P C Chanda & Company Private ... vs Bharat Chemicals & Paints
2023 Latest Caselaw 270 Cal/2

                 IN THE HIGH COURT AT CALCUTTA

                 (Ordinary Original Civil Jurisdiction)

                       COMMERCIAL DIVISION



Present:

The Hon'ble Justice Krishna Rao



                               CS/158/2018


               P C Chanda & Company Private Limited
                                   Vs.
                      Bharat Chemicals & Paints



           Mr. Ratul Das
           Mr. Shiv Ratan Kakrania
           Mr. Tanuj Kakrania
           Mr. Karanjeet Sharma
                                         ...For the plaintiff.
           Mr. Arik Banerjee
           Mr. Shaunak Ghosh
           Mr. Sourav Mondal
                                         ...For the defendant.



Heard on              : 20.01.2023

Judgment on           : 31.01.2023
                                        2


Krishna Rao, J.:


      The plaintiff has filed the instant suit praying for a decree for a sum of

Rs. 14,69,095/- along with pendente lite interest and interest on judgment

@ 24 % per annum. After receipt of Writ of Summons, the defendant had

entered appearance and filed written statement. After filing of the written

statement, the plaintiff had filed a general application being GA 5 of 2021

praying for a decree on admission for a sum of Rs. 9,09,136/-. The

application filed by the plaintiff was duly contested by the defendant and

accordingly this Court had disposed of the said application on 24.03.2021

by passing following order :


             "In the facts of the present case, the defendant issued a cheque
      for a sum of Rs.9,09,136/- in favour of the plaintiff. The cheque was
      dishonoured upon presentation. The reason for dishonour is fund
      insufficient. There is no material on record to establish that the
      defendant stopped payment of the cheque for the ground as alleged
      today.

           In such circumstances, since the cheque was dishonoured for
      fund insufficient, the defence sought to raise by the defendant is
      moonshine.
             Consequently, there will be a decree for a sum of Rs.9,09,136/-
      in favour of the plaintiff and as against the defendant.

            The plaintiff will be entitled to interest at the rate of 8% per
      annum on and from July 1, 2017 till realization. The balance claim of
      the plaintiff along with the claim for interest for any other period are
      relegated to the suit.
            IA No. GA/5/2021 in CS/158/2018 is disposed of accordingly.
      The decree be drawn up expeditiously."



      The defendant had preferred an appeal against the order dt.

24.03.2021

being APD No. 4 of 2021. The appeal preferred by the defendant

was dismissed for default on 10.11.2022 and in the said order, it is also

clarified that "Interim order, if thereby any stand vacated".

In the order dated 24.03.2021 while disposing of the application filed

by the plaintiff being GA 5 of 2021, this Court had directed that the balance

claim of the plaintiff along with claim for interest for any other period are

delegated to the suit. In terms of the order dated 24.03.2021, the plaintiff

had proceeded the case further and accordingly on 11.07.2022, this Court

directed the parties to complete the discovery and inspection of the

documents within four (4) weeks and accordingly the matter was adjourned

till 22.08.2022. On 22.08.2022 though the Counsel for the plaintiff was

present but none appears on behalf of the defendant and the defendant has

also not offered for inspection of documents and also not come forward for

inspection of documents of the plaintiff and accordingly for the interest of

justice again the case was adjourned till 07.09.2022. On 19.09.2022, the

matter was again placed before this Court but none appears on behalf of the

defendant and the defendant had also not carried out inspection and

discovery of the documents and thus finding no other alternative fix the case

for witness action. On 27.09.2022, the plaintiff has examined the witness

and during his examination, three documents were exhibited but none

appears on behalf of the defendant and accordingly the evidence of the

plaintiff was closed and the case was fixed for argument. On 09.01.2022,

when the matter was taken up for argument, the Counsel for the defendant

had appeared and submits that the defendants have taken appropriate steps

for recalling of the order dt. 19.09.2022 and had prayed for time. For the

interest of justice, the case was adjourned till 16.11.2022. On 16.11.2022,

the defendant has filed two application being GA 6 of 2022 and GA 7 of

2022 for recalling of the order dt. 19.09.2022 and 27.09.2022 and

accordingly the Counsel for the plaintiff pray for time to file their affidavit in

opposition against the said applications. The case was adjourned till

20.12.2022. On 20.12.2022, the plaintiff has filed affidavit in opposition in

connection with both applications but none appeared on behalf of the

defendant but for the interest of justice, the defendants were given liberty to

file reply to the affidavit in opposition filed by the plaintiff and fixed the

matter on 04.01.2022. On 04.01.2022 none appears on behalf of either of

the parties and the case was adjourned on 13.01.2023. On 13.01.2023, the

Counsel for the respective parties have appeared and the Counsel for the

defendant submits that the defendant is ready to settle the matter by paying

the interest but required sometime and as per the submission made by the

Counsel for the defendant, the case was adjourned till 20.01.2023. On

20.01.2023, though the Learned Counsel for the respective parties have

appeared but neither the defendant has paid the interest amount nor had

filed the reply or pressed for hearing of the interlocutory application filed by

the defendant and accordingly the suit was taken up for hearing for final

argument was concluded.

Now, the plaintiff has claimed interest on Rs. 9,09,136/- @ 24 % per

annum in terms of the condition of invoices. Counsel for the plaintiff

submits that during the evidence of witness, invoices were exhibited being

Exhibit 2 collectively and in the said invoices, it is categorically mentioned

that "Interest @ 24% per annum will be charged if not paid within 15 days

from the date of receipt of the bill".

