THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment Pronounced on: 25.01.2011
+ CS(OS) No. 1689/2010
M/S BRAKEWEL AUTOMOTIVE COMPONENTS (INDIA)
PVT. LTD .....Plaintiff
- versus -
M/S KARPAGGA BRAKEWEL & ORS. .....Defendant
Advocates who appeared in this case:
For the Plaintiff: Mr. J.S. Bakshi
For the Defendant: None.
CORAM:-
HON'BLE MR JUSTICE V.K. JAIN
1. Whether Reporters of local papers may No.
be allowed to see the judgment?
2. To be referred to the Reporter or not? No.
3. Whether the judgment should be reported No.
in Digest?
V.K. JAIN, J. (ORAL)
1. This is a suit filed under Order 37 of the Code of Civil Procedure for recovery of Rs.35,81,952.12p. The case of the plaintiff is that it supplied auto components and parts to the defendant from time to time and raised bills for the price of those goods. A sum of Rs.25,49,432.12p was alleged to be due from the defendants as principal sum as CS(OS)No. 1689/2010 Page 1 of 7 on 31st March, 2008. It is further alleged that the aforesaid dues were admitted by defendant No.3 as a partner of defendant No.1 on the statement of accounts for the period ending 31st March, 2008. The plaintiff has claimed the aforesaid amount of Rs.25,49,432.12p along with interest thereon with effect from 1st April, 2008 at the rate of 18% per annum, as per market rate, practice, usage, custom and contractual rate of interest between the parties. The amount of interest claimed by the plaintiff comes to Rs.10,32,520/-.
2. Summons were served on the defendants on 11 th October, 2010. There was appearance on behalf of the defendants on 28th October, 2010 where it was noted that defendants had been served and their counsel, who had been engaged recently intended to file appearance along with an application for condonation of delay.
3. Order 37 Rule 2(3) of the Code of Civil Procedure provides that the defendant shall not defend the suit to which Order XXXVII applies, unless he enters appearance. It further provides that in default of his entering appearance, the allegations in the plaint shall be deemed to be admitted and the plaintiff shall be entitled to a decree for CS(OS)No. 1689/2010 Page 2 of 7 any sum, not exceeding the sum mentioned in the summons, together with interest at the rate specified, if any, up to the date of the decree. Rule 3 of Order XXXVII provides that in a suit to which this Order applies, the plaintiff shall, together with the summons serve on the defendant a copy of the plaint and annexures thereto and the defendant within 10 days of such service enter an appearance either in person or by pleader and in either case he shall file in Court an address for service of notices on him. It further provides that all orders, summons, notices etc. shall be deemed to have been duly served on the defendant if they are left the address given by him for such service. Sub-rule (7) of Rule 3 provides that the Court may for sufficient cause shown by the defendant, excuse the delay of the defendant in entering an appearance.
4. A perusal of the record shows that vakalatnama only on behalf of defendant Nos. 1 and 2 has been filed. No vakalatnama on behalf of defendant No.3 has, however, been filed. The Vakalatnama on behalf of defendants No.1 and 2 has been filed on 28th October 2010 though the defendants were served on 11th October 2010. No application for condonation of delay in filing the appearance CS(OS)No. 1689/2010 Page 3 of 7 has been filed. Since the appearance was not filed within the prescribed period of ten days and no application for condonation of delay in filing appearance has been filed, the plaintiff, in view of the provisions contained in Rule 2(3) of Order XXXVII of the Code of Civil Procedure has become entitled to judgment forthwith.
5. The suit is based on balance confirmation purporting to be signed by defendant No.3, who is a partner of defendant No.1. The balance confirmation contains not only an acknowledgment of the debt but, also implicit promise to pay the amount acknowledged therein.
6. In Daya Chand Uttam Prakash Jain & Anr. v. Santosh Devi Sharma, 67 (1997) DLT 13, in a suit under Order 37 of the Code of Civil Procedure, the plaintiff relied upon Statements of Account which contained acknowledgement of a balance, payable to the plaintiff. It was held by this Court that a suit on the basis of a written acknowledgement of a pre-existing debt being a written contract could form a basis for recovery of an existing debt based on the said written contract in the shape of a written acknowledgement. This Court was also of the view that the acknowledgement was a promise to pay and contains all the CS(OS)No. 1689/2010 Page 4 of 7 essentials for formation of a written contract.
7. In Food Corporation of India v. Bal Krishan Garg, 21(1982) DLT 167, a Division Bench of this Court concurred with the view taken by Madras High Court in Commissioner of Wealth Tax vs. Pierce Leslie and Co. Ltd. AIR 1963 Madras 356 that Commissioner of Wealth Tax that the essential requisites of a debt are (1) an ascertained or readily calculable amount; (2) an absolute unqualified and present liability in regard to that amount with the obligation to pay forthwith or in future within a time certain; (3) the obligation must have accrued and be subsisting and should not be that which is merely accruing.
8. In S.C. Gupta v. Allied Beverages Co. Pvt. Ltd. in I.A. No.7987/2004 fin Suit No.542/2004 decided on 30 th April, 2007, this Court upheld a suit based on acknowledgement by the defendant in their Books of Account, Balance Sheets and Profit & Loss Accounts, filed under Order 37 of CPC. Hence, the balance confirmation amounts to a written contract within the meaning of Order 37 Rules 1 and 2 of the Code of Civil Procedure.
9. The principal amount confirmed by defendant No.3 as partner of defendant No.1 comes to Rs.25,49,432.12. CS(OS)No. 1689/2010 Page 5 of 7 The balance confirmation being dated 31st March 2008, the suit is well within the prescribed period of limitation. A perusal of the balance confirmation would also show that payments in writing were made by the defendants to the plaintiff from time to time. The last payment of Rs.40,000/- was made on 10th February 2008 vide cheque No.664734 dated 24th January 2008. In view of the provisions contained in Section 19 of the Limitation Act, a fresh period of limitation commenced from 10th February, 2008 when payment of Rs.40,000/- was made in writing vide cheque dated 24th January, 2008. The suit, therefore, has been filed within the prescribed period of limitation.
10. The plaintiff has claimed interest at the rate of 18% per annum. The plaintiff has claimed interest on the basis of practice, usage, custom as well as contractual obligation of the defendant. In any case, since this is a suit for price of goods sold and delivered, interest can also be awarded to the plaintiff under Section 61 of Sale of Goods Act. Considering the nature of transaction between the parties, I am of the view that interest should be awarded at the rate of 12% per annum. Amount of interest at the rate of 12% per annum comes to Rs.6,88,346/-. Thus, the total amount, CS(OS)No. 1689/2010 Page 6 of 7 which the plaintiff can recover from the defendants comes to Rs.32,37,782.12p.
11. For the reasons given in the preceding paragraphs, a decree for recovery of Rs. 32,37,778.12p. with proportionate cost and pendente lite and future interest at the rate of 12% per annum is thereby passed against the defendants and in favour of the plaintiff. The Memo of Costs can be filed today in the Registry.
12. The decree sheet be prepared accordingly.
(V.K. JAIN) JUDGE JANUARY 25, 2011 Ag/vk CS(OS)No. 1689/2010 Page 7 of 7