2018 (10) TMI 772 - HC - Companies Law

Decree for recovery of suit - Recovery from the defendant together with interest @ 22% p.a. for the goods sold and delivered to the defendant - Plaintiff entitled to the suit claim - Whether the claim of the plaintiff for the materials sold and delivered are true and valid? - Held that - From a perusal of Ex.P.4 and Ex.P.5, it could be seen that the defendant has specifically admitted his liability. Even though the defendant in his written statement stated that he has paid the entire outstanding amount to the plaintiff, in his cross examination, he has admitted that he has not produced any materials much less the statement of account to substantiate his contention. Even in his cross examination, he categorically admitted that he has not produced the invoices available in his office for which he alleged to have already made payment to the plaintiff. Considering Ex.P.3 Invoice (series) and the categoric statement made by the defendant in his cross examination admitting his liability under Ex.P.4 and P.5 and in the absence of any material to substantiate his contention regarding payment of outstanding amount, this court is of the considered view that the plaintiff has established its claim. Hence, the plaintiff is entitled for recovery of the suit amount together with interest. These issues are answered accordingly in favour of the plaintiff and against the defendant. Whether there was any payment of ₹ 5,00,000/- on 22.07.2009 as alleged by the defendant? - Held that - Even though the defendant contended that the plaintiff had received a sum of ₹ 5,00,000/- by way of demand draft dated 22.07.2009 as final settlement, there is no material to substantiate his contention. However, from a perusal of Ex.P.2 statement of account coupled with Ex.P.3-Invoice (series), it could be seen that the plaintiff had adjusted the said sum of ₹ 5,00,000/- paid by the defendant towards outstanding dues on 23.07.2009 itself and still there was an outstanding of ₹ 19,65354.57 paise as on that date.The defendant did not produce any other materials to substantiate his claim that he had settled the entire outstanding dues. Thus, this is issue is also answered against the defendant and in favour of the plaintiff. Other relief the plaintiff is entitled - whether plaintiff is entitled to charge interest at the rate specified in the invoices on the overdue payments? - Held that - Contention of the defendant is liable to be rejected for the simple reason that the private complaint filed under Section 200 of Cr.P.C. alleging offence under Section 138 of The Negotiable Instruments Act was relating to dishonor of cheque issued by the defendant for ₹ 9,71,400/- as against the actual outstanding of ₹ 19,65,354/-. Therefore, the plaintiff is entitled to claim interest on overdue payments. However, this court is of the view that the rate of interest claimed by the plaintiff appear to be exorbitant and considering the commercial relationship between the parties and the rate of interest prevailed during the relevant point of time, this court is inclined to order for interest @ 18% p.a. from the date of plaint till date of decree and thereafter 12% p.a. till date of realization. This court holds that the plaintiff is entitled for decree for recovery of suit amount against the defendant with interest as indicated above. This is answered accordingly and the plaintiff is not entitled for any other relief except the relief granted hereinabove.

Summary

Issues Involved:
1. Plaintiff's entitlement to the suit claim
2. Validity of the claim for materials sold and delivered
3. Alleged payment of ?5,00,000 on 22.07.2009
4. Relief entitled to the plaintiff

Analysis:

Issue Nos. 1 and 2:
The plaintiff sought recovery of ?35,21,914.57 from the defendant with interest for goods sold and delivered. The plaintiff provided invoices as evidence of the outstanding amount. The defendant did not deny receiving the goods or the liability in the invoices. Moreover, the defendant admitted the liability in letters and undertook to pay in installments. Despite the defendant's claim of payment, he failed to provide evidence or statements to support it. The court found in favor of the plaintiff, establishing the claim and entitlement to recovery.

Issue No. 3:
The defendant contended that a payment of ?5,00,000 was made as final settlement, but failed to substantiate this claim with evidence. Examination of accounts and invoices showed that this amount was adjusted towards the outstanding dues, leaving a balance. As the defendant could not provide proof of settling the entire amount, this issue was decided in favor of the plaintiff.

Issue No. 4:
Regarding the claim for interest on overdue payments, the plaintiff argued for interest as per the invoices at 22% p.a. The defendant disputed this, alleging the plaintiff inflated the claim for jurisdiction purposes. The court acknowledged the plaintiff's right to claim interest but deemed the 22% rate as excessive. Considering the commercial relationship and prevailing rates, the court ordered interest at 18% p.a. till the decree date and 12% p.a. thereafter. The plaintiff was granted the decree for the suit amount with the adjusted interest rates.

In conclusion, the court decreed in favor of the plaintiff for ?35,21,914.57 with interest at 18% p.a. till the decree date and 12% p.a. thereafter, along with costs of the suit. The judgment addressed each issue comprehensively, analyzing the evidence presented and legal arguments to reach a fair decision.