delhi District Court
Campus Activewear Limited vs Naresh Goyal Proprietor Of M/S Ankur … on 26 February, 2026
IN THE COURT OF DISTRICT JUDGE (COMMERCIAL)-04
DISTRICT WEST, TIS HAZARI COURTS, DELHI
CS (COMM)No. 212/2024
CNR NO. DLWT01-001798-2024
M/s Campus Activewear Limited
(Formerly M/s Campus Activewear Pvt. Ltd.)
Through its Authorised Representative
Mr. Sanjay Chhabra
Regd. Office At:
D-1, Udyog Nagar, Main Rohtak Road,
New Delhi-110041
Email: [email protected]
Ph. 9889995407 ................Plaintiff
VERSUS
Mr. Naresh Goyal,
Prop of M/s Ankur Shoe Sales
Regd. Office At:
B-3, Gobind Bagh,
Opp. Hira Bagh, Rajpur Road,
Patiala - 147001 ............Defendant
Date of institution of suit : 29.02.2024
Date of Argument : 03.02.2026
Date of pronouncement : 26.02.2026
SUIT FOR RECOVERY OF RS. 46,38,572/- ALONG
WITH P INTEREST @ 18% PER ANNUM DUE OUT OF
INVOICES RAISED TOWARDS GOODS SUPPLIED BY
THE PLAINTIFF
Appearance
Mr. Zeeshan Hashami and Mr. Ankit Parashar, Ld. Counsels for
plaintiff.
Mr. Varun Bedi, Ld. Counsel for defendant.
CS(Comm) No.212/2024 Campus Activewear Ltd. v. Naresh Goyal DoJ 26.02.2026 Page 1 of 27
JUDGMENT
1. The present suit is a commercial suit for recovery of Rs.
46,38,572/- along with interest @ 18% per annum, filed by the
Plaintiff, Campus Activewear Ltd., a public limited company
engaged in the business of manufacturing and sale of footwear.
2. Briefly stated the Plaintiff company was earlier a private limited
company and was converted into a public limited company on
22.11.2021, whereby all assets, liabilities, debts and recoveries are
vested in the Plaintiff. Another group company, Campus AI Pvt.
Ltd. (formerly M/s Ankit International), also merged with the
Plaintiff w.e.f. 01.04.2020 pursuant to approval of the Hon’ble
NCLT, and all its assets and liabilities were similarly taken over by
the Plaintiff.
3. The Plaintiff claims to enjoy substantial goodwill and reputation in
the domestic and international footwear market and is the
proprietor of various registered trademarks including “CAMPUS”.
Mr. Sanjay Chhabra is claimed to have been duly authorised by a
Board Resolution dated 09.11.2023 to sign, verify, institute and
pursue the present suit on behalf of the Plaintiff.
4. The Defendant is claimed to be the proprietor of M/s Ankur Shoe
Sales and is responsible for its day-to-day affairs. Based on the
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Plaintiff’s reputation, the Defendant is stated to have entered into
long-standing business transactions with the Plaintiff for supply of
footwear. A Distributor Agreement dated 06.12.2018 was executed
between the parties, wherein the Defendant acknowledged a
previous outstanding debt of Rs. 58,99,185/-. The agreement is
claimed to govern transactions during its validity period and
subsequent supplies were claimed to be governed by invoice
terms.
5. It is stated that pursuant to orders placed by the Defendant, the
Plaintiff supplied footwear and raised 70 invoices during the
period 09.04.2019 to 30.09.2020 amounting to Rs. 46,81,703/-.
Details of 70 invoices are mentioned in a table forming part of
paragraph No. 7 of the plaint. Last invoice was raised on
30.09.2020. Against this amount, the Defendant is stated to have
made only a partial payment of Rs. 43,131/-. As per the running
account maintained by the Plaintiff, an outstanding sum of Rs.
46,38,572/- is claimed to be due and payable by the Defendant,
inclusive of taxes.
6. It is stated that the Plaintiff duly supplied goods to the Defendant
without any complaint as to quality or delivery. It is stated that
despite repeated reminders and demands, the Defendant failed to
clear the outstanding dues leading to issuance of demand notices
dated 16.04.2021 and 19.04.2021 followed by exchange of replies
CS(Comm) No.212/2024 Campus Activewear Ltd. v. Naresh Goyal DoJ 26.02.2026 Page 3 of 27
and counter-replies. The Defendant also personally assured
payment on several occasions but failed to honour the same.
7. It is claimed that the Plaintiff has fully performed its contractual
obligations, whereas the Defendant has remained irregular and
defaulted in payment. Since the Defendant did not come forward
to pay the outstanding, legal action was contemplated and as the
dispute arose out of commercial transactions falling within the
scope of Section 2(1)(c) of the Commercial Courts Act, 2015,
hence the Plaintiff complied with Section 12A by initiating pre-
institution mediation; however, due to non-appearance of the
Defendant, a Non-Starter Report dated 16.10.2023 was issued.
