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Mark Splendour Nonwovens (P) Ltd. vs. Rakesh Gupta

Regular First Appeal (Commercial) · 2026:DHC:7950-DBDecided 17 Sept 2026New Delhi Bench
RFA(COMM) 240/2024CNR: DLHC010374502024
Justice Anil Kshetarpal · Justice Shail Jain

Background

A Delhi-based supplier sued a Rajasthan-based cement products company for over Rs. 36 lakh in unpaid dues for goods supplied on credit. The trial court in Delhi decreed the suit in the supplier's favour. The buyer appealed, arguing that Delhi courts had no jurisdiction since the deal was struck and goods received at its factory in Rajasthan, and separately claiming that goods worth over Rs. 34 lakh had been rejected for lacking required test reports and not matching specifications.

Decision Breakdown

The Court held that Delhi courts did have jurisdiction because, in the absence of any agreed place of payment, the buyer's payment obligation was legally owed at the seller's (creditor's) place of business in Delhi: one of several valid connecting factors alongside the invoices' Delhi jurisdiction clause and the fact that goods were dispatched from Delhi. On the rejection defense, the Court found the buyer's own witness admitted no purchase order specifying the test-report requirement was ever produced, no written rejection notice was ever sent to the supplier, and the allegedly rejected goods were never returned, meaning the buyer failed to prove its defense, and under the Sale of Goods Act, retaining goods without timely rejection amounts to acceptance. The appeal was dismissed and the decree upheld.

Lesson Learnt

A buyer who keeps disputed goods without formally rejecting them in writing within a reasonable time, and without ever returning them, will be treated as having accepted them: silence and retention can be as legally binding as a signed acceptance.

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