Delhi District CourtCivil Judge ­6 vs M/S Aimil Pharmaceuticals (India) Ltd on 24 July, 2013IN THE COURT OF SH. SUSHANT CHANGOTRA,
                           CIVIL JUDGE ­6, 
         WEST DISTRICT, TIS HAZARI COURTS, DELHI. 
Suit No.292/12
Sh. Rajender Ahuja
Proprietor M/s Kaushal Oil Traders,
B­6/134, Sector­8, Rohini,
Delhi­110085
                                            .....Plaintiff

                         Versus


M/s Aimil Pharmaceuticals (India) Ltd.
Registered office at:­
2994/4, Street No.17, Ranjit Nagar,
New Delhi­110008.


Also at Manufacturing Unit:­
A­13/2, Naraina Industrial Area,
Phase­I, New Delhi­110028.
                                                               .....    Defendant

                                Date of filing of Suit :   19.04.2010

                                   Date of decision        :   24.07.2013

                               JUDGMENT1.       The brief facts of the plaintiff's case are that the plaintiff is 



Rajender Ahuja Vs M/s Aimil                                            Page No.1of18
       carrying on his business in the name and style of M/s Kaushal Oil 

      Traders. Defendant is a company incorporated under theCompanies 

      Actand is engaged in manufacturing and sale of pharmaceuticals 

      products.2.         The plaintiff sold the light diesel oil to defendant for a total 

      amount of Rs. 6,87,184.12/­ on its demand between 13.01.2007 to 

      14.04.2007.   The defendant made part payment by way of cheque 

      but   some   of   the   cheques   were   dishonoured.   The   officials   of 

      defendant told the plaintiff not to present the cheques  and requested 

      for some time. In the month of October 2008, defendant refused to 

      pay the amount and entertain the plaintiff.3.         As   on   25.10.2008   plaintiff   was   in   possession   of   fifteen 

      cheques for a total sum of Rs. 1.5 Lacs issued by defendant towards 

      part   payment   on   account   of   defendant   liability.   Out   of   even   said 

      fifteen cheques, seven cheques were dishonoured and eight were not 

      presented on the request of defendant.4.         The   plaintiff   is   also   entitled   to   interest   @   18%   p.a   as   the 

      parties   had   agreed   to   pay   the   said   interest   in   case   of   delay.   The 

      plaintiff issued a legal notice dated 25.10.2008 demanding payment 

      of   Rs.   2,45,479/­   with   interest   @   18%   p.a   from   01.10.2008   till 



Rajender Ahuja Vs M/s Aimil                                                   Page No.2of18
       payment of entire amount from the defendant. The notice was duly 

      received by defendant. Thereafter, defendant made part payment of 

      Rs.   40,000/­   by   three   pay   orders   i.e   bearing   no.   310209   dated 

      29.01.2009   for   Rs.   10,000/­,   310265   dated   31.01.2009   for   Rs. 

      20,000/­ and 310283 dated 02.02.2009 for Rs. 10,000/­ respectively. 

      In   lieu   of   the   aforesaid   pay   orders,   the   plaintiff   handed   over   4 

      cheques bearing no. 072083 to 072086. After adjusting the amount 

      of Rs. 40,000/­, the plaintiff issued another notice dated 30.11.2009 

      and demanded payment of Rs. 2,05,479/­ with interest @ 18% p.a. 

      Inadvertently sum of Rs. 15,000/­ paid by the defendant in first week 

      of   April   2009   was   not   adjusted   in   the   amount   due   towards   the 

      plaintiff.   After   reconciliation   of   accounts   an   amount   of   Rs. 

      1,60,287/­   including   interest   up   to   31.01.2010   @   18%   p.a     was 

      legally due as on 31.01.2010. The plaintiff again demanded the said 

      sum   by   legal   notice   dated   17.10.2010   which   was   received   on 

      20.10.2010 but no payment was made.                   Thus,   the   plaintiff 

      prayed   for   decree   of   Rs.   1,61,500/­   with   pendent   lite   and   future 

      interest @ 18% p.a till its realization.5.        The defendant filed the WS and took preliminary objections. 

