Two questions decide most supplier recovery suits: where can the supplier sue, and what does the buyer's quality defence actually rest on? On 17 September 2026, a Division Bench of the High Court of Delhi comprising Justice Anil Kshetarpal and Justice Shail Jain answered both in Mark Splendour Nonwovens (P) Ltd v. Rakesh Gupta, RFA(COMM) 240/2024, dismissing a Rajasthan-based buyer's appeal under Section 13 of the Commercial Courts Act against a decree of ₹36,35,584 with interest in favour of a Delhi supplier of coating powder.
The commercial relationship
From 2015, the Delhi-based respondent supplied coating powder on credit to the appellant, a Rajasthan manufacturer. Part payments were made; a balance of ₹36,35,584 remained unpaid for supplies up to October 2018. Pre-institution mediation having failed, the supplier sued in January 2020. The buyer's defence ran on two rails: the Delhi court lacked territorial jurisdiction, and the goods — worth some ₹34.15 lakh — had been rejected for want of test reports and conformity with specifications.
Jurisdiction: the debtor seeks the creditor
The Bench held Delhi competent. In the absence of an agreement fixing another place of payment, the payment obligation was performable where the creditor was — Delhi — making part of the cause of action arise there under Section 20(c) of the CPC. The invoices, moreover, carried Delhi jurisdiction clauses. For suppliers, the combination is worth noting: the common-law rule supplies the principle, and consistent invoice clauses supply the paper. For buyers, the converse lesson is that a jurisdiction objection must be built on an actual agreement about the place of payment, not on the inconvenience of the forum.
The rejection defence, dissected
With the defence stripped away, the decree followed: the principal of ₹36.35 lakh, 18% interest pre-suit, and 12% pendente lite and future, with the balance payable within four weeks.
Why quality defences fail so often
Commercial courts see the rejection defence in a large share of supplier suits, and it fails in a recognisable pattern: the quality objection surfaces for the first time in the written statement, years after silent retention of the goods and part payments on account. The Sale of Goods Act gives buyers real rights — examination before acceptance, rejection of non-conforming goods, damages for breach of warranty — but each right has a temporal discipline. A buyer who intends to reject must say so when the goods arrive, in writing, and must not deal with them as owner thereafter. Once the goods are consumed, resold or simply kept without protest, the law treats the sale as accepted and remits the buyer to a warranty claim he must prove affirmatively.
Checklist for credit suppliers
Print jurisdiction and interest clauses on every invoice, and keep proof of the buyer's receipt and non-objection.
Reconcile the account periodically and obtain balance confirmations — part payments and confirmations defeat later denials.
Complete pre-institution mediation under Section 12A before suing, unless urgent interim relief is genuinely needed.
Sue within limitation, computing it from each invoice or the acknowledged balance, whichever the record supports.
This article is for general information only and is not legal advice or a solicitation.
Frequently Asked Questions
Can a Delhi supplier sue in Delhi when the buyer is in another State?
Often, yes. Where no contrary agreement exists, the common-law principle that the debtor must seek the creditor makes the payment obligation performable at the creditor's place, giving courts there jurisdiction under Section 20(c) CPC as part of the cause of action. An invoice clause conferring jurisdiction on Delhi courts, as here, reinforces the position.
Are jurisdiction clauses printed on invoices binding?
They are a relevant and often weighty indicator of the parties' understanding, particularly in a running commercial relationship where invoices were accepted and acted upon without protest. Combined with part payments and the place of payment, they routinely sustain jurisdiction.
What must a buyer prove to sustain a rejection-of-goods defence?
That the contract required the specifications or test reports allegedly breached; that rejection was communicated contemporaneously; and that the rejected goods were returned or held at the seller's disposal. A defence assembled for the written statement, without letters, debit notes or returns at the time, fails — as it did here under Section 42 of the Sale of Goods Act, acceptance being inferred from retention.
What interest do commercial courts award on unpaid supplies?
The decree here carried 18% pre-suit and 12% pendente lite and future interest, reflecting contractual stipulations on invoices and commercial rates. Interest is compensatory; buyers who dispute it must contest the underlying stipulation, not merely its size.