2015 (7) TMI 1395 - HC - Companies Law

Validity of summary suit - deficiencies in supply of material for which the plaintiffs issued credit notes - suppression of any material fact or not - HELD THAT - The defendants have admitted in their reconciliation statement attached to their email dated 7.11.2012 that a sum of ₹ 9,75,88,621/- is payable to the plaintiffs. In the letter of 1.2.2013 from the defendants' Advocate to the plaintiffs' Advocate, the defendants in any event admit that sum of ₹ 3,83,12,035/is payable. Therefore, the plaintiffs should in any event be entitled to summary decree for ₹ 3,83,12,035/-. As regards the balance amount of ₹ 2,92,76,586/and ₹ 3,00,00,000/, there is no evidence that the goods were substandard or there were even discussion with the plaintiffs. There is also nothing on record to show that the defendants brought to the notice of the plaintiffs goods worth ₹ 3 crore was lying unutilized and the plaintiffs had agreed to take it back. The defendants don't even mention where these goods are and how they valued it out ₹ 3 crores (approximately). In the circumstances, the defence raised by the defendants in my view, are bogus, illusionary and moonshine. Interest - HELD THAT - The invoices raised does provide interest @ 30% p.a. and therefore, the defendants are also entitled to the contractual rate of interest upto the date of filing of the suit. Application disposed off.

Summary

Issues:
Plaintiffs' claim based on contracts evidenced by 75 invoices, non-payment by defendants, defense raised by defendants, suppression of facts, parallel proceedings, interest rate dispute.

Analysis:
1. The plaintiffs filed a suit based on 75 invoices for the supply of TMT steel bars to the defendants between April and August 2012. The total amount claimed was Rs. 98,509,610. The defendants partially paid Rs. 7,57,253 but failed to pay the remaining amount. The plaintiffs demanded payment through an advocate's notice, asserting a total due amount of Rs. 9,75,88,621 plus interest at 30% p.a. The defendants disputed the claim, raising various defenses.

2. The defendants' defenses included the absence of cause of action, issues with the quality of supplied goods, discrepancies in documents, and the contention that two parallel proceedings cannot be maintained. The defendants also disputed the interest rate of 30% p.a. claimed by the plaintiffs, arguing it was invalid. However, the court found the defendants' defenses lacking in substance and credibility.

3. The defendants alleged suppression of facts by the plaintiffs regarding a letter stating the quality issues with the supplied goods. The court examined the contents of the letter and found that the defendants had admitted a substantial amount was due for payment. The court concluded that the defendants' objections seemed like an afterthought to avoid payment rather than genuine disputes.

4. Regarding the claim of parallel proceedings, the court distinguished the present case from the cited judgment and allowed the simultaneous pursuit of civil suit and company petition. The court emphasized that both remedies serve different purposes and can proceed concurrently.

5. The court addressed the interest rate dispute, noting that the invoices clearly stated the interest rate of 30% p.a. The court upheld the contractual interest rate and ordered the defendants to pay the principal amount with interest. The court directed the defendants to deposit a specified amount within a set timeframe and allowed them to file a written statement upon compliance.

6. In conclusion, the court decreed in favor of the plaintiffs for the principal amount with interest, dismissed the defendants' defenses as unsubstantiated, and set out further directions for compliance and potential exparte decree in case of non-compliance. The judgment highlighted the importance of honoring contractual terms and the consequences of failing to meet payment obligations.