      The defendant pleaded that the present suit is barred by limitation.Rajender Ahuja Vs M/s Aimil                                                Page No.3of18
       No amount is due to be paid by defendants. On merits, the defendant 

      pleaded that plaintiff has submitted inflated and bogus invoices. The 

      defendant was constrained to stop the realization of cheques given 

      for payment of L.D.O to plaintiff for inflated and bogus invoices. 

      The defendant denied that it was under obligation to pay interest @ 

      18% or at any other rate. The admitted that Rs. 40,000/­ was paid by 

      defendant   to   plaintiff.   The   remaining   averments   of   plaint   were 

      denied. Thus, defendant prayed that the suit be dismissed.6.        From the pleadings following issues were framed;(i)   Whether the suit of the plaintiff is barred by Limitation?  OPD(ii)  Whether the plaintiff is entitled for recovery of Rs. 1,61, 500/­ 

      as   prayed?   OPP(iii)   Whether   the   plaintiff   is   entitled   for   interest   @   18%   p.a   as 

      prayed, if so for what period? OPP(iv)  Relief.7.        In   order   to   prove   his   case,   plaintiff   appeared   as   PW­1.   He 

      tendered his affidavit Ex. PW­1/A and documents Ex. PW­1/1 to Ex. 

      PW­1/33. He closed his PE after cross examination on 26.11.2011. 

      Defendant was given several opportunities to lead DE but defendant 

      failed to lead DE despite repeated opportunities. Finally, DE was 



Rajender Ahuja Vs M/s Aimil                                                 Page No.4of18
       closed vide order dated 18.07.2013.8.        I have heard the arguments of counsels for the parties. The 

      counsel for plaintiff argued that the only defence of the defendants is 

      that the suit is within limitation. The first transaction of goods was 

      dated   13.01.2007.   The   defendants   admitted   the   issuance   of   letter 

      Ex.PW­1/29. The aforesaid letter is acknowledgment of existence of 

      liability. Thus, period of limitation is extended in view ofsection 19of the Indian Evidence Act. He further argued that the plaintiff was 

      maintaining   the   running   account   of   defendants.   Thus,   the   suit   is 

      within limitation. He also argued that the case of the plaintiff has 

      been   proved   by   plaintiff.   The   defendants   have   not   denied   the 

      receiving of goods as alleged in the plaint. The defendants have not 

      led any evidence to rebut the onus of issue no.2 and 3. Hence, the 

      suit may be decreed.9.        On the other hand, counsel for defendant vehemently argued 

      that the suit is barred by notification no. 318 dated 05.06.2000, as no 

      one can sell light diesel oil without having proper license. PW­1 in 

      his   cross   examination   admitted   that   he   did   not   have   the   license. 

      Hence, the suit is barred byIndian Contract Act. He further argued 

      that   the   statement   of   account   Ex.   PW­1/26   is   a   computerized 



Rajender Ahuja Vs M/s Aimil                                               Page No.5of18
        statement. The plaintiff has not filed any certificateu/s 65 Bof the 

       Indian Evidence Act. Hence, the same is inadmissible and cannot be 

       read. He further argued  that  there is no averment  that plaintiff is 

       maintaining running account. The plaintiff has also failed to prove 

       the amount which was to be paid by defendant as per as its own case. 

       Thus, prayed that the suit may be dismissed.10.       In   rebuttal,   counsel   for   plaintiff   argued   that   there   is   no 

       suggestion to PW­1 that the statement of account is false. There is 

       also no suggestion that certificateu/s 65Bof Indian Evidence Act 

       has not been filed. The plaintiff has not pleaded the defence that the 

       contract is void. Even otherwise, the plaintiff does not deny having 

       received the goods. Hence, the defendant cannot refrain from paying 

       amount due to the plaintiff.11.       I   have   considered   the   arguments   and   gone   through   the 

       evidence carefully. My issue wise findings are given as below:Issue no.112.       Onus   to   prove   this   issue   was   placed   on   the   defendant. 

