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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
SUMMONS FOR JUDGMENT NO. 261 OF 2012
IN
SUMMARY SUIT NO. 1378 OF 2012
Dongreen Resins & Chemicals Private Limited )
a Private Limited Company incorporated under the )
provisions of the Companies Act, 1956, having its )
Registered Office address at 509, 5th Floor, Western Edge-1,)
Near Sai Service, Western Express Highway, )
Borivali (East), Mumbai-400 066
ig )..Applicant/
Plaintiff.
In the matter between:
Dongreen Resins & Chemicals Private Limited )
a Private Limited Company incorporated under the )
provisions of the Companies Act, 1956, having its )
Registered Office address at 509, 5th Floor, Western Edge-1,)
Near Sai Service, Western Express Highway, )
Borivali (East), Mumbai-400 066 )...Plaintiff
versus
M/s. Balaji Fiber Reinforce Pvt. Ltd. )
a Private Limited Company incorporated under the )
provisions of the Companies Act, 1956, having its )
Registered Office address at Survey No. 291-1 & 2 )
Sakarda Bhadarva Road, near Poicha (Khandi) )
Vadodara-391 780 )..Defendant
Mr. Rohan Cama, instructed by M/s. Divya Shah Associates, for the Plaintiff.
Mr. Kalpesh Joshi for the Defendant.
CORAM: S.J. KATHAWALLA, J.
DATE: October 01, 2012
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ORAL JUDGMENT:
1. The above Summary Suit is filed by the Plaintiff against the Defendant for an order and decree against the Defendant to pay to the Plaintiff a sum of Rs.
1,47,30,450/- as per the particulars of claim set out in Exhibit-I to the Plaint, along with further interest at the rate of 21 per cent per annum to be calculated on Rs. 1,47,30,450/- from the date of the suit till payment and/or realisation and costs of the suit.
2. The writ of summons was served upon the Defendant on 4 th July 2012 and the Vakalatnama of the Advocate appearing for the Defenddant was filed on 11th July 2012. The Summons for Judgment was served on the Advocate for the Defendant on 29th August 2012. However, no affidavit in reply is filed by the Defendant till date.
3. Pursuant to the purchase orders dated 5th September 2011, 8th October 2011 and 19th December 2011 placed by the Defendant with the Plaintiff, the Plaintiff delivered /supplied Polyester Resin -ISO and Polyester Resin-Ortho ("the said products") to the Defendant under 12 invoices aggregating to Rs.
1,95,79,951/- (Exhibits D-1 to D-12 to the Plaint).
4. Admittedly in the purchase order the Defendant has provided for the payment mode as follows:
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"60 days from the Date of Receipt of Material in Good Condition"
All the invoices under which the goods are supplied to the Defendant have a condition that interest will be recovered at the rate of 24 per cent per annum on overdue unpaid dues. The Defendant has admittedly received the goods along with the said invoices and have after receipt of the goods never objected to the aforementioned interest clause. The Plaintiff has repeatedly sent e-mails to the Defendant calling upon the Defendant to make the overdue payments.
5. On 13th December 2011, the Defendant admitted its difficulty in making payments and addressed an e-mail to the Plaintiff as follows:
" We are experiencing some difficulties in receiving our accounts receivable. As and when we will receive the payment from our party we shall transfer the funds through RTGS. Hence, you are requested to dispatch the material immediately on replacement basis as we have urgent requirement of ISO Resin."
6. On 20th January, 2012, the Plaintiff through e-mail represented to the Defendant as follows:
" There is an imminent danger of our plant being closed for want of raw materials. The overdue amount above 90 days from you is Rs. 90 lacs. I am incurring heavy demurrage on imported consignment as I do not have funds to clear the consignment. It is my fervent appeal to you to release some funds positively tomorrow. Your help at this stage will keep our doors open for continuous business association."::: Downloaded on - 09/06/2013 19:12:17 ::: KPP -4-
7. Despite the above request/appeal to the Defendant, the Defendant did not clear the balance outstanding which compelled the Plaintiff to serve a notice dated 10th March 2012 to the Defendant setting out in detail the facts in the matter and calling upon the Plaintiff to pay an amount of Rs. 1,36,76,923/-
together with interest at the rate of 21 per cent per annum thereon, amounting to Rs. 5,97,062/-, aggregating to a sum of Rs. 1,42,73,985/-, along with a sum of Rs. 2 crores as damages. The Defendant by its reply dated 19 th March 2012 alleged that there is no understanding or acceptance as regards payment of interest between the Plaintiff and the Defendant and the Defendant has not accepted the debit notes for overdue interest received from the Plaintiff but has returned back the same. The Defendant has, after recording that they had returned certain material amounting to Rs. 34,13,320/- to the Plaintiff, in paragraph 4 of his reply, accepted that the entire principal amount claimed by the Plaintiff in its notice i.e. Rs. 1,36,76,923/- is due and payable by the Defendant to the Plaintiff. Paragraphs 4 and 5 of the said reply letter are therefore reproduced hereunder:
"4. We would also bring to your notice as you have already stated that you have accepted the amount payable by us to you of Rs. 1,36,76,923/-. You have stamped and signed the account confirmation sent to you vide our letter dated 11 th February, 2012 showing outstanding dues to you of Rs. 1,36,76,923/- and accepted the same. Hence this brings to the very fact that you accept the amount payable by us to you of Rs. 1,36,76,923/-.
