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IN THE HIGH COURT OF DELHI AT NEW DELHI
Manmeet Pritam Singh Arora, J
CRITICALOG INDIA PRIVATE LTD – Appellant
Versus
DELTA FREIGHT SYSTEM & ANR. – Respondent
CS(COMM) 624/2023 & CCP(O) 110/2024
Based on the provided legal document, the key points are as follows:
Maintainability of the Suit: The Court held that summary suits based on invoices are maintainable when liability is acknowledged by the defendant, and defenses presented are genuine and substantial (!) (!) (!) .
Facts of the Case: The Plaintiff provided logistics services to the Defendants, raising invoices totaling approximately ₹3.33 crores. The Defendants paid a partial amount but defaulted on the remaining dues, which led to the filing of the suit for recovery (!) (!) (!) (!) (!) .
Acknowledgment of Liability: The Defendants acknowledged their liability through various communications, including emails and legal notices, explicitly admitting the debt and promising to make payments. This acknowledgment was deemed sufficient to establish liability (!) (!) (!) (!) (!) (!) .
Defense and Unsubstantiated Adjustments: The Defendants claimed various unilateral adjustments for GST, rate differences, prospective losses, and payments to third parties. However, these claims were unsupported by contemporaneous documents, contracts, or authority, and were contradicted by the Defendants’ own ledger and correspondence (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) .
Legal Position on Invoice-based Suits: The Court reaffirmed that suits based on invoices are valid under Order XXXVII CPC, provided the invoices clearly state the details of services, price, and purchaser, and are acted upon and accepted by the defendant (!) (!) .
Failure to Dispute Liability: The Defendants did not dispute the receipt or acceptance of the invoices or the liability, and their objections regarding the validity of invoices or alleged adjustments were found to be afterthoughts and unsupported by evidence (!) (!) .
Admitted Liability and Non-compliance: The Court noted the Defendants' admission of liability to the extent of ₹50,23,902, which they failed to pay despite Court orders and directions. The Defendants’ failure to appear or comply led to proceedings being conducted ex parte (!) (!) (!) (!) .
Legal Consequences: Given the absence of substantial or bona fide defenses, the Court dismissed the Defendants’ application for leave to defend, and the suit was decreed in favor of the Plaintiff for the principal amount of ₹1,96,97,325, along with pre-suit interest totaling ₹38,29,859, culminating in a total decretal amount of ₹2,35,27,184 (!) (!) (!) .
Interest and Costs: The Court awarded interest at 12% per annum on the total amount from the date of the judgment, with a provision for higher interest if the Defendants failed to pay within two months. Costs were awarded to the Plaintiff, and the Plaintiff was directed to file a bill of costs within six weeks (!) (!) .
Final Orders: The suit was decreed in accordance with the terms above, the order regarding the earlier admitted liability was merged into this decree, and the Court directed the Plaintiff to serve a copy of the judgment to the Defendants via email for compliance (!) (!) (!) (!) .
These points collectively summarize the Court’s reasoning, findings, and final judgment in the case.
| Table of Content |
|---|
| 1. plaintiff filed suit for outstanding payments. (Para 1 , 2 , 4) |
| 2. defendants' acknowledgment of debt and liability. (Para 5 , 11 , 12 , 18) |
| 3. court found insufficient grounds for defendants' objections. (Para 24 , 26 , 28) |
| 4. court decreed total amount owed with interest. (Para 30 , 31 , 32 , 33) |
CS(COMM) 624/2023
I.A. No. 5020/2024
1. The Plaintiff has filed the present suit under Order XXXVII Rules 1 and 2 of the Code of Civil Procedure, 1908 [‘CPC’] seeking recovery of principal amount of ?1,96,97,325/- along with interest amount of ?38,29,859/- calculated at the rate of 2% per month as on 21.08.20231, from both Defendant No. 1, a sole proprietorship firm engaged in consignment shipping and operating through the networks of logistics companies like the Plaintiff, as well as Defendant No. 2, being the proprietor of Defendant No. 1 who is responsible for its day-to-day operations, communications, and liabilities. The Plaintiff also claims interest at 2% per month for pendente lite and future interest, until realization.
Factual Matrix
2. Facts stated in the plaint are as follows: -
2.1 In July 2022, the Defendants approached the Plaintiff, to utilize its logistics network for transporting sensitive consignments, which the Plaintiff accepted with the intent of a long-term business association. Commercial transactions began in the last week of July 2022, and although formal agreements dated 31.07.2022 and 01.09.2022 were sent by the Plaintiff, the Defendants delayed signing them. Nonetheless, the Plaintiff continued to provide services based on agreed terms communicated through WhatsApp, calls, and emails with its Delhi office.
2.2 Between July and October 2022, the Plaintiff transported around 130 MT of goods to Milan, Vancouver, and Toronto after price approvals from the Defendants and raised invoices for a total sum of ?3,33,97,325/-. Several invoices were raised on the Defendants for the services provided and were duly acknowledged by them.
2.3 The Defendants without any demur, made part-payment of ?1,35,50,500/- towards these invoices for services rendered between July and October 2022, but subsequently defaulted, leading to an outstanding balance of ?1.98 crores approximately. Despite repeated reminders, Defendant No. 2 kept delaying payments on various pretexts, leading the Plaintiff to halt services in October 2022.
2.4 Through emails dated 11.10.2022 and 17.10.2022, Defendant No. 2 expressly acknowledged the outstanding dues and promised to make payments, yet failed to do so, apart from a small sum of ?1,11,664/- against an invoice dated 20.09.2022.
2.5 Subsequently, the Defendants stopped responding to the Plaintiff’s communications and, surprisingly, issued a legal notice on 19.11.2022 containing false allegations while still admitting its liability. The Plaintiff replied to the said notice on 06.03.2023, refuting the allegations and demanding ?2,32,68,150/- (including interest).
As on 21.08.2023, the Defendants remain liable for ?2,35,27,183/-; comprising of ?1,96,97,325/- as principal amount and ?38,29,859/- as interest calculated at the rate of 2% per month.
2.6 The cause of action arose on 20.10.2022 when the Defendants first defaulted and continues till date.
Leave to defend filed by the Defendants
3. The Defendants, on 25.01.2024, filed an application, I.A. 5020/2024, under Order XXXVII Rule 3 and 5 CPC for grant of ‘leave to defend’.
4. The Defendants stated in their application that they were served with the summons on 16.01.2024 and filed the present application on 25.01.2024 as the suit involves several triable issues requiring adjudication.
4.1 It is stated that the present suit is not maintainable since there exists no written agreement or admitted liability amounting to a liquidated demand. It is stated that the claim is based merely on accounts and invoices, which require evidence and proof under Section 34 of The Indian Evidence Act, 1872, and thus cannot fall within t
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