Sanjana Agarwal vs. Namoshivai Apparels Private Limited

Held

The Court held that the Respondent (NAPL) had successfully proven the dispatch and delivery of goods against the five disputed invoices and the corresponding GSTR-1 B2B Invoices. The Court found that NAPL had provided sufficient evidence, including e-way bills and GST returns, and examined witnesses to support its counter-claim. The Court relied on Rule 138(11) and (12) of the CGST Rules, 2017, which stipulate that if a recipient does not communicate acceptance or rejection of goods within 72 hours of e-way bill details being made available, it shall be deemed that they have accepted the goods. The Court found that Molmek had not objected to the generation of e-way bills, demonstrating their acceptance of the goods. Consequently, the onus shifted to Molmek to disprove NAPL's claim, which it failed to do. The Court also noted that Molmek's reliance on Section 34 of the Evidence Act was unpersuasive as NAPL's claim was not based solely on book entries but also on other documentary and testimonial evidence. The Court found no reason to interfere with the Commercial Court's findings and dismissed the appeals.

Facts

The Appellant, Sanjana Agarwal (proprietor of Molmek Enterprises), filed a suit for recovery of Rs. 74,91,565.70 against the Respondent, Namoshivai Apparels Private Limited (NAPL), alleging default in payments for supplies made between August 2018 and February 2019. NAPL disputed the claim and filed a counter-claim for Rs. 7,62,930/- for goods supplied by NAPL to Molmek. The dispute primarily revolved around five invoices raised by NAPL, which Molmek claimed were forged. The Commercial Court dismissed Molmek's suit and allowed NAPL's counter-claim. The Appellant filed two appeals before the High Court challenging the Commercial Court's judgment.

Key Issues

1. Whether the Appellant (Plaintiff) is entitled to a decree for Rs. 74,91,565.70 (Issue No. 1 framed by the Commercial Court)? 2. Whether the Appellant is entitled to any interest, and if so, on what amount and at what rate (Issue No. 2)? 3. Whether the Respondent (Defendant) is entitled to a decree for Rs. 7,62,930/- as prayed in the counter-claim (Issue No. 3)? 4. Whether the Respondent is entitled to any interest, and if so, on what amount and at what rate (Issue No. 4)? Contentions of the Appellant: The Appellant argued that the five disputed invoices were forged and that NAPL had failed to prove the supply of goods against these invoices. They relied on Section 34 of the Indian Evidence Act, 1872, to argue that book entries alone are insufficient to charge a person with liability. Contentions of the Respondent: NAPL contended that the disputed invoices were genuine and that goods were supplied against them. They relied on invoices, ledger entries, e-way bills, GSTR-1 B2B Invoices, and WhatsApp chats. NAPL also invoked Rule 138 of the CGST Rules, 2017, arguing that Molmek's failure to communicate rejection of e-way bills within 72 hours constituted deemed acceptance of the goods.