Hence, the present suit filed for recovery of Rs. 46,38,572/- along
with interest @ 18% per annum from 30.09.2020 till actual
realization, along with other consequential reliefs.
8. After service of summons of the suit upon the defendant, the
defendant has filed written statement denying all allegations made
in the plaint and contends that the suit is false, frivolous, vexatious
and an abuse of the process of law. It is pleaded that the plaintiff
has suppressed material facts and has not approached the Court
with clean hands, rendering the suit liable to dismissal at the
threshold.
9. As a preliminary objection, the defendant asserts that the suit is
barred by limitation and liable to rejection under Order VII Rule
11 CPC. Relying upon Article 14 of the Limitation Act, 1963, it is
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contended that the alleged supplies pertain to the period between
09.04.2019 and 30.09.2020 and that the limitation of three years
begins from the date of delivery of goods. Since the suit has been
instituted on 29.02.2024, it is pleaded to be ex-facie time-barred.
The defendant alleges that the plaintiff has deliberately failed to
plead how the suit is within limitation and has attempted to
artificially create a cause of action by referring to ledger entries of
30.01.2023.
10. Defendant further contends that the suit is without cause of action,
bad for mis-joinder of causes of action, not maintainable in law,
and is based on false and fabricated documents. It is alleged that
the plaintiff has relied solely on its own unilateral ledger, which is
denied and disputed and for which strict proof has been demanded.
11. On merits, defendant denies that it approached the plaintiff for
purchase of footwear and states that it was the plaintiff who sought
to establish business relations. Defendant denies execution,
validity and binding nature of the alleged Distributor Agreement
dated 06.12.2018 and specifically denies having acknowledged
any previous debt of Rs. 58,99,185/-. It is also denied that the
agreement was operative till 06.12.2020 or that any transactions
were governed by its terms.
12. Defendant categorically denies having placed any purchase orders,
receiving any footwear, or agreeing to the terms and conditions
mentioned in the alleged invoices. Defendant further denies that
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the plaintiff supplied goods during the period 09.04.2019 to
30.09.2020 or raised invoices amounting to Rs. 46,81,703/-. Even
otherwise, it is pleaded that the alleged invoices are time-barred
under Article 14 of the Limitation Act.
13. Defendant also denies having made any payment of Rs. 43,131/- to
the plaintiff and disputes the existence of any running account
between the parties. The alleged outstanding amount of Rs.
46,38,572/- is denied in toto. The ledger statements, invoices,
vouchers and tax documents relied upon by the Plaintiff are
alleged to be forged, fabricated and incorrect and incapable of
forming the basis of any decree.
14. It is further denied that the plaintiff duly performed its contractual
obligations or that the goods, if any, were delivered to the
satisfaction of defendant. Defendant asserts that no amount is due
or payable and therefore the question of default in payment does
not arise.
15. While admitting issuance of demand notices as a matter of record,
defendant denies their contents and legality and reiterates that
there is no outstanding liability. Defendant also disputes the
territorial jurisdiction of the Court, contending that the Defendant
carries on business at Patiala, Punjab, and that no cause of action
arose within the jurisdiction of the present Court.
CS(Comm) No.212/2024 Campus Activewear Ltd. v. Naresh Goyal DoJ 26.02.2026 Page 6 of 27
16. Defendant denies the authorization of the Plaintiff’s alleged
representative to institute the suit and challenges the Plaintiff’s
compliance with statutory requirements, including under carriage
and transport laws. It is lastly contended that the suit is barred by
limitation, devoid of material particulars, and filed only to harass
defendant, and therefore deserves dismissal with exemplary costs.
17. Plaintiff thereafter filed replication wherein plaintiff denied the
allegation/averment of the written statement while reiterating the
contents of the plaint.
18. From the pleadings of the parties following issues were framed by
the Ld. Predecessor of this court, vide order dt. 24.07.2024:-
1. Whether the suit is barred by limitation? OPD
2. Whether the plaintiff has concealed the material facts and
has not come to court with clean hands? OPD
3. Whether the suit is contrary to the provisions , especially
Section 31 to 33 of The Sales of Goods Act? OPD
4. Whether the plaintiff is entitled to recovery of suit amount
alongwith interest, as prayed for? OPP.