Counsel for the plaintiff submits that as the defendant failed to pay

amount of the bill within 15 days and as such the plaintiff is entitled to get

interest @ 24% per annum.

Counsel for the defendants submits that while passing the order dated

24.03.2021 in GA 5 of 2021, this Court had awarded interest @ 8% per

annum with effect from 01.07.2017 till realization and as such the plaintiff

is not entitled to get any further interest. Counsel for the defendants

submits that the plaintiff has already got a decree with respect of the

principal amount as well as interest and as such no further interest can be

granted to the plaintiff.

Counsel for the plaintiff in support of his claim has relied upon the

judgment reported in (1988) 1 SCC 418 (Executive Engineer (Irrigation)

Balimela & Ors. -vs- Abhaduta Jena & Ors.) and submits that the Court

can allow interest in the class of cases specified in Section 4(2) from the

dates stipulated to the dates stipulated in the provision and Section 5

provides that nothing in the Act shall affect the provisions of Section 34 of

the Code of Civil Procedure, 1908.

Considered the submissions made by the parties and materials on

record.

Though the defendant had filed written statement but the defendant

has neither come forward to cross examine the witness nor have adduced

any witness. Initially this Court had already granted decree on admission

with respect of the principal amount along with interest @ 8% per annum

from 01.07/2017 till realization.

As per submissions of the plaintiff after the order dated 24.03.2021,

the plaintiff had already initiated execution proceeding but till date the

defendant has not paid either the principal amount or the interest as

decreed by this Court. The main contention of the plaintiff is that in terms of

invoices there was a contract between the parties with respect of the interest

which clearly provides that in case, the defendant failed to pay the amount

within 15 days from the bill date, the defendant is liable to pay interest @

24% per annum. This Court while passing the order dated 24.03.2021 has

awarded interest @ 8% and relegated the further claim for trial. As per

Exhibit 3 i.e. Legal Notice sent by the plaintiff to the defendant dt.

04.08.2017 wherein the defendant has claimed interest @ 18% per annum.

The Judgment relied upon by the plaintiff in connection with Interest Act

and the said case pertains to the arbitration proceeding. In the said case,

the Hon'ble Supreme Court has defined Sections 3, 4 & 5 of the Interest Act.

There is no doubt if the parties have agreed for the interest in a contract, the

parties are entitled to get interest in terms of the contract. In the instance

case, the plaintiff has relied upon the invoices and claiming interest @ 24%

per annum and on the other hand, the plaintiff has claimed interest @ 18 %

per annum through Exhibit 2 from the defendant. While passing orders on

admission dt. 24.05.2021, this Court has awarded interest @ 8% from

17.07.2021 till realization. In the case reported in (2014) 11 SCC (Tamil

Nadu Generation & Distribution Corporation Limited -v- PPN Power

Generating Company Private Limited) paragraph 73 reads as follows : -

"73. With regard to the issue raised about the interest on late payment, APTEL has considered the entire matter and come to the conclusion that interest is payable on compound rate basis in terms of Article 10.6 of the PPA. In coming to the aforesaid conclusion, APTEL has relied on a judgment of this Court in Central Bank of India v. Ravindra [(2002) 1 SCC 367] . In this judgment it has been held as follows: (SCC p. 394, para 37) "37. ... The essence of interest in the opinion of Lord Wright, in Riches v. Westminster Bank Ltd. [1947 AC 390 : (1947) 1 All ER 469 (HL)] (AC at p. 400 : All ER at p. 472E-F) is that:

'... it is a payment which becomes due because the creditor has not had his money at the due date. It may be regarded either as representing the profit he might have made if he had had the use of the money, or, conversely, the loss he suffered because he had not that use. The general idea is that he is entitled to compensation for the deprivation;' the money due to the creditor was not paid, or, in other words, 'was withheld from him by the debtor after the time when payment should have been made, in breach of his legal rights, and interest was a compensation, whether the compensation was liquidated under an agreement or statute'.

A Division Bench of the High Court of Punjab speaking through Tek Chand, J. in CIT v. Sham LalNarula [AIR 1963 P&H 411] thus articulated the concept of interest: (AIR p. 414, para 8) '8. The words "interest" and "compensation" are sometimes used interchangeably and on other occasions they have distinct connotation. "Interest" in general terms is the return or compensation for the use or retention by one person of a sum of money belonging to or owed to another. In its narrow sense, "interest" is understood to mean the amount which one has contracted to pay for use of borrowed money. ...

In whatever category "interest" in a particular case may be put, it is a consideration paid either for the use of money or for forbearance in demanding it, after it has fallen due, and thus, it is a charge for the use or forbearance of money. In this sense, it is a compensation allowed by law or fixed by parties, or permitted by custom or usage, for use of money, belonging to another, or for the delay in paying money after it has become payable."

In view of the above, this Court finds that already a decree with

respect of Rs. 9,09,136/- is passed along with interest @ 8% per annum

from 01.07.2017 till realization of the said amount. The defendant failed to

pay the principal amount and the interest till date. Though in the invoice,

there is clause that if the defendant failed to pay bill amount within 15 days

from date, the defendant is liable to pay @ 24% interest per annum but in

the notice i.e. Exhibit 2, the plaintiff has claimed only 18 % interest per

annum and thus this Court is of the view that the defendant is liable to pay

further interest on a sum of Rs. 9,09,136/- @ 10% per annum from

01.07.2018 till realization of the said amount.

CS 158 of 2018 is disposed of. Decree be drawn accordingly.

(Krishna Rao, J.)