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 counter-claim amount of Rs. 7,62,930/-. The Court found that NAPL had relied on e-way bills and GSTR-1 B2B Invoices, and crucially, Rule 138(11) and (12) of the CGST Rules, 2017, which stipulate that if a recipient does not communicate acceptance or rejection of e-way bill details within 72 hours, it shall be deemed accepted. The Court noted that Molmek had not objected to the generation of e-way bills, demonstrating acceptance of the goods. The Appellant failed to provide credible evidence to disprove NAPL's claim or to demonstrate compliance with the rejection procedures under the CGST Rules. The Court also found that Molmek's reliance on Section 34 of the Evidence Act was unpersuasive as NAPL's claim was not solely based on book entries but also on other documentary evidence and witness testimonies. Consequently, the Appellant's suit for recovery was dismissed, and the Respondent's counter-claim was allowed. The Court found no reason to interfere with the findings of the learned Commercial Court.

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 centered on five specific invoices raised by NAPL, which Molmek alleged 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 this judgment.

Key Issues

1. Whether the Appellant (Molmek) 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 framed by the Commercial Court)? 3. Whether the Respondent (NAPL) is entitled to a decree for Rs. 7,62,930/- as prayed in its counter-claim (Issue No. 3 framed by the Commercial Court)? 4. Whether the Respondent is entitled to any interest, and if so, on what amount and at what rate (Issue No. 4 framed by the Commercial Court)? Appellant's Arguments: The Appellant contended that the five disputed invoices raised by NAPL were forged and that NAPL had failed to prove the supply and delivery of goods against these invoices. The Appellant relied on Section 34 of the Indian Evidence Act, 1872, arguing that entries in books of accounts alone are insufficient to charge a person with liability. Respondent's Arguments: The Respondent argued that the five disputed invoices were genuine and that goods were supplied against them. NAPL relied on invoices, ledger entries, e-way bills, GSTR-1 B2B Invoices, and WhatsApp chats. NAPL contended that under Rule 138(11) and (12) of the CGST Rules, 2017, Molmek's failure to communicate rejection of e-way bills within 72 hours constituted deemed acceptance of the goods.