5. Relief
19. In order to prove its case plaintiff examined its legal manager
Sujeet Kumar Mishra as PW1 who filed his affidavit Ex PW1/A
wherein he reiterated the contents of the plaint and relied upon
fresh copy of certificate of incoporation, master data of the
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plaintiff, master data of campus AI Pvt. Ltd., Form No. URC-1,
Form MGT 4 and 6, and Ministry of Corporate Affairs Receipt Ex
PW1/1 (colly), Board Resolution in favour of Mr. Sanjay Chhabra
Ex PW1/2, GST details of the defendant Ex PW1/3, Copy of
agreement dt 06.12.2018 Ex PW1/4 (OSR), Airway Bills/Delivery
proofs Ex PW1/5 (colly), Copy of ledger Ex PW1/6, Copies of Tax
Invoice/Credit Note/Voucher Ex PW1/7, Copies of demand
Notices, reply dt. 29.04.2021, Counter reply dt. 14.05.2021, reply
dt. 17.05.2021, emails dt. 14.05.2021, 18.05.2021 and 20.05.2021
alongwith Speed Post Receipt and traking reports filed with plaint
Ex PW1/8 (colly), Non Starter Report dt. 16.10.2018 Ex PW1/9,
affidavit under Section 63 of BSA Ex PW1/A-1 and authority
letter dt. 12.09.2024 Ex PW1/B. He was duly cross examined by
Ld. Counsel for defendant.
20. Plaintiff examined two witnesses PW2 Puneet Kumar from
Safexpress Pvt. Ltd. and PW3 from Gati Express & Supply Chain
Pvt. Ltd. to prove deliveries of goods. Plaintiff further examined
its Manager-Commercial Sh. Pradeep Kedia as PW4 who filed his
affidavit Ex PW4/A wherein he reiterated the contents of the plaint
relying upon Authority letter dt 28.02.2025 Ex PW4/1 and
documents relied upon by PW1. He was duly cross examined.
21. In support of his case, defendant examined himself as DW1 and
filed his affidavit Ex DW1/A wherein he denied the case of the
plaintiff. He was duly cross examined by the Counsel for plaintiff.
CS(Comm) No.212/2024 Campus Activewear Ltd. v. Naresh Goyal DoJ 26.02.2026 Page 8 of 27
22. Having heard rival submission of the Ld. Counsel for parties,
judicial file perused. Pleadings, oral and documentary evidence,
material on record as well as respective contention of the parties
taken into consideration. Issue-wise findings are hereinafter.
ISSUE No.1:- Whether the suit is barred by limitation? OPD
23. Onus to prove this issue is upon the defendant. Ld. Counsel for
defendant contended that alleged transaction of the plaintiff with
defendant would be governed by Article 14 of the Limitation Act
and suit to recover the price of unpaid goods had got to be filed
within 3 years of each invoice. He contended that first alleged
invoice was of 09.04.2019 and last invoices was of 30.09.2020 and
therefore to recover the price of invoice of 09.04.2019 plaintiff
was required to file his suit latest by 08.04.2022 and for the last
invoice, by 29.09.2023 and present suit having been filed on
29.02.2024 was clearly time barred.
24. Ld. Counsel for the plaintiff contended that plaintiff’s suit was
well within limitation relying upon judgment of Hon’ble Supreme
Court in Suo Moto Writ Petition bearing No. 3/2020 titled as Re:
Cognizance for Extension of Limitation. He further contended that
plaintiff was maintaining running account which shows that
defendant had lastly paid through IMPS on 30.01.2023 and had
also paid through IMPS on 15.06.2022, 27.06.2022, 28.07.2022,
31.08.2022 and 29.12.2022 besides the payment on 30.01.2023.
CS(Comm) No.212/2024 Campus Activewear Ltd. v. Naresh Goyal DoJ 26.02.2026 Page 9 of 27
25. Having heard rival submissions of the parties, this court has taken
note of the rulings of the Hon’ble Supreme Court in aforesaid Writ
Petition (c) No. 3/2020 which has excluded the period between
15.03.2020 and 28.02.2022 from computation of limitation period.
As per plaintiff, the first invoice involved in the present case was
raised on 09.04.2019 and therefore, as per the contention of the
defendant, the cause of action to recover the price of unpaid goods
supplied through invoice dt 09.04.20219 started on 09.04.2019 but
it got paused on 15.03.2020 and started ticking again on
01.03.2022 in accordance with the aforesaid ruling of the Hon’ble
Supreme Court.
26. Excluding the period between 15.03.2020 and 28.02.2022, plaintiff
was required to file its suit to recover the price of goods supplied
through invoice dt 09.04.2019 by 17.02.2024, as 266 days were
exhausted before 15.03.2020 and it was left with 729 days w.e.f.
