Bhagwan Singh v. Anmol Bhasin

9. The learned Trial Court in the light of evidence that had come on record, returned a finding that the Respondent has failed to prove that - the Appellant supplied the defective goods; the goods were of inferior quality; the goods supplied by the Appellant were not as per the specification; or that the delivery of goods was delayed. The findings in this behalf from the impugned judgment read thus:

10. Insofar as the claim of the Appellant is concerned, the learned Trial Court noted that though the Appellant/Plaintiff while examining himself as PW-1 has proved only four invoices as Ex.PW-1/A (Colly), but since in the written statement the Respondent has admitted that the Appellant issued six invoices, it accordingly, held that Appellant supplied the goods to the Respondent and raised six invoices aggregating Rs.11,56,721/-, and the same were duly received by the Respondent.

11. The learned Trial Court on the basis of the Appellant’s admission in his cross-examination that the suit has been filed to recover the amount due against total 06 invoices, and further admission of payments in the ledger account, observed that against all the six invoices, which were the subject matter of the suit, the Respondent made the payment either equivalent to the amount of the invoice or in excess of the invoice value, and accordingly held that the ledger account, Ex.PW-1/C (colly), is not a regular statement of account. The learned Trial Court further held that the payment made to the Appellant by the Respondent during the period 23.04.2022 to 16.06.2023 is more than the aggregate value of six subject invoices. The suit of the Plaintiff was thus, dismissed. The relevant findings of the learned Trial Court in this regard are as under:

12. The learned counsel appearing on behalf of the Appellant has not challenged the finding of the learned Trial Court as regard the payments made by the Respondent against the six subject invoices. He has confined his submission only to the finding of the learned Trial Court as regard the ledger account, Ex.PW-1/C (colly). Inviting attention of the Court to the said ledger account, he contends that the learned Trial Court erred in holding that the ledger account is not a regular statement of account. Referring to the opening balance of the ledger account for the financial year 2022-2023, he contends that there was already an opening outstanding amount of Rs.8,83,327/- as on 01.04.2022, therefore any payment made by the Respondent subsequent thereto is to be first adjusted against the said opening outstanding balance besides the amount of six invoices in question which were issued after 01.04.2022. It is his case that this opening balance has been completely ignored by the Trial Court.

13. During the course of hearing, a specific query was posed to the learned counsel for the Appellant as to whether any invoice, other than six subject invoices, or any other material, has been placed and proved on record for establishing the entries recorded in the ledger account, Ex.PW- 1/C (colly), his answer is clearly in the negative.

14. He, however, contends that an application under Order XLI Rule 27 CPC has been separately filed along with the present appeal to place on record additional evidence viz.,

(i) invoices issued by the Appellant for the goods from the financial year 2020-2021 till 2023-2024 along with their e-way bills and acknowledgement receipt of the transporter (Annexure A-2);

(ii) forms GSTR-1 for all the invoices issued by the Appellant from the financial year 2020-2021 till 2023-2024 (Annexure A-3);

(iii) form GSTR-3B to claim input tax credit for inter alia the invoice issued by the Appellant to the Respondent from the financial year 20202-2021 to 2023-2024 (Annexure A-4); and

(iv) bank account statement for the calendar year 2021 to 2024 of the bank account of the Appellant maintained with the Indian Bank at Janak Puri (Annexure A-5).

15. It is urged by the learned counsel for the Appellant that the above documents would establish beyond any shadow of doubt that the entries made in the ledger statement filed by the Appellant are true and correct and the same are sought to be proved only to substantiate the entries of the ledger account.

16. The Respondent was proceeded against ex-parte in the present appeal vide order dated 04.02.2026 as there was no appearance on behalf of the Respondent despite repeated issuance of notices through speed post as also on his mobile number.

17. Having heard the learned counsel for the Appellant, the Court notes that in the plaint, the Plaintiff has predicated its claim only on six invoices as detailed in para 3 hereinabove. The supply of material and raising of said six invoices by the Appellant is not in dispute. The finding of payment made by the Respondent against such invoices has also not been assailed. The submission of the Appellant is that the payment made by the Respondent against the six invoices ought to be adjusted against the opening balance in the ledger account for the financial year 2022-2023 and that the observation of the learned Trial Court to the effect that the ledgers account is not a regular statement of account. This Court does not find merit in the said submission, inasmuch as the entries of sale in the ledger account, other than six transactions which are subject matter of the suit, are not supported by any invoice or other corroborative evidence establishing transaction of sale.

18. The law is well settled that no liability can be fastened on a person merely on the basis of entries in books of account, even where such books of account are kept in the regular course of business, without their being further evidence to prove such entries. Reference in this regard may be had to the decision of the Supreme Court in Chandra Dhar Goswami v. Gauhati Bank Limited, 1966 SCC OnLine SC 255, wherein it was observed as under: “The main question urged before us is that there is no evidence besides the certified copy of the account to prove that a sum of Rs. 10,000 was advanced to the appellants and therefore in view of section 34 of the Evidence Act the appellants cannot be saddled with liability for that amount. Section 34 is in these terms: “Entries in books of account, regularly kept in the course of business, are relevant whenever they refer to a matter into which the court has to inquire, but such statements shall not alone be sufficient evidence to charge any person with liability.” It is clear from a bare perusal of the section that no person can be charged with liability merely on the basis of entries in books of account, even where such books of account are kept in the regular course of business. There has to be further evidence to prove payment of the money which may appear in the books of account in order that a person may be charged with liability thereunder, except where the person to be charged accepts the correctness of the books of account and does not challenge them. In the present case, however, the appellants did not accept the correctness of the books of account. ….”

19. Likewise, the Coordinate Bench of this Court in Harish Mansukhani v. Ashok Jain, 2008 SCC OnLine Del 1242, while confronted with similar question, observed as under:

20. Insofar as the submission of the learned counsel for the Appellant for bringing on record additional evidence, is concerned, this Court cannot be unmindful of the fact that it is a commercial suit under the Commercial Courts Act, 2015 [hereinafter referred to as ‘the Act’] which provides for a stricter regime of filing of all documents at the time of filing of suit when such documents are in power, possession, control or custody of the Plaintiff, failing which the Plaintiff cannot be allowed to rely on those documents, save and except by leave of Court. The Court, however, has the discretion to grant such leave only upon Plaintiff establishing reasonable cause for non-disclosure of documents along with the plaint. The relevant part of the Order XI which was substituted by virtue of Section 16 of the Act and made applicable to the commercial disputes, insofar it relates to filing of additional documents, reads as under: “ ORDER XI DISCLOSURE, DISCOVERY AND INSPECTION OF DOCUMENTS IN SUITS BEFORE THE COMMERCIAL DIVISION OF A HIGH COURT OR A COMMERCIAL COURT

1. Disclosure and discovery of documents. …… (5) The plaintiff shall not be allowed to rely on documents, which were in the plaintiff’s power, possession, control or custody and not disclosed along with plaint or within the extended period set out above, save and except by leave of Court and such leave shall be granted only upon the plaintiff establishing reasonable cause for non–disclosure along with the plaint.”

21. A perusal of the above quoted provision shows that the Appellant has to establish “reasonable cause” for non-disclosure of documents which were in Appellants power, possession, control or custody and were still non disclosed along with the plaint. However, there would be no requirement of establishment of reasonable cause qua the documents that have been found subsequently.

22. It is not the case of the Appellant that the documents sought to be produced as additional evidence were not within his possession, control or custody, rather the only reason that has been put forth in the application for not producing the said evidence before the learned Trial Court is that the Appellant was advised by his counsel that there was no necessity to file the same and the Appellant being an illiterate person solely relied upon the legal advice that was rendered. If such a contingency is read into the expression “reasonable cause”, the very purpose of the requirement of disclosure of documents at the time of filing of plaint as envisaged in Order XI Rule 1(5) would become meaningless.

23. Incidentally, the documents sought to be filed as additional evidence at this appellate stage were not only not filed along with the plaint, but no application was moved by the Appellant to bring the same on record in the suit, anytime, before or after the commencement of trial. The Appellant also had an opportunity even at the stage of evidence to confront the Respondent’s witness with such documents during his cross examination, but such a course was also not adopted.

24. In the aforesaid circumstances, the justification given by the Appellant for not filing the additional evidence/document before the learned Trial Court, in the considered opinion of this Court, does not pass the muster of "reasonable cause" as contemplated under order XI Rule 1(5).

25. The present application has since been filed by the Appellant under Order XLI Rule 27 CPC, it would be apposite to advert to the said provision as well, which reads thus:

26. A perusal of the above provision shows that the parties are not entitled as right to the admission of additional evidence in the appellate, save and except, in the circumstances expressly enumerated in Order XLI Rule 27 CPC.

27. In Union of India v. Ibrahim Uddin and Anr. (2012) 8 SCC 148, the Supreme Court while analyzing the scope and object of Order XLI Rule 27 CPC observed that the Appellate Court may permit additional evidence only in the event conditions laid down in the Rule are found to exist. The parties are not entitled, as of right, to admission of such evidence. The matter is clearly within the discretion of the Court and is to be utilized sparingly. The party who had ample opportunity to produce certain evidence in the lower court but failed to do so or elected not to do so, cannot have it admitted in appeal. The relevant extract from the decision is reproduced hereinbelow:

41. The words “for any other substantial cause” must be read with the word “requires” in the beginning of the sentence, so that it is only where, for any other substantial cause, the appellate court requires additional evidence, that this Rule will apply e.g. when evidence has been taken by the lower court so imperfectly that the appellate court cannot pass a satisfactory judgment.” (emphasis supplied)

28. The present is not a case where the Trial Court refused to admit any evidence which ought to have been admitted nor it is the case of the Appellant that the additional evidence sought to be produced was not within the knowledge of the Appellant or could not have been produced before the Trial Court. The reasons articulated by the Appellant that he was not properly advised by his counsel for filing of the documents/evidence, now sought to be produced, does not constitute a “substantial cause” as held by the Apex Court in Ibrahim Uddin (supra).

29. Further, a reading of the plaint shows that the claim of the Appellant/Plaintiff in the suit is for supply of goods against only six invoices specifically pleaded in the plaint. However, the Appellant now wish to rely on various other invoices and contemporaneous documents related to such invoices to prove the entries in the ledger account, Ex.PW1/C (colly.). Such an attempt, at the appellate stage and in the absence of foundational pleadings, is not permissible in law, all the more when such documents were in the possession of the Appellant even when the suit was filed.

30. For the aforesaid reasons, there is no merit in the application of the Appellant under Order XLI Rule 27 CPC and, accordingly, CM No.42158/2025 is dismissed. There is also no infirmity in the impugned judgment of the Trial Court warranting any interference by this Court. Consequently, the appeal is also dismissed.

31. The pending applications, if any, shall also stand disposed of.

VIKAS MAHAJAN JUDGE PRATHIBA M. SINGH JUDGE JULY 13, 2026