Commercial recovery suits are won and lost on contemporaneous paper. The Delhi High Court’s judgment in Mark Splendour Nonwovens (P) Ltd v. Rakesh Gupta, RFA(COMM) 240/2024, decided on 17 September 2026, affirms a decree of Rs 36,35,584 for coating powder supplied on credit — and in doing so restates two workhorse rules: a buyer who claims rejected goods must show rejection in the record, not in the written statement; and where no place of payment is fixed, the debtor must seek out the creditor, anchoring jurisdiction where the seller is.
The transaction and the default
The supplier and the manufacturer traded for years on a running credit relationship: coating powder despatched against invoices, payments arriving irregularly. When payments stopped in late 2018, the ledger showed Rs 36,35,584 outstanding. The supplier sued before the Commercial Court in Delhi. The buyer’s written statement advanced a rejection narrative — goods worth Rs 34,15,742 allegedly non-conforming and unsupported by test reports — but the trial record contained no purchase order stipulating test reports, no rejection letter, no debit note, and no return of goods. The Commercial Court decreed the claim with interest; the Division Bench of Justices Anil Kshetarpal and Shail Jain dismissed the appeal.
The Sale of Goods Act logic
Section 42 of the Sale of Goods Act, 1930 deems a buyer to have accepted goods when, after delivery, he retains them without intimating rejection within a reasonable time, or does an act inconsistent with the seller’s ownership. Retention plus silence plus consumption is acceptance. Once acceptance is fixed, the buyer’s remedy for alleged defects — if any survived — sounds in a counterclaim for damages with proof; it does not defeat the price claim. The judgment applies this framework without embellishment: the goods stayed with the buyer, the complaints surfaced in litigation, and the price fell due.
Jurisdiction: the debtor seeks the creditor
A documentary checklist for supply relationships
For suppliers: serially numbered invoices referencing POs; signed delivery challans or e-way bill trails; a periodically confirmed ledger or balance confirmation; prompt written responses to any quality complaint.
For buyers: POs recording specifications and testing requirements; inspection within the contractual window; written rejection with reasons and a demand to lift the goods; debit notes raised contemporaneously — not after the statutory notice arrives.
The sixty-day appeal window under Section 13 of the Commercial Courts Act is unforgiving, and appellate courts reviewing commercial decrees defer to trial findings rooted in documents. The time to win a recovery suit is during the trade itself — in the paperwork.
This article is for general information only and is not legal advice or a solicitation.
Frequently Asked Questions
What was the dispute?
A Delhi supplier sold coating powder on credit from 2015 to a Rajasthan manufacturer. After the last payment in October 2018, Rs 36,35,584 remained outstanding. The buyer resisted the commercial suit claiming goods worth about Rs 34 lakh had been rejected for want of test reports and non-conforming specifications. The Commercial Court decreed the suit; the Division Bench affirmed.
Why did the rejection defence fail?
Three documentary gaps: no purchase orders establishing that test reports were a contractual requirement; no contemporaneous communication rejecting the goods; and the decisive fact that the goods were retained and never returned. A rejection that lives only in pleadings, years later, is not a rejection in law.
How did a Delhi court have jurisdiction over a Rajasthan buyer?
Where the contract does not specify a place of payment, the common-law principle that the debtor must seek out the creditor applies: payment is performable where the creditor is. Part of the cause of action therefore arose in Delhi, sustaining jurisdiction under Section 20(c) CPC as applied to commercial courts.
What appeals lie from Commercial Court decrees in Delhi?
Section 13 of the Commercial Courts Act, 2015 provides an appeal to the Commercial Appellate Division of the High Court within sixty days — the RFA(COMM) route taken here. Appellate interference on concurrent factual findings supported by the record is rare.