01.03.2022. Before the expiry of limitation period calculated in
aforesaid manner, plaintiff approached DLSA on 05.09.2023 for
pre-litigation mediation and spent 41 days there when Non starter
report dt. 16.102023 was issued. Thus, plaintiff would get 41 more
days from 17.02.2024 for the completion of three years period for
the expiry of limitation period to recover the price of goods sold
through invoice dt 09.04.2019. Adding these 41 days, takes expiry
of the limitation period to 29.03.2024. Present suit was filed on
29.02.2024 almost one months before the expiry of limitation
period. When plaintiff’s suit to recover the price of goods of first
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invoice dt 09.04.2019 is not barred by limitation certainly,
limitation period to recover the prices of goods supplied through
subsequent invoices will not be said to be barred by limitation.
Hence, going by the contention of the defendant regarding
applicability of Article 14 of the Limitation Act qua each invoice,
plaintiff’s suit to recover the prices of goods sold through all the
invoices between 09.04.2019 and 30.09.2020 is not barred by
limitation. Accordingly, issue No.1 is decided against the
defendant and in favour of the plaintiff.
ISSUE No. 2:- Whether the plaintiff has concealed the material facts and
has not come to court with clean hands? OPD
27. Once again onus to prove this issue upon defendant. Defendant
neither in his pleading nor in his testimony pointed out as to what
facts, not to speak of material fact, have been concealed by the
plaintiff. In the absence of pointing out of any alleged
concealment, the present issue is got to be decided against the
defendant. Hence, issue No.2 is decided against the defendant and
in favour of the plaintiff.
ISSUE No. 3:- Whether the suit is contrary to the provisions, especially
Section 31 to 33 of The Sales of Goods Act? OPD
28. Onus to prove this issue is upon defendant. Section 31 to 33 of The
Sales of Goods Act, 1930 reads as under:-
“31. Duties, of seller and buyer.– It is the duty to the seller to
deliver the goods and of the buyer to accept and pay for them, in
accordance with the terms of the contract of sale.
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32. Payment and delivery are concurrent conditions.–Unless
otherwise agreed, delivery of the goods and payment of the price
are concurrent conditions, that is to say, the seller shall be ready
and willing to give possession of the goods to the buyer in
exchange for the price, and the buyer shall be ready and willing
to pay the price in exchange for possession of the goods.
33. Delivery. – Delivery of goods sold may be made by doing
anything which the parties agree shall be treated as delivery or
which has the effect of putting the goods in the possession of the
buyer or of any person authorised to hold them on his behalf.”
29. It is the case of the plaintiff that upon the order placed by the
defendant goods were delivered and accepted by defendant to be
paid for later on and plaintiff has filed the present suit to recover
the price of the goods so supplied. How the suit of the plaintiff is
contrary to the provisions of The Sales of Goods Act, 1930
especially Section 31 to 33, has not been explained by Ld. Counsel
for defendant. This Court on its own does not find that suit of the
plaintiff is contrary to the Sales of Goods Act, 1930 especially
Section 31 to 33. Hence, issue No.3 is decided against the
defendant and in favour of the plaintiff.
ISSUE No. 4:- Whether the plaintiff is entitled to recovery of suit amount
along with interest, as prayed for? OPP.
30. Onus to prove this issue is upon the plaintiff. It is the case of the
plaintiff that both plaintiff and defendant had been doing business
for 10 years before entering into distributor agreement dt
06.12.2018 executed between them for a period of two years i.e. till
06.12.2020. As per plaintiff in Para 2(xiii) of the said agreement,
the previous debt of Rs. 58,99,185/- was duly acknowledged as
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payable by the defendant. It is pleaded that during the normal
course of business, it supplied goods to the defendant on his order
and invoices of outstanding amount have been raised during the
said period and are governed by the terms of the said invoices and
that of agreement. Remaining invoices were governed by the terms
and conditions stated in the said invoices and a sum of Rs.
46,81,703/- is claimed to be outstanding.
31. Defendant has denied any liability to pay or to clear outstanding
and has substantially devoted himself to raise the bar of limitation.
He has denied every pleading and contention of the plaintiff,
however, he did plead that it was not him but plaintiff that had
requested him to develop business relations with them. He,
however, did not plead whether or not any business relation took
place. He categorically denied execution of distributor agreement
dt 06.12.2018 or that he had admitted therein previous liability of
Rs. 58,99,185/-. He was thus in denial mode.
