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2018 (10) TMI 1010 - HC - Indian LawsDishonor of cheque due to insufficiency of funds - Section 138 of the Negotiable Instruments Act - Clause (a) of sub-Rule (6) of Rule 3 of Order XXXVIII of C.P.C. - Held that - The defendant has admitted their liability in no uncertain terms - After accepting their liability in no uncertain terms, at least vide 3 plaint documents, which have been alluded to supra, the defendant after receiving summons in the summary suit on 01.03.2017 has not entered appearance within 10 days and taken recourse to sub-rule (5) of Rule 3 of Order XXXVII of C.P.C. - Therefore, the plaintiff is certainly entitled to a judgment forthwith under Clause (a) of sub-Rule (6) of Rule 3 of Order XXXVIII of C.P.C. Whether there is a contract between parties to lis regarding rate of interest in the light of Section 34 of C.P.C.? - Held that - As there is a contract between the parties, wherein the parties have agreed to pay interest at the rate of 0.375% per week, which according to the learned counsel for plaintiff translates to 18% p.a., plaintiff is entitled to get interest at 18% per annum, though 24% per annum has been prayed for in the prayer paragraph. Considering the trajectory of the suit and considering the fact that the sole defendant has not chosen to enter appearance and has compelled the plaintiff to carry the matter to its logical end by pursuing this suit for over 1 years (to be noted plaint was presented on 25.01.2017), I am of the view that the plaintiff is entitled to costs - Suit is decreed with costs as prayed for.
Issues Involved:
1. Application for summary judgment under Order XIII-A of C.P.C. as amended by the Commercial Courts Act, 2015. 2. Defendant's failure to appear and defend the suit. 3. Plaintiff's entitlement to summary judgment under Order XXXVII of C.P.C. 4. Defendant's admitted liability and dishonored cheques. 5. Contractual interest rate and costs. Detailed Analysis: 1. Application for Summary Judgment: The plaintiff filed an application under Order XIII-A of the Code of Civil Procedure, 1908 (C.P.C.), as amended by the Commercial Courts Act, 2015, seeking a summary judgment. The plaintiff's counsel argued that the defendant had no real prospects of successfully defending the claim and that there was no compelling reason to delay the claim by recording oral evidence. 2. Defendant's Failure to Appear: The defendant was duly served with suit summons on 01.03.2017 but did not appear or file a written statement. Consequently, the defendant was set ex-parte on 05.02.2018. The plaintiff's counsel emphasized that the defendant’s failure to appear justified the application for summary judgment. 3. Plaintiff's Entitlement to Summary Judgment: The court examined the plaintiff's entitlement to a summary judgment under Order XIII-A of C.P.C. However, it was noted that an application for summary judgment cannot be made in a suit originally filed as a summary suit under Order XXXVII of C.P.C. The plaintiff's counsel then requested the court to treat the application as a prayer under clause (a) of sub-Rule (6) of Rule 3 of Order XXXVII C.P.C., which allows for judgment if the defendant has not applied for leave to defend. 4. Defendant's Admitted Liability and Dishonored Cheques: The plaintiff, a company engaged in generating and selling electricity, claimed that the defendant had not paid for the power supplied, resulting in a debit balance of ?1,30,27,680/- as of 30.06.2015. The defendant issued post-dated cheques totaling ?1,50,00,000/-, which were dishonored due to insufficient funds. The defendant admitted liability in various communications, including a reply to the plaintiff’s legal notice, and requested time to settle the dues. 5. Contractual Interest Rate and Costs: The plaintiff claimed interest at 0.375% per week (18% per annum) as per the terms of the invoices. The court confirmed the contractual agreement between the parties regarding the interest rate. Given the defendant's failure to appear and the plaintiff's prolonged effort to pursue the suit, the court awarded the plaintiff interest at 18% per annum and costs. Conclusion: The court treated the application as one under Order XXXVII Rule 3(6a) of C.P.C. and decreed the suit with costs as prayed for by the plaintiff. The judgment emphasized the defendant's admitted liability, the contractual interest rate, and the plaintiff's entitlement to costs due to the defendant's non-appearance and the prolonged litigation process.
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