2019 (3) TMI 962 - HC - Companies Law

Outstanding dues - undefended suit - Plaintiff entitlement to get the decree prayed for in the instant suit - HELD THAT - As established from the evidence on record that the defendant was to supply 92,000 Metric Tonnes (MT) of Iron Ore fines to the plaintiff company after the advance payment for the same was made. The plaintiff company paid a sum of ₹ 15,66,50,000/- to the defendant in lieu of the agreement with the defendant, but the plaintiff company received Iron Ore fines worth only ₹ 5,84,10,000/-, thus supply of iron ore fines worth ₹ 8,82,40,000/- remained outstanding. The plaintiff company tried to approach the defendant on various occasions demanding the outstanding amount but the defendant never repaid the said amount to the plaintiff company. The defendant through an e-mail dated 13th November, 2011 acknowledged the sum due and also promised to refund an initial amount of ₹ 4,20,00,000/- by January, 2012 to the plaintiff company. When the defendant on various occasion failed to pay the amount due to the plaintiff company, the plaintiff company on 31st March, 2014 through its advocate filed a Civil Suit in this Court with regard to the outstanding claim of the plaintiff. It is to be noted that the suit is well within the period of limitation. It is to be noted that the defendant has entered appearance but chosen not to file any written statement. In view of the same the suit has been treated as an undefended suit. The plaintiff company has prayed for ₹ 12,00,06,400/-, out of which ₹ 8,82,40,000/- is the principal amount and ₹ 3,17,66,400/- is the interest amount (calculated @ 18% p.a. from January, 2012 to December, 2013). In view thereof, the plaintiff company is entitled to get an ex-parte decree against the defendant for the principal sum of ₹ 8,82,40,000/- along with the interest @ 9% p.a. from 13th November, 2011 till the date of payment.

Summary

Issues:
Claim for outstanding payment due to non-supply of iron ore fines, Dishonour of cheque, Entitlement to decree for principal sum and interest.

Claim for Outstanding Payment:
The plaintiff, a mining company, entered into an agreement with the defendant, a mining business proprietor, to purchase 92,000 Metric Tonnes of iron ore fines. The plaintiff made an advance payment of &8377; 15,66,50,000, but the defendant only supplied iron ore fines worth &8377; 5,84,10,000. Despite multiple requests, the defendant did not supply the remaining &8377; 8,82,40,000 worth of iron ore fines. The defendant acknowledged the outstanding amount and promised to refund &8377; 4,20,00,000 but failed to do so. The plaintiff filed a suit seeking a decree of &8377; 12,00,06,400, including the principal amount and interest. The defendant did not file a written statement, resulting in the suit being treated as undefended.

Dishonour of Cheque:
The defendant issued a cheque of &8377; 4,20,00,000 to the plaintiff, which was dishonoured due to insufficient funds. The plaintiff issued a notice under Section 138 of the Negotiable Instrument Act, 1881. Despite further promises to pay, the defendant failed to settle the outstanding amount, leading to the initiation of the civil suit.

Entitlement to Decree for Principal Sum and Interest:
The Court found that the plaintiff was entitled to an ex-parte decree against the defendant for the principal sum of &8377; 8,82,40,000 along with interest at 9% p.a. from 13th November, 2011 till the date of payment. The total decree amount was determined to be &8377; 12,00,06,400, comprising the principal amount and interest calculated at 18% p.a. from January, 2012 to December, 2013. No costs were awarded, and the department was instructed to expedite the decree process.

In conclusion, the judgment favored the plaintiff's claim for outstanding payment, addressed the issue of the dishonoured cheque, and granted a decree for the principal sum and interest against the defendant. The Court highlighted the defendant's failure to fulfill the agreement, acknowledge the debt, or provide a valid defense in the case. The decision emphasized the legal obligations arising from commercial agreements and the consequences of non-compliance, ensuring the plaintiff's entitlement to the outstanding amount and appropriate interest as per the terms of the agreement and legal provisions.