Bharat Electronics Ltd. vs Stejac Enterprises (P) Ltd.
1999 Latest Caselaw 798 Del

JUDGMENT

Manmohan Sarin, J.

1. Plaintiff Company instituted this suit on 2.9.1993 for recovery of the sum of Rs. 7,78,565.50 (Rupees seven lakhs seventy-eight thousand five hundred sixty-five and paise fifty only) against the defendant. Plaintiff Company, which is engaged in the manufacture and selling of T.V. picture tubes of different specifications, claimed that various consignments of T.V. picture tubes had been supplied to the defendant Company. The amount claimed in the suit represents the principal amount of Rs. 3,86,197.50 p. (Rupees three lakhs eighty six thousand one hundred ninety-seven and paise fifty only) due on account of the invoices raised for the supply of T.V. picture tubes and after adjusting the amounts paid by the defendant. A further sum of Rs. 3,92,368.00 is claimed as interest, computed on the basis of varying rates of interest from 19 pre cent to 25 per cent per annum, as given in the statement of overdue interest, enclosed with the plaint.

2. After registration of the suit on 9th November, 1933 summons were issued to the defendant. Defendant, however, could not be served by ordi- nary means despite repeated attempts. Accordingly, plaintiff's application for service of the defendant by substituted means of publication and affix- ation was allowed on 6.8.1996. The citation was published on 27.12.1996. Defendant was also served by affixation of summons on his last known ad- dress for 6.8.1997. Defendant did not enter appearance and was proceeded ex-parte by order dated 13.10.1997.

3. Ex-parte evidence by way of affidavits was filed by the plaintiff on 20.3.1998. Documents were exhibited and arguments were heard in the matter on 1.9.1999.

4. Plaintiff has duly produced on record the Certificate of Incorpora- tion, Exhibit. PW 1/1. As far as due institution of the plaint is con- cerned, plaintiff has produced on record Exhibit PW. 1/2, which are the Minutes of the Meeting of the Board of Directors of the plaintiff Company regarding delegation of powers of the Chairman and Managing Director. Plaintiff has also filed on record the authorisation from the Chairman and Managing Director, authorising Mr. A. Anantachari, General Manager (Person- nal) to institute, sign and verify the plaint. Mr. Anantachari, even other- wise, being the Principal Officer of the Company, is authorised and compe- tent to institute, sign and verify and plaint.

5. It has been stated in the affidavit by way of evidence that a running account was maintained between the plaintiff and the defendant, with the defendant making payments in account against the outstanding invoices. As per the evidence filed by way of affidavit, to which there is no rebuttal, defendant made certain payments against the value of the invoices with effect from 20.5.1989 to 7.11.1989. After taking into account the payments made, a sum of Rs. 3,86,197.50 p. was outstanding against the defendant being the balance due as principal on the outstanding against the invoices. Cheques issued by the defendant towards part liquidation of its outstanding were not honoured. Defendant made part payment of Rs. 19,900/- on 7.11.1991. Defendant also acknowledged its liability to the plaintiff vide its letter dated 4.11.1989, Exhibit PW. 1/3. Defendant, vide the said letter, intimated the plaintiff that they would be making sincere efforts to make the payment of Rs. 40 lacs around 15.11.1989 as also the balance payment alongwith interest. Further, it was stated that if for some reason balance amount could not be paid, they would review the position with the plaintiff. Defendant requested the plaintiff to bear with them till then. By way of Exhibit PW. 1/4, plaintiff protested against the dishonour of the cheque issued by the defendant for Rs. 40,000/-. Plaintiff also sent to the defendant a notice of demand, dated 3.10.1992, which is Exhibit PW. 1/5, under Section 433 read with Section 434 of the Companies Act, demanding payment of Rs. 3,86,197.50. together with interest @ 24% per annum from the due date.

6. From the foregoing, plaintiff has proved due institution of the suit. Plaintiff has also produced that the sum of Rs. 3,86,197.50p. remained outstanding against the invoices raised for the supply of various picture tubes. The suit is also held to be within time in view of the acknowledge- ment of liability vide letter dated 4.11.1989 and the part payments made by the defendant.

7. As regards the question of pre-suit, pendente lite and future inter- est, the averment made in para 3 of the plaint is as under:

"After making the above adjustments a sum of Rs. 3,86,197.50 p. is still outstanding against the defendant towards the principal amount alone and Rs. 3,92,368/- towards interest. The total amount thus outstanding against the defendant is Rs. 7,78,565.50. The defendant was required to make the payment within 30 days from the date of the invoices. The defendant did not make the payments in time except on one occasion when a sum of Rs. 29,080/- was paid by the defendant on 12.5.1989. The defendant is, therefore, liable to pay interest on the total outstanding @ 24% per annum. The defendant is liable to pay a sum of Rs. 3,86,197.50 p. on account of the principal amount alone as on 30.6.1993 plus interest amount of Rs. 3,92,368/-."

Again, in para 4 of the plaint, it is averred:

   "The defendant, is liable to pay the total outstanding of Rs.    7,78,565.50 which includes interest @ 19%/24% per annum till the    date of its realisation as per the statement enclosed to this    plaint, after adjusting a sum of Rs. 19,900/- paid on 7.11.1991    as part payment."   

   Again, in the affidavit filed by way of evidence, after repeating the averments on the lines made in the plaint, it is stated:    

   "The defendant is, therefore, liable to pay interest on the total    outstanding @ 24% per annum. The defendant is liable to pay a sum    of Rs. 3,86,197.50 p on account of the principal amount alone as    on 30.6.1993 plus interest amount of Rs. 3,92,368/-."
 

   In para 5 of the affidavit, the deposition is as under : 
 

   "The defendant is liable to pay the total outstanding of Rs.    7,78,565.50 p which includes interest @ 19%/24% per annum till    the date of its realisation as per the statement enclosed to this    plaint, after adjusting a sum of Rs. 19,900/- paid on 7.11.1991    as part payment."   

From the above extracts, it would be seen that plaintiff has failed to prove on record any agreement to pay interest at a specified rate by production of any legend or term in the invoice or original document showing any such term. Plaintiff has simply made a demand in the plaint that inter- est is payable at the rate of 24% per annum. On the basis of the statement enclosed with the plaint, interest has been computed at the rates varying from 19% to 25%. It has not been proved that the said statement of overdue interest was ever sent to the defendant or accepted by the defendant. The only admission with regard to payment of interest by the defendant is in the acknowledgment letter where the defendant states that it would liqui- date the loan alongwith interest.

8. In these circumstances, since this was a commercial transaction be- tween the parties, interest can be awarded in terms of proviso to Section 34, IPC in excess of 6%. Accordingly, interest is awarded to the plaintiff on the outstanding amount of Rs. 3,86,197.50 p. (Rupees three lakhs eighty- six thousand one hundred ninetyseven and paise fifty only) from 30 days from the date of last invoice, i.e. 27.5.1989 till realisation @ 15 per cent per annum. The suit stands decreed in the aforesaid terms.

9. Plaintiff would also be entitled to costs in the suit.

10. Suit decreed.