32. His testimony, however, in cross examination was completely not
in consonance with his stand in written statement. He admitted that
he used to sell shoes of brand Liberty and that of the plaintiff. He
admitted that he had been selling the shoes of the plaintiff since
year 2000. He claimed that all payments due to the plaintiff were
made on time. He admitted that he used to have running account
with the plaintiff. He had shown his ignorance as to why the
present dispute had arisen as he had made all the payments that
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were due. He deposed that all goods supplied by the plaintiff were
delivered at his Patiala address. He also deposed that goods were
supplied to him via trucks through courier companies. He deposed
that all goods that were supplied were received by him and receipts
were signed by him. He deposed that he had paid for the goods that
were supplied to him. He, however, did not remember whether the
amount of goods supplied to him ranged from Rs 10 to 50 lacs. He
further deposed that all the business with plaintiff was done before
Nov, 2020. He also admitted his signature on the Distributor
Agreement dt 06.12.2018 at point A. He also admitted that courier
receipt/LR/delivery proof Ex PW2/1 (colly) bore his signature
available page No. 4, 13, 14 and 36 forming part of Ex PW2/1. He
further deposed that he could not say whether the goods that were
stated to be delivered through invoices in question were delivered
to him or not as long time had passed and because the records were
destroyed in the fire in godown in Nov, 2020.
33. Above testimony of defendant when examined in conjunction with
position taken by him in his written statement, exposes him bare
thereby destroying his credibility. One fail to understand that when
defendant had so much facts concerning transaction between
plaintiff and himself, then why he chose to deny distributor
agreement dt 06.12.2018, denied admission of previous liability in
agreement dt 06.12.2018, did not plead alleged entire payments of
all goods received by him etc. Defendant did not choose to make
responsible pleading appropriate to transaction between the
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parties. The responsibility of speaking truth in the court is not only
of plaintiff but it is equally the duty of the defendant to speak truth
in the court and place all relevant materials.
34. Further, he did not bring any evidence to the effect that there was
fire at his place in Nov, 2020 and all his business records were
burnt and therefore in the absence of evidence to that effect, his
non-production of his running account being maintained with
plaintiff renders him liable for drawing of an adverse inference,
particularly regarding his case set up during the cross examination
of the plaintiff’s witness that goods were not delivered under the
invoices in question.
35. Plaintiff examined two witnesses from transporter to prove
delivery of goods to the defendant. PW2 Sh. Puneet Khanna from
Safexpress Pvt. Ltd. brought 50 original delivery receipts. He
deposed that delivery receipts bore the signature and seal of M/s
Ankur Shoe Sales. He further deposed that delivery receipts were
the records which were maintained by Safexpress Pvt. Ltd. for the
service of transportation rendered to Campus Activewear Pvt. Ltd.
All 50 receipts were exhibited as Ex PW2/1 (colly) and next time
he further brought four more receipts and same were exhibited as
Ex PW2/2(colly). In his cross examination he deposed that he did
not know Naresh Goyal and that all the bilties Ex PW2/1 (colly)
and Ex PW2/2 (colly) were issued by Safexpress Pvt. Ltd. He
deposed that order for transportation of the concerned goods was
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given to Safexpress by the plaintiff company. He further deposed
that goods were dispatched from different places like Baddi,
Ambala, Dehradun. He further deposed that he could not tell from
the invoices as to what were the good transported as the bilties
were handed over to the consignee. He again said at some places
that the word ‘footwear’ was mentioned in some of the bilties.
36. PW3 Sh Vijay Kumar Singh from Gati Express & Supply Chain
Pvt. Ltd. brought original docket No. 293410057 having e-way bill
No. 2880177287735 Ex PW3/B bearing the signature and stamp of
the defendant. In his cross examination he deposed that he did not
know Naresh Goyal and that docket Ex PW3/B was issued by Gati
Express & Supply Chain Pvt Ltd. He further deposed that goods
concerned were ordered by the defendant from the plaintiff and
that goods were dispatched from Baddi, HP. He deposed that he
was not aware of the details of the goods.
37. From the cross examination of PW2 and PW3 it is clear that
defendant is not disputing delivery of goods from/through bilties
Ex PW2/1(colly), Ex PW2/2 (colly) and docket Ex PW3/B. All of
them have seal of defendant firm and many of them bears the
signature of the defendant himself. He also admitted his signature
on four of them. Many of the invoices bears his signature which
can be said on the basis of comparison under Section 73 of the
BSA. Further in view of defendant’s credibility having been
destroyed as a result of his testimony in cross examination when
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compared with his stand in his WS, his attempt to dispute delivery
of goods does not inspire confidence of the court and rather
plaintiff’s witness PW2 and PW3 have proved delivery of goods of
plaintiff through Courier vide receipts/dockets Ex PW2/1 (colly),
Ex PW2/2 (colly) and Ex PW3/B pertaining to period between
09.04.2019 to 30.09.2020. Moreover, aforesaid facts got
corroborated by defendant’s admission about his signature on
some of the bilities forming part of Ex PW2/1 (colly) and about
the fact that goods used to be delivered to him through trucks.
Further, defendant in his cross examination categorically did not
deny receipts of goods through the invoices in question. Thus,
going by the preponderance of probability, plaintiff has
successfully proved the delivery of goods through the Transporters
vide their receipts Ex PW2/1(colly), Ex PW2/1 (colly) and Ex
PW3/B.
