2014 (8) TMI 1232 - HC - Indian Laws

Recovery of dues - validity of claim of interest in addition to amount due - Cheque was given as security - non admission of liability - HELD THAT - There is no material on record to show that there is an agreement between the parties regarding the claim of interest. Moreover, the claim for interest cannot be said to be a liquidated demand. A perusal of Order 37, Rule 1, sub-rule 2 of the Code makes it clear that the dispute does not fall in any of the sub-clauses of sub-rule 2, in view of the claim of interest made by the petitioner. This alone raises a triable issue. Therefore, in the view of this Court, unconditional leave to defend has rightly been granted by the City Civil Court.

Summary

Issues Involved:
1. Challenge to the order granting unconditional leave to defend.
2. Dispute regarding the quality of goods supplied.
3. Dispute over the claim of interest and its impact on the summary suit.
4. Admission of liability based on the letter dated 25.11.2010.
5. Applicability of cited judgments to the present case.

Detailed Analysis:

1. Challenge to the Order Granting Unconditional Leave to Defend:
The petitioner challenged the order dated 27.07.2012, passed by the City Civil Court, Ahmedabad, which granted unconditional leave to defend to the respondent in Summary Suit No. 554 of 2011. The petitioner argued that the City Civil Court misread the respondent's letter dated 25.11.2010, which allegedly admitted liability for outstanding dues. The petitioner contended that the respondent's cheques were dishonored, indicating clear liability.

2. Dispute Regarding the Quality of Goods Supplied:
The respondent raised a defense regarding the inferior quality of goods supplied by the petitioner. The petitioner argued that this defense was raised only after the filing of the summary suit and lacked documentary evidence. The respondent claimed that the goods were lying in the godown and had informed the petitioner to take them back due to their inferior quality.

3. Dispute Over the Claim of Interest and Its Impact on the Summary Suit:
The respondent contended that the suit could not be tried as a summary suit due to the absence of a contract regarding interest between the parties. The respondent argued that the inclusion of interest in the claim took it out of the ambit of summary proceedings, citing the judgment in *Zonal Manager v. Akhilbhai B. Mehta* (2002). The petitioner, however, claimed interest on delayed payments, which was disputed by the respondent.

4. Admission of Liability Based on the Letter Dated 25.11.2010:
The petitioner emphasized the letter dated 25.11.2010, arguing that it showed the respondent's admission of liability. The respondent countered that the letter merely requested a detailed statement of accounts and did not admit any liability. The respondent also noted that the cheques mentioned in the letter were given as security and should not be included in the statement of accounts.

5. Applicability of Cited Judgments to the Present Case:
The petitioner relied on several judgments to support their case, including:
- *M/s. Shyam Dri Power Ltd. v. Bhav Shakti Steel Mines Private Limited* (Delhi High Court)
- *Sify Ltd. v. First Flight Couriers Ltd.* (Supreme Court)
- *V.K. Enterprises And Another v. Shiva Steels* (Supreme Court)

The respondent distinguished these judgments, arguing that they were not applicable to the present case due to different factual contexts and legal parameters. The respondent emphasized that the City Civil Court correctly granted unconditional leave to defend based on the disputed accounts and the lack of a liquidated demand.

Conclusion:
The High Court analyzed the material on record and the impugned order of the City Civil Court. It found that the City Civil Court did not commit any error of law or jurisdiction in granting unconditional leave to defend. The Court held that the respondent's defense raised a triable issue, indicating a fair and reasonable defense. Consequently, the petition was rejected, and the rule was discharged with no order as to costs.