       However,Section 3of the Indian Evidence Act provides that even if 

       no defence regarding limitation has been taken, still the plaintiff has 

       to prove that his case is within limitation.Rajender Ahuja Vs M/s Aimil                                              Page No.6of1813.        The case of the plaintiff is that the first transaction took place 

       on 13.01.2007. The aforesaid fact has not been specifically denied. 

       Therefore, it is deemed to have been admitted. Thereafter, parties 

       had admittedly carried out several transactions. The defendant has 

       admitted   the  letter   Ex.   PW­1/29. It  shows  that  the defendant  had 

       made   payment   of   Rs.   10,000/­,  Rs.   20,000/­   and   Rs.  10,000/­   on 

       different dates. It is also necessary to note that neither of the bills is 

       for   the   sum   of   Rs.   10,000/­,   Rs.   20,000/­   and   Rs.   10,000/­ 

       respectively.   Thus,   admittedly   the   defendant   used   to   make   part 

       payments of the bills.14.InBharat Skins Corporation Vs. Taneja Skins Co. Pvt. Ltd186 (2012) DLT 290 (DB), Hon'ble High Court laid down the law of 

       limitation in relation to non mutual running accounts.  The relevant 

       excerpts of the lawlaid down bythe hon'ble High Court is given as 

       below:"In view of the above discussion, since the dealings between the 

       parties disclose a single contractual relationship i.e. of buyer and 

       seller between them, the account between them cannot be termed 

       as a mutual account. As a necessary corollary,Article 1of the 




Rajender Ahuja Vs M/sAimil                                             Page No.7of18
       Schedule to the Limitation Act, 1963has no application in the 

      present case.Having held thatArticle 1of theSchedule to the Limitation Act, 

      1963does   not   apply   in   the   present   case,   the   further   question 

      which arises for consideration is, whichArticle in the Schedule 

      to the Limitation Act, 1963applies in the present case.

      The observations in the decision reported as (1856) 18 C.B. 325 

      Bonsey v Woodsworth are also worthy of being noted; and are as 

      under:­

      "where a tradesman has a bill against a party for any amount, in 

      which the items are so connected together that it appears that 

      the dealing is not intended to terminate with one contract, but to 

      be continuous, so that one item, if not paid, shall be united with 

      another, and form one continuous demand, the whole together 

      forms but one cause of action and cannot be divided."The   upshot   of   the   above   discussion   is   thatArticle   14of   theSchedule to the Limitation Act, 1963does not apply to suits for 



Rajender Ahuja Vs M/s Aimil                                             Page No.8of18
        recovery   of   money   due   on   a   running   and   current   but   a   non­

       mutual account between the buyer and seller i.e. an account of 

       the kind with which we are dealing.There being noArticle in the Schedule to the Limitation Act, 

       1963dealing with suits for recovery of money due on running 

       and current but non­mutual accounts, in such circumstances, the 

       residual article viz.Article 113applies to such suits.

         UnderArticle 113, the period for limitation for filing a suit is 

       three years and the same begins to run when the right to sue 

       would   accrue  when   claim  was  denied  in  response  to the legal 

       notice dated 26.06.1985 on 13.07.1985 but since Rs. 7,000/­ was 

       paid   on   13.07.1985   and   24.07.1985   (Rs.   2,000/­   on   the   former 

       date   and   Rs.   5,000/­   on   the   latter   date),   limitation   would 

       commence from 24.07.1985. The suit being filed on 02.09.1985, 

       governed for purposes of limitation byArticle 113the suit would 

       be within limitation."15.        Thus, the perusal of the aforementioned facts shows that there 

       were multiple transactions and the defendants made part payments to 


Rajender Ahuja Vs M/s Aimil                                            Page No.9of18
        the plaintiff. Hence, there is no doubt that the plaintiff maintained 

       non­mutual   running   accounts   of   defendants.   The   legal   notice   Ex. 