38. Once delivery of goods is proved onus shifts upon the defendant to
prove its payment. Ld. Counsel for defendant contended that
witnesses PW2 and PW3 did not know what were the goods but
contention of the Ld. Counsel for defendant is not sustainable
because initially defendant did not take any stance in his WS and
later on when deliveries were proved, he himself did not plead or
explain as to what goods were received from plaintiff through
transporters if not the ‘footwears’ manufactured by plaintiff.
Hence, inability of PW2 and PW3 to tell what goods were
delivered will not be fatal to the case of the plaintiff. Moreover, a
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staffer from transporter who brought record is not supposed to
know the contents of the goods packed in the packages.
39. Ld. Counsel for the defendant sought to entangle the issue of
liability of the defendant stating that plaintiff did not explain the
opening balance of Rs. 48,53,199/- as on 01.04.2019 shown in the
ledger Ex PW1/6 and also the fact of two debit entries of Rs.
18,50,000/- and Rs. 16,60,000/- on 03.09.2019 and 04.09.2019
respectively. However, attempt of the Counsel for defendant could
not keep the attention of the court engaged for long for two
reasons, firstly when plaintiff’s witnesses particularly PW1 and
PW4 were in the witness box no question were asked to them to
explain the opening balance of Rs. 48,53,199/- as on 01.04.2019
and secondly defendant in his cross examination admitted his
signature on Distributor Agreement dt 06.12.2018 Ex PW1/4
wherein defendant in paragraph 2(xiii) admitted his previous
liability of Rs. 58,99,185/-, even though in his written statement he
had denied execution of such agreement. From 06.12.2018 to
31.03.2019 defendant might have discharged part liability and
that’s why opening debit balance as on 01.04.2019 was Rs.
48,53,199/-. Defendant did not lead any evidence to the effect that
between 06.12.2018 and 31.03.2019 he had cleared the said
outstanding of Rs. 58,99,185/-. It is true that if plaintiff had placed
on record the ledger of previous period as well, that would have
been better but under the circumstances as discussed above same is
not fatal to the case of the plaintiff.
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40. The other contention regarding the debit entries on 03.09.2019 and
04.09.2019, it must be said that if defendant wanted to highlight
discrepancy or questioned the said entries, first of all he should
have specifically pleaded about the same or at least should have
put questions to the concerned witness PW1 and PW4. Ld.
Counsel for defendant contended that he had specifically asked
both the witnesses as to whether plaintiff was in the business of
money lending. This question is very general question whereas this
would have been relevant if plaintiff had pleaded that it had lent
any money to defendant or to other at the instance of the
defendant. No one can understand that this general question was
with respect to specific debit entries on 03.09.2019 and 04.09.2019
in the ledger. Even this court till the time defendant did not raise
above contention, was wondering as to why defendant had asked
PW1 and PW4 as to whether or not plaintiff was in money lending
business. Surprises in adversarial litigation is not permitted except
to a limited extent during the cross examination of a witness. In
civil suits both parties must know each others case and must be
aware well in advance as to what all they are required to meet at
trial. Hence, above raised contention of the defendant is not
sustainable.
41. Nevertheless, objecting to the contention of the defendant being
beyond pleading, it was submitted by Counsel for plaintiff that the
aforesaid debit entries were with respect to the channel financing
facilities availed by the defendant as per clause 2(xiv) of the
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agreement dt 06.12.2018 Ex PW1/4. He submitted that with
respect to said facility, plaintiff was liable to pay to the bank the
outstanding loan amount upon the default by the defendant. He
contended that aforesaid entries under the heading “refund” related
to the said payments which were made by the plaintiff to Yes Bank
upon default by the defendant to pay the said lender bank and
therefore the ledger correctly reflected the outstanding amount due
as it considered all the payments which had been made by the
defendant.
42. If at all the defendant had disputed the particular debit entries
specifically in his pleading the way he had done during final
argument, or at least during the cross examination, plaintiff would
have had chance to explain the same with evidence but defendant
in his WS raised only vague plea that too in whole denial mode
and later on admitted many of the aspects of dealings between the
plaintiff and defendant as noted above, therefore defendant does
not stand to gain by raising the aforesaid issue now in final
argument even though explanation put forth by the plaintiff in final
argument cannot be accepted without evidence. Thus, the
contention of the defendant is not hereby sustained in law for the
reason discussed above.
43. Ld. Counsel for the defendant further attempted to destroy the case
of the plaintiff by drawing attention of the court to the minor
discrepancy and contradictions in the testimonies of the PW1 and
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PW4. But this court is of the view that the minor discrepancies or
contradictions in the testimonies of the PW1 and PW4 are bound
to happen when both witnesses are from different branches of the
plaintiff. Nevertheless, their minor discrepancies/contradictions in
the testimonies does not make any dent in case of the plaintiff
regarding supplies of goods through invoices in question from
09.04.2019 to 30.09.2019 coupled with proofs of delivery and
admissions of the defendant as noted above. Further, defendant did
not chose to send reply to the legal notice dt. 19.04.2021 forming
part Ex PW1/8 (colly) wherein plaintiff had demanded the
outstanding as claimed in the present suit, even though he chose to
sent reply and counter rejoinder to legal notice dt 16.04.2021.
Hence, defendant’s silence to legal notice dt 19.04.2021 also calls
for drawing of an adverse inference against him.
44. Ld. Counsel for defendant had also raised an objection qua the
territorial jurisdiction of this court, however, no issue in this regard
was framed vide order dated 24.07.2024. Ld. Counsel for
defendant contended that defendant carries on business in Patiala,
Punjab, which does not fall within the jurisdiction of this court. He
further contended that plaintiff has not placed on record any
document showing that the goods were delivered or that any
contract was executed within the jurisdiction of this court. Perusal
of record reflects that distributor agreement dt 06.12.2018 was
executed in Delhi. Plaintiff in its pleading had averred that the
same was executed at the registered office of the plaintiff which is
CS(Comm) No.212/2024 Campus Activewear Ltd. v. Naresh Goyal DoJ 26.02.2026 Page 21 of 27
within the jurisdiction of this court. The defendant in its cross
examination had admitted his signatures on the distributor
agreement dt 06.12.2018 meaning thereby that he was a party to
this agreement. The execution of agreement dt 06.12.2018 gives
rise to part cause of action arising within the territorial jurisdiction
of this court. Therefore, as per Section 20( c) of CPC, this court
has jurisdiction to try the present suit.
45. Much emphasis was laid by Ld. Counsel for the defendant on the
fact that in the two legal notices dated 16.04.2021 and 19.04.2021
issued by plaintiff, different amounts were demanded, and thus
two legal notices of the plaintiff itself destroys the case of the
plaintiff. However, contention of Ld. Counsel for defendant is not
sustainable. In the notice dated 16.04.2021, the plaintiff demanded
a sum of Rs. 88,144/- towards three specific invoices of November
2019, whereas in the subsequent notice dated 19.04.2021, the
plaintiff demanded the entire outstanding of Rs. 46,55,438/- for the
period 09.04.2019 to 30.09.2020. It is to be kept in mind that a
legal notice is not a pleading and does not determine substantive
rights of parties. Any inconsistency, omission or mistake in a legal
notice cannot, by itself, defeat a claim otherwise proved by reliable
documentary and oral evidence. Legal notices are only a mode of
pre-litigation demand and not determinative of the merits of the
case, and any clerical, arithmetical or drafting error therein cannot
override proved accounts, admitted dealings and established
liability.
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46. In the present case, the evidence on record clearly establishes that
the parties were having a running and continuous business
account, with long-standing dealings extending over many years.
The ledger account Ex PW1/6, supported by delivery proofs Ex
PW2/1 (colly), Ex PW2/2 (colly) and Ex PW3/B, along with
admissions of the defendant, clearly establishes that goods worth
Rs. 46,81,703/- were supplied during the relevant period and that
the amount claimed represents the outstanding balance after
accounting for all payments and adjustments.
47. The first legal notice dated 16.04.2021 appears to have been issued
with reference only to three invoices of November 2019, possibly
arising out of a limited reconciliation exercise or immediate
dispute regarding those invoices. However, upon a detailed
reconciliation of the entire running account, the plaintiff issued the
subsequent comprehensive notice dated 19.04.2021 demanding the
entire outstanding amount. Merely because the first notice did not
refer to the full outstanding does not, in law, amount to waiver,
abandonment or admission of limitation of claim.
48. The accounts between parties must be examined as a whole, and
not in fragmented isolation. Where a running account exists, the
cause of action is continuous, and the outstanding balance
becomes payable upon final settlement or termination of business
relations. Therefore, issuance of a partial demand notice does not
preclude the creditor from raising a comprehensive claim
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subsequently, especially when no settlement or accord and
satisfaction is pleaded or proved by the debtor.
49. As regards the contention that the three invoices referred in the
first notice do not appear in the ledger Ex PW1/6, the same, in the
considered opinion of this Court, does not discredit the entire
ledger or claim. In commercial accounting practice, invoices may
sometimes be adjusted, merged, squared off, or re-accounted
through credit notes, debit notes or journal entries. For the said
amount there appears to be journal entry on 25.09.2022. The
defendant, despite having full opportunity, failed to confront PW1
or PW4 specifically regarding these three invoices, failed to
summon his own books of accounts, and failed to produce any
contrary ledger or statement nor could prove fire at his place. In
such circumstances, minor accounting discrepancies cannot
override the overwhelming documentary and oral evidence
establishing supply of goods, delivery thereof, and subsisting
outstanding liability.
50. Further, the defendant has admitted the business relationship ( not
in WS but in his cross examination as well as in his reply to legal
notice vide reply dt 29.04.2021 and rejoinder dt.17.05.2021),
admitted receipt of goods, admitted running account, admitted his
signatures on multiple delivery receipts, and admitted execution of
the distributor agreement acknowledging earlier liability. His plea
of destruction of records due to fire remains unsupported by any
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documentary evidence, thereby attracting adverse inference under
Section 114(g) of the Indian Evidence Act.
51. The minor variations in figures reflected in the two legal notices,
the plaint, and internal accounting tables does not amount to
material contradictions so as to demolish the plaintiff’s case. It is
trite in law that civil cases are decided on the touchstone of
preponderance of probabilities and not on mathematical precision.
Once supply of goods, delivery, running account, and
acknowledgment of business relationship stand proved, minor
discrepancies in accounting details cannot be permitted to defeat
substantive justice.
52. On the contrary, the defendant has completely failed to discharge
the onus of proving payment. He has not produced any receipt,
bank statement, ledger, voucher, or independent proof of discharge
of liability. His denial in the written statement stands contradicted
by his own admissions in cross-examination, thereby rendering his
defence unreliable and unworthy of credit.
53. Hence, in view of above discussion and reasoning, issue No. 4 so
far as principal outstanding is concerned, is decided in favour of
the plaintiff and against the defendant.
54. Plaintiff has also demanded interest @ 18 % per annum on the
outstanding from 30.09.2020. But perusal of ledger maintained by
the plaintiff in the name of the defendant firm shows that
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defendant had not been paying bill wise which means plaintiff and
defendant were having running account. Hence to claim interest at
the rate of 18% per annum would not be justifiable.
55. Nevertheless, since the transaction between the plaintiff and
defendant was admittedly commercial and any holding of amount
adversely affect the party whose money has been held up, hence
plaintiff is certainly entitled to interest to compensate for the loss
which it suffered due to non-availability of fund.
56. In Central Bank of India v. Ravindra (2002) 1 SCC 367, the
Supreme Court held interest must be reasonable. In the case of
Cimmco Limited Versus Pramod Krishna Agrawal 2019 SCC
OnLine Del 7289, it is held as follows;
“3……….Hon’ble Supreme Court has now mandated that
lower rates of interest be granted and therefore the pre-suit and
also the pendente lite and future interest is liable to be reduced
by this Court. Reliance is placed upon the judgments in the
cases of Rajendra Construction Co. v. Maharashtra Housing &
Area Development Authority, (2005) 6 SCC 678, McDermott
International Inc. v. Burn Standard Co. Ltd., (2006) 11 SCC
181, Rajasthan State Road Transport Corporation v. Indag
Rubber Ltd., (2006) 7 SCC 700, Krishna Bhagya Jala Nigam
Ltd. v. G. Harischandra, (2007) 2 SCC 720 & State of
Rajasthan v. Ferro Concrete Construction Pvt. Ltd. (2009) 3
Arb. LR 140 (SC).”
57. In view thereof since it is commercial transaction plaintiff is
hereby held entitled to simple interest @ 9% per annum on the
outstanding from 01.04.2021 (from the start of new accounting
year) till whole amount is realised. Further since it was the conduct
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of the defendant which compelled the plaintiff to initiate legal
action against the defendant, therefore, plaintiff is also entitled to
the cost of the suit.
58. In view of above discussion and reasoning, issue No.4 is decided
in favour of the plaintiff and against the defendant to the extent
that plaintiff is hereby held entitled to recovery of principal sum of
Rs. 46,38,572/- along with simple interest at 9% p.a.
Relief
59. In view of the findings recorded on all issues hereinbefore, the suit
of the plaintiff is hereby allowed and a decree for recovery of Rs.
46,38,572/- (Rupees Forty Six Lakhs Thirty Eight Thousand Five
Hundred and Seventy Two Only) is hereby passed in favour of the
plaintiff and against the defendant, with cost and simple interest @
9% p.a. from 01.04.2021 till actual realisation.
60. Decreesheet be prepared accordingly.
61. File be consigned to Record Room after necessary compliance.
HARISH Digitally signed by
HARISH KUMAR
KUMAR Date: 2026.02.26
15:32:59 +0530
(Harish Kumar)
District Judge (Commercial)-04
Announced in the open court District West, Tis Hazari Courts
(Judgement contains 27 pages) Delhi/26.02.2026
CS(Comm) No.212/2024 Campus Activewear Ltd. v. Naresh Goyal DoJ 26.02.2026 Page 27 of 27
