The Calcutta High Court, while disposing of an application praying for judgment upon admission for a sum of Rs.1,27,50,762/- along with an interest at the rate of 18% per annum, held that unless the admission is clear, unambiguous, and unconditional, the discretion of the Court should not be exercised to deny the valuable right of a defendant to contest the claim.
Brief Facts:
The plaintiff is engaged in the business of manufacturing integrated specialty steel and value-added steel products. Defendant No. 1 is a part of Hema Group of Companies and is engaged in the business of manufacture of accumulators, primary cells, primary batteries, and allied businesses, and Defendant Nos. 2 and 3 are the directors and principal officers of Defendant No. 1 company. Defendant no.1 through defendant no.3 approached the plaintiff for a supply of diverse grades and dimensions of spring steel wires, with the object of augmenting its business activities and furthering its business interests.
Based on the representations made and/or assurances given by defendants Nos. 2 and 3 on behalf of defendant no.1, the plaintiff agreed to supply the said goods to defendant no.1. Despite repeated requests, the defendants failed to discharge the amount by them to the plaintiff. After the failure of the Mediation process, the plaintiff filed the present suit.
Contentions of the Plaintiff:
The Learned Counsel for the Plaintiff submitted that even after the publication of the notice, the defendants did not enter an appearance in the suit. He argued that the defendants made clear and unequivocal admission but neither they entered an appearance nor did they file a written statement and thus there is no defense, hence the plaintiff is entitled to get judgment upon admission.
Observations of the Court:
The Court noted that as per the terms of the invoices, the defendants agreed to pay the amount within 45 to 60 days from despatch of materials and in case of failure to pay the amount within the time prescribed, the defendants are liable to pay 18% interest on the billed amount. Even after the publication of the notice of this application as well as of the suit, the defendants neither entered appearance nor filed the written statement or written objections.
The Court observed that a judgment can be given on an “admission” contained in the minutes of a meeting. However, the admission should be categorical. It should be a conscious and deliberate act of the party making it, showing an intention to be bound by it. Order 12 Rule 6 being an enabling provision, it is neither mandatory nor peremptory but discretionary. The Court said that unless the admission is clear, unambiguous, and unconditional, the discretion of the Court should not be exercised to deny the valuable right of a defendant to contest the claim. The discretion should be used only when there is a clear “admission” which can be acted upon. From the email on record, the defendants clearly, unequivocally, and unambiguously admitted the amount due amount paid to the plaintiff.
The decision of the Court:
The Calcutta High Court, disposing of the application, held that the defendants clearly and unequivocally admitted the claims of the plaintiff and did not pay interest, thus the plaintiff is entitled to get a decree upon admission.
Case Title: Usha Martin Ltd. v Hema Springs Private Limited & Ors.
Coram: Hon’ble Justice Krishna Rao
Case no.: I.A. G.A. No. 2 of 2023
Advocate for the Plaintiff: Mr. Arif Ali
Advocate for the Defendant: None
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