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Issues: Recovery of debt, Validity of power of attorney, Proof of accounts, Dishonoured cheques, Claim for interest
Recovery of debt: The plaintiff, a company, filed a suit against four defendants for the recovery of a debt amounting to Rs. 1,38,916. The defendants were associated with Sai Autos, a dealership for Ford Tractors. The plaintiff alleged that defendant No. 4 purchased a tractor on credit but failed to pay the amount directly to the plaintiff. Instead, defendants Nos. 1 to 3 collected the payment illegally and kept it. However, during the proceedings, the plaintiff abandoned the claim against defendant No. 4, acknowledging that it would be unjust to make him pay twice for the tractor. Validity of power of attorney: The plaintiff relied on a power of attorney dated January 28, 1966, to authorize its representative to file the suit. The court noted that the power of attorney was not executed in accordance with Section 85 of the Indian Evidence Act, which specifies the requirements for due execution of such documents. As the power of attorney was not registered before the appropriate authorities, no presumption of its due execution could be made. However, the plaintiff successfully proved the conferment of powers through a board resolution, as per the Companies Act. Proof of accounts: The plaintiff presented copies of accounts to establish the debt owed by defendants Nos. 1 to 3. However, the court found that these accounts were not proven as per Section 34 of the Evidence Act, which necessitates proper verification to charge individuals with liability based on account entries. Merely producing ledger copies or entries was insufficient to hold the defendants liable for the debt. Dishonoured cheques: The plaintiff provided evidence of dishonoured cheques issued by defendants Nos. 1 to 3, indicating their indebtedness. The court noted that these cheques, along with subsequent dishonoured payments, confirmed the defendants' failure to pay the outstanding amount owed to the plaintiff. The dishonoured cheques served as proof of the defendants' liability towards the plaintiff. Claim for interest: The plaintiff claimed interest on the unpaid amount based on the Dealer's Sales Agreement terms, which specified an interest rate of 18% per annum. The court upheld the claim for interest, ruling that defendants Nos. 1 to 3 were jointly and severally liable to pay the principal amount along with the accrued interest from the date of supply of the tractor until the realization of the debt. In conclusion, the court passed a decree in favor of the plaintiff against defendants Nos. 1 to 3 for the principal amount of Rs. 1,06,000 along with interest at the rate of 18% per annum. The interest was applicable from the date of supplying the tractor to defendant No. 4 until the date of filing the suit and its realization. No costs were awarded in the judgment.
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