       PW­1/27   was   issued   on   17.03.2010.   Therefore,   the   period   of 

       limitation was to run from 17.03.2010. The present suit has been 

       filed on 19.04.2010 i.e within the period of limitation of three years.16.        Even   otherwise   the   letter   Ex.   PW­1/29   shows   that   the 

       defendant admitted the existence of jural relationship between the 

       parties. Thus, it also operates as acknowledgment of debtu/s 18of 

       the   Limitation   Act.   Further   the   letter   admittedly   contains   the 

       payment   of   sum   of   Rs.   10,000/­,   Rs.   20,000/­   and   Rs.   10,000/­ 

       respectively   by   way   of   cheques   as   part   payment,   therefore,   the 

       aforesaid   fact   of   making  of part  payment  by way of cheque also 

       extended   the   period   of   limitation   even   u/s     19   of   theIndian 

       Limitation Act. Hence, the letter dated 05.09.2009 further extended 

       the period of limitation by three years.17.  Thus, the suit is within limitation from all the aspects. Accordingly, 

       this   issue   is   decided   against   the   defendant   and   in   favour   of   the 

       plaintiff.Issue no.218. Onus to prove this issue was on the plaintiff. The plaintiff had to 



Rajender Ahuja Vs M/s Aimil                                                Page No.10of18
        prove   existence   of   legally   enforceable   debt.Section   23of   the 

       Indian   Contract   Act  provides   that   the   agreements   which   are 

       forbidden by law are void. The void agreements cannot be enforced. 

       Admittedly   the   plaintiff   had   supplied   light   diesel   oil   to   the 

       defendants. The aforesaid sale and purchase of legally enforceable 

       debt   is   governed   byEssential   Commodities   Act.   The   Gazette 

       notification passed in this respect bearing no. 318 dated 05.06.2000 

       has been placed on record.19.Section 57of the Indian Evidence Act clearly provides that 

       the   court   can   take   judicial   notice   of   Gazette   notifications.   The 

       notification   no.   GSR   856   (E)   II,   provides   that,   "No   person   shall 

       either acquire, store or sell solvents included in the schedule, without 

       a license issued by the State Government or the District Magistrate 

       or any other officer authorized by Central or the State Government." 

       The schedule attached there to contains the entry of light diesel oil at 

       serial no.15. Thereby meaning that the sale of light diesel oil without 

       obtaining   license   issued   by   State   Government   or   Central 

       Government in that respect is prohibited.  The plaintiff in his cross 

       examination admitted that he does not have any license for sale of 

       light diesel oil supplied to defendants.Rajender Ahuja Vs M/s Aimil                                               Page No.11of1820.        I have also considered the argument of counsel for plaintiff to 

       the effect that there are no pleadings qua the agreement being void 

       and   enforceable.   The   fact   whether   the   agreement   is   void   as   per 

       notification as mentioned above is a mixed question of fact and law. 

       As discussed above the sale of light diesel oil without having any 

       license   is   barred.   The   plaintiff   himself   admitted  that   he   does   not 

       have any license. Thus, when the plaintiff has himself admitted the 

       aforesaid fact, therefore, there was no need for the defendant to lead 

       any evidence to prove it. The bar was only for the defendant from 

       leading the evidence beyond pleadings.21.        It is also a settled proposition of law that the plaintiff has to 

       prove its case.InAddagada Raghavamma and Anr vs Addagada 

       Chenchamma and Anr1964 AIR 136, 1964 SCR (2) 933, the 

       Hon'ble Apex Court has held that, "There is an essential distinction 

       between burden of Proof and onus of proof, burden of proof lies 

       upon the person who has to prove a fact and it never shifts, but the 

       onus of proof shifts."22.        The burden to prove his case was on the plaintiff. In order to 

       establish that plaintiff is entitled to recovery of sum prayed for, the 

       plaintiff   had   to   prove   that   agreement   is   legally   enforceable.   The 