Hence there is no question of paying to you even a single rupee ::: Downloaded on - 09/06/2013 19:12:17 ::: KPP -5-
over and above the amount of Rs. 1,36,76,923/-.
5. We understand the situation of our customers for delay in giving us payment. In the same manner we expect you to understand our situation for delay in payment. We agree that your outstanding dues as on date amounts to Rs. 1,36,76,923/-. From the total purchases made from you as on date amounting to Rs. 3.72 crores, you should appreciate the fact that we have already made payment to you of Rs. 2.35 crores. We have never declined that we won't make payment of our outstanding amount of Rs. 1,36,76,923/-. We will surely make this payment but due to unavailability of funds there is a delay in payment. We are not holding your payment intentionally by any means. We also want to release you payment as early as possible."
8. From the above paragraphs it is clear that on 19 th March 2012, the Defendant has accepted that an amount of Rs. 1,36,76,923/- was due and payable by the Defendant to the Plaintiff and that the said amount is not paid by the Defendant due to unavailability of funds, and the amount would be released as early as possible. However, on 19 th March 2012, the Defendant has not made any payment to the Plaintiff despite admitting its liability to pay the same. The purchase order along with the invoices and the delivery challan constitute a written contract between the parties. It is not the case of the Defendant that the amount of interest calculated by the Plaintiff is incorrect and therefore the Plaintiff is not entitled to receive the same. It is the case of the Defendant that it has not agreed to pay interest. The said contention of the Defendant in my view is incorrect and dishonest since under the purchase order the Defendant has ::: Downloaded on - 09/06/2013 19:12:17 ::: KPP -6-
agreed to pay the amount within 60 days from the date of receipt of material in good condition. The invoice provides that interest will be charged at the rate of 24 per cent on the overdue period. The said condition in the invoice was never objected to by the Defendant. The Defendant has not denied or disputed the receipt of the invoice. The Defendant has therefore accepted the material along with the invoice on the terms and conditions mentioned in the invoice and without raising any dispute on the conditions contained therein. The Defendant therefore cannot be heard to say that there was no understanding between the parties to pay interest on delayed payments. The Plaintiff has admittedly sent debit notes for the overdue interest to the Defendant which the Defendant has admittedly returned back. It was incorrect on the part of the Defendant to return back the said debit notes and not accept the same. As stated earlier, the Defendant has not filed any affidavit in reply to the Summons for Judgment and has only submitted that they are not entitled to pay any interest to the Plaintiff, which contention as stated herienabove is incorrect and dishonest. This Court enquired from the Advocate for the Defendant that despite the Defendant having admitted in its reply dated 19th March, 2012 that an amount of Rs. 1,36,76,923/-
is due and payable by the Defendant to the Plaintiff, why no payments whatsoever have been made till date by the Defendant to the Plaintiff. To this, there was no convincing reply. Therefore, in order to test the bona fides of the Defendant, this Court enquired from the learned Advocate for the Defendant whether the Defendant was willing to pay the admitted amount of ::: Downloaded on - 09/06/2013 19:12:17 ::: KPP -7-
Rs. 1,36,76,923/- to the Plaintiff along with interest at least from 19 th March, 2012, i.e. when the Defendant admitted in writing that it is unable to pay the said amount due to unavailability of funds and will make payment as early as possible. The Learned Counsel for the Defendant after consulting his clients, who were present in Court informed the Court that though the Defendant is willing to pay the amount of Rs. 1,36,76,923/- to the Plaintiff within a period of two months, it shall not pay any interest even from the date of its admission.
9. From the aforesaid facts, it is established beyond any doubt that apart from the fact that the Defendant had not filed any affidavit-in-reply to the Summons for Judgment, the Defendant is taking a dishonest stand of not being liable to pay any interest to the Plaintiff on the amounts admittedly due and payable by the Defendant to the Plaintiff. The defence sought to be raised by the Defendant in the absence of any affidavit in reply is baseless, untenable and mere moonshine. In view thereof, the Plaintiff is entitled to a decree as prayed.
The Summons for Judgment is therefore made absolute as prayed with a modification that interest payable by the Defendant to the Plaintiff on the principal amount from the date of filing of the suit till payment and/or realisation shall be at the rate of 18 per cent per annum and not 21 per cent per annum as sought. The Summons for Judgment is accordingly disposed of. The suit also stands disposed of.
(S. J. KATHAWALLA, J.) ::: Downloaded on - 09/06/2013 19:12:17 :::