Full Text
HIGH COURT OF DELHI
Date of Decision: 1st April, 2026
49416/2025, CM APPL. 62547/2025 R.K ELECTRICAL INDUSTRIES INDIA PVT. LTD. AND ORS.....Appellants
Through: Mr. Rajat Aneja, Mr. Karan Deep Singh and Mr. Rishabh Mishra, Advs.
Through: Mr. Vijay Kumar Gupta and Mr. Mehul Gupta, Advs.
JUDGMENT
1. This hearing has been done through hybrid mode.
2. The present appeal under Section 96 of the Civil Procedure Code, 1908 arises out of the impugned judgment and decree dated 6th March, 2025 passed by the ld. District Judge (Commercial), Tis Hizari, Delhi by which the suit of the Respondent/Plaintiff, being CS(Comm.) No. 76/2023, has been decreed under Order 12 Rule 6 CPC, against the Appellant/Defendant in the following terms:
3. The case of the Appellant is that there were two connected suits that were filed before the same Court, details whereof are as under:
(i) CS (Comm.) No. 76/2023 titled M/s. Rishabh Industries v. M/s
R. K. Electrical Industries (India) Pvt. Ltd. & Anr.
(ii) CS (Comm.) No. 433/2023 titled M/s RK Electrical Industries
4. According to the Appellant, these two suits relate to supplies of “Kalinga” branded cables and other products by and on behalf of the Appellant to one M/s. Bhavya Electricals, which is stated to be the distributor of the Appellant. The said products were manufactured by the Respondent. It is also stated that M/s. Bhavya Electricals had been introduced to the Appellant by the Respondent, and that M/s. Bhavya Electricals owed a substantial amount of money, approximately Rs. 60 lakh, to the Appellant/Defendant.
5. Accordingly, Mr. Rajesh Jain, partner in the Respondent - M/s. Rishab Enterprises, and Ms. Anshoo Kohli, authorized representative of the Appellant, had entered into a Memorandum of Understanding dated 30th August, 2020, whereby the parties agreed to certain terms in respect of their business dealings and recovery of the amounts payable by M/s. Bhavya Electricals to the Appellant.
6. It is stated that despite the above Memorandum of Understanding the Respondent filed the subject suit i.e., CS (Comm.) No. 76/2023, seeking, inter alia, recovery of Rs, 1,08,30,382, including the pre-suit interest @ 18% per annum on the principal amount of Rs, 60,02,225/- till 29th September, 2022.
7. Thereafter, the Appellant also filed CS (Comm.) No. 433/2023 against M/s. Bhavya Electricals as also the Respondent herein, seeking recovery of its dues towards the goods supplied by the Appellant to M/s. Bhavya Electricals. It is stated that both the suits are dependent on the Memorandum of Understanding entered into between the parties herein, since the dues payable by the Appellant were to be set off against the dues of M/s. Bhavya Electricals due to the Appellant.
8. However, while the suit filed by the Appellant continues to remain pending before the same Court, the subject suit has been decreed further to an application under Order XII Rule 6, CPC filed by the Respondent.
9. It is the further submission of the ld. Counsel for the Appellant that the case was not one where there was any admission by the Appellant for decreeing the subject suit under Order XII Rule 6, CPC. It is submitted that both suits ought to have been adjudicated together.
10. On the first date when the appeal was listed, vide order dated 24th July, 2025, the Court had directed as under:
11. As can be seen from the above, the Appellant was directed to deposit a sum of Rs. 40 lakhs with the worthy Registrar General, which has now been deposited and the same is lying in an interest-bearing account.
12. Thereafter, the matter was also referred to mediation, however, the mediation did not result in resolution of the dispute between the parties. In the meantime, the Court had called for the TCR of both the subject suits.
13. An application was also moved by the Respondent seeking release of an amount of Rs. 40 lakhs.
14. The Court had heard some submissions on 9th December, 2025 and after considering the allegation of the Appellant that there is a back to back arrangement between the Appellant, Respondent and M/s Bhavya Electricals, the Court had directed Mr. Rajesh Jain, authorised representative of the Respondent to be present.
15. In addition, it was directed that the Appellant would produce the original Memorandum of Understanding dated 30th August, 2020 relied upon by the Appellant.
16. It is the submission of Mr. Gupta on behalf of the Respondent that the written statement would show that apart from setting up the MoU, there is no denial by the Plaintiff that the goods had in fact been supplied by the Respondent. According to Mr. Gupta explicit admission need not be there so long as the written statement fails to show any plausible defence.
17. Heard. Mr. Rajesh Jain is present today. The original Memorandum of Understanding has been produced. The Court has also pursued the pleadings in respect of the subject suit.
18. The case of the Respondent/Plaintiff in the subject suit is that there was supply of goods to the Appellant/Defendant in respect of which some part payments were also made by the Appellant. It is stated that after consideration of the part payments, a balance of Rs. 1,78,37,624/- was remaining, in respect of which 13 cheques were issued. Thereafter, certain payments were made, however finally there was a balance of Rs. 60 Lakhs that was remaining. The subject suit was accordingly filed seeking a sum of Rs. 1,08,30,382.70/which included the interest component as well.
19. In the written statement, the plea of the Appellant is that there is a back to back arrangement between M/s. Bhavya Industries with whom the Respondent was also connected. In respect thereof, reliance is placed on the Memorandum of Understanding dated 30th August, 2020 that was signed by Mr. Rajesh Jain, where certain adjustments towards the dues of M/s. Bhavya Industries to the Appellant were also agreed upon by Mr. Rajesh Jain. The said MoU has been perused and the pleadings have also been perused.
20. The main emphasis of the Respondent/Plaintiff is on paragraphs 7 and 14 of the plaint in response to which the written statement reads as under: Stand of the Respondent/Plaintiff:
21. In light of the pleadings, the following issues were framed in the suit on 9th October, 2023: “1. Whether the plaintiff is entitled to recovery of Rs.1,08,30,382.70 along with interest from the defendant as alleged? OPP
2. Whether the suit is not maintainable? OPD
3. Whether suit is bad for mis-joinder of necessary parties? OPD
4. Whether the suit has no.1 been filed by proper Authorized Representative as per law? OPD
5. Whether the suit is not maintainable in view of MOU executed between the AR of the parties as alleged? OPD
6. Relief.”
22. Thereafter, at the stage of evidence, the application under Order XII Rule 6 of CPC was moved by the Respondent/Plaintiff which led to the impugned decree being passed.
23. The clear and unequivocal position of law under Order XII Rule 6 of CPC is that there has to be an express or implied admission by the defendant of 4the liability.
24. As can be seen from pleadings extracted above, there is no admission which could have been held against the Appellant/Defendant. In fact, there is not even an implied admission in the written statement. The clear case of the Appellant was that in terms of the MoU responsibility was taken by the Respondent/Plaintiff to clear the dues of M/s. Bhavya Electricals. Hence, the amount was not owed by the Appellant to the Respondent. There is a reference made to the MoU in the impugned decree, however, the ld. District Judge proceeds to hold that the liability of M/s. Bhavya Electricals cannot be imposed upon the Respondent/Plaintiff, and hence, the decree would be liable to be granted.
25. In the opinion of this Court, Mr. Rajesh Jain, who is present today admits his signatures on the MoU. The manner in which the MoU is worded is as per trade customs, where the MoU is written in short sentences and certain adjustments qua M/s. Bhavya Electricals appear to be mentioned in this MoU between Mr. Rajesh Jain and the Appellant.
26. The question as to whether the liability of M/s. Bhayva Electricals towards the Appellant can be imposed upon the Respondent or not would be a question of trial. The sentences in the MoU would have to be properly interpreted and oral evidence would be required. In fact, when the issues were framed and one of the issues related to the MoU itself, the invoking of Order
12 Rule 6 CPC to pass a decree on admissions, was unwarranted – that too when the defence which was set up in the written statement was far from an admission.
27. In the opinion of this Court the grant of decree on admissions, in these facts, is not tenable. Accordingly, the impugned judgement and decree is set aside.
28. It is directed that the subject suit i.e., CS (Comm.) No. 76/2023 and the suit filed by the Appellant against M/s. Bhavya Electricals being suit no. CS (Comm.) No. 433/2023 shall be heard and adjudicated together.
29. The following are the details of both the suits.
(i) CS (Comm.) No. 76/2023 titled Rishabh Industries v. M/s R. K.
(ii) CS (Comm.) No. 433/2023 titled M/s RK Electrical Industries
30. The Court is informed that in the other suit, i.e. CS (Comm.) NO. 433/2023, the matter is at the stage of final arguments.
31. Let the trial in CS (Comm.) No. 76/2023 be concluded within a period of three months before the same Court and the ld. District Judge, Commercial Court shall hear both the suits together and adjudicate them together finally.
32. The amount of Rs. 40 lakhs which is lying deposited with the worthy Once the judgment is pronounced in the two suits, parties would be free to move an appropriate application in this regard for appropriate orders.
33. List before the Trial Court on 16th April, 2026.
34. If the physical TCR had been requisitioned, let the same be returned to the Trial Court.
35. The original MoU is returned to the Appellant.
36. The appeal is disposed of in the above terms. Pending applications, if any, also stand disposed of.
PRATHIBA M. SINGH JUDGE MADHU JAIN JUDGE APRIL 1, 2026/ys/msh