Rajender Ahuja Vs M/s Aimil                                               Page No.12of18
        Gazette notification and the admission of the plaintiff prove that the 

       agreement between the parties was not legally enforceable. Hence, 

       the   plaintiff   failed   to   discharge   the   burden   to   prove   that   the 

       agreement   was   valid   and   the   transactions   carried   out   in   relation 

       thereto   were   enforceable.   Thus,   it   has   been   established   that   the 

       agreement between the parties was void.23.        However,section 65of the Indian Contract Act, deals with 

       obligation of a person who has received the advantage under void 

       agreement or contract that becomes void. It deals with a situation 

       when   an  agreement  is  discovered to be void or when it  becomes 

       void. A void agreement is void ab initio, butsection 65of the Act 

       provides a remedy for unjust enrichment. It provides for restoration 

       of benefit or payment of compensation for advantage derived under 

       a void agreement. A separate right is conferred undersection 65of 

       the Contract Act which comes into operation after the agreement is 

       discovered to be void.24.        In the present case the agreement has been found to be void 

       and admittedly the defendants have received Light Diesel Oil from 

       the plaintiff. There is no evidence that the total amount has been paid 

       for   it.   Thereby   meaning   that   the   defendant   had   taken   undue 


Rajender Ahuja Vs M/s Aimil                                             Page No.13of18
        advantage   under   the   void   agreement   for   which   he   is   liable   to 

       compensate the plaintiff. However, there has to be specific pleading 

       for claim of compensation which is backed by appropriate pleadings. 

       If the pleadings of the plaintiff are considered to be sufficient for 

       granting compensation, then the next question arises as to what is the 

       amount which is actually due to be paid by the defendant.25.        Though the delivery of goods as mentioned in plaint has not 

       been specifically denied by defendant, which tantamount to deemed 

       admission,   still   the   defendant   has   not   admitted   the   existence   of 

       liability of Rs. 1,61,000/­ as alleged by plaintiff. There is specific 

       denial  to  that  effect.  The  defendant  has returned large amount  of 

       money. The case of the plaintiff is that the said sum also includes 

       agreed interest @ 18% p.a. The interest in pursuance of the void 

       agreement cannot be claimed as of right. The case of plaintiff for 

       grant of interest is on the basis of terms and conditions as noted on 

       invoices Ex. PW­1/1 to Ex. PW­1/14. Since, the agreement itself is 

       void, therefore, the terms thereof cannot be enforced.26.        Even if the terms would have been enforceable, still as persection 74of the Contract Act it has to be seen whether it is in the 

       form of penalty.Section 74of The Indian Contract Act deals with 


Rajender Ahuja Vs M/s Aimil                                             Page No.14of18
       cases for compensation for breach of contract where the penalty is 

      stipulated for. It is reiterated below:"  When   a   contract   has   been   broken,   if   sum   is   named   in   the 

      contract as the amount to be paid in case of such breach, or of 

      the contract contains any other stipulation by way of penalty, the 

      party   complaining   of   the   breach   is   entitled,   whether   or   not 

      actual damage or loss is proved to have been caused thereby, to 

      receive   from   the   party   has   broken   the   contract   reasonable 

      compensation not exceeding the amount so named or, as the case 

      may be, the penalty stipulated for."The explanation of this section provides that,  " A stipulation for 

      increase interest from the date of default may be a stipulation by 

      way of penalty".Penalty or liquidated damages cannot be taken as such on merely 

      being so described. A penalty is a sum of money so stipulated in 

      terrorem,   and   liquidated   damages   are   a   genuine   pre   estimate   of 

      damages. They are to be adjudged on the facts of each case.     The 

      question whether a particular stipulation in a contract is in the nature 

      of penalty has to be determined by the Court against the back ground 



Rajender Ahuja Vs M/s Aimil                                          Page No.15of18
        of various factors, such as character of transaction and its special 

       nature,   if   any,   the   relative   situation   of   the   parties   the   rights   and 

       obligations accruing from such transaction under the general law , 

       and the intention of the parties in incorporating in the contract the 

       stipulation which is disputed as penal. If then the Court finds the real 

       purpose for which the stipulation was incorporated in the contract 

       was to be burdensome or oppressive, it may operate in terrorem over 

       the   promisor   so   as   to   drive   him   to   fulfill   th   contract,   then   the 

       provision has to be the one by way of penalty.27.         Thus, the aforesaid stipulation of payment of interest @ 18% 

       p.a would amount to be a penalty. Hence, in such eventuality as well 

       the court would be required to see as to what is the genuine interest 

       available to the plaintiff. However, this can be seen only from the 

       statement   of   account   by   taking   into   consideration   the   interest 

       imposed by the plaintiff on the defendant.28.         In such a situation, the statement of account becomes a very 

       vital and necessary document. The plaintiff has placed on record the 

       statement of account Ex. PW­1/26, but said statement of account has 

       not   been   supported   by  any certificate as required  u/s 65B of the 

       Indian Evidence Act. The non filing of the certificate to that extent 


Rajender Ahuja Vs M/s Aimil                                                   Page No.16of18
        makes   the   statement   of   account   inadmissible.   The   Hon'ble   Delhi 

       High   Court   inMotor   &   General   Finance   Ltd.   vs.   Milap   Bus 

       Service (Regd.) 94 (2001) DLT 171,  held that, "The marking of 

       document as an exhibit is only for the purposes of the identification 

       of   a   document.  Mere   exhibiting   of   a   document   does   not 

       tantamount to its proof.Reliance made by the respondents on the 

       decision of this Court in the case ofSudhir Engineering Company 

       Vs. Nitco Roadways Ltd., is misconceived. The judgment does not 

       help them. The ratio of the decision is that an endorsement of exhibit 

       number of a document does not per se prove the document, to enable 

       the same to be admissible in evidence. The crux of the decision is 

       that mere exhibiting of a document does not lead to the conclusion 

       that the document is proved and is admissible in evidence. In other 

       words, an unproved document cannot be taken as proved by mere 

       exhibiting the same.This finding was returned while referring to a 

       number of decisions  of  Lahore High Court and a Supreme Court 

       decision   reported   asSait   Taraji   Khumachand   Vs.   Yelamariti 

       Satyam."29.        Thus, the aforesaid statement of account cannot be relied or 

       read in evidence. Therefore, it cannot be said how much amount had 


Rajender Ahuja Vs M/s Aimil                                          Page No.17of18
        to be actually paid by the defendant as it has not been proved that 

       how the plaintiff had calculated sum of Rs. 1,61,500/­. Therefore, 

       the plaintiff has also failed to prove the actual amount required to be 

       paid for the goods received30.          In view of the aforesaid discussions, from all the perspectives, 

       the plaintiff has failed to prove this issue. It is decided in favour of 

       the defendant and against the plaintiff.Issue no.331.          Onus to prove this issue was on plaintiff. Since issue no.2 has 

       been   decided   against   the   plaintiff,   therefore,   plaintiff   cannot   be 

       granted any interest. Accordingly, this issue is decided in favour of 

       the defendant and against the plaintiff.Relief32.          In view of the findings given above, the suit of the plaintiff is 

       dismissed with costs. Decree sheet be prepared accordingly. File be 

       consigned to record room after due compliance.Announced in the open court                (SUSHANT CHANGOTRA)

          On 24.07.2013                              CIVIL JUDGE­06 (WEST)




Rajender Ahuja Vs M/s Aimil                                